Home

>

Characteristics of the South African retirement fund industry

Using administrative data, we examine three characteristics of the South African retirement fund industry–funding stability, risk sharing and efficiency–over the period 1996-2018. We find that there have been significant decreases in assets per member for private funds, pension funds and retirement annuities, which could reflect decreasing funding ratios in the retirement fund system. The retirement fund industry in South Africa is dominated by DC funds. Households, therefore, bear a greater risk which they may not be equipped to withstand. We find that South African retirement funds are not operating at an efficient scale. There are strong significant economies of scale present in the industry with total administrative costs increasing by only 72% when the total number of fund members doubles. Preservation funds and retirement annuities are found to be most efficient and operating at an efficient scale. None of the benefit structures are operating efficiently but hybrid funds are the most efficient.

Working paper 880
SHARE THIS Working Paper PUBLICATION:

Related South Africa’s Cities and Growth Spatial Challenges and Policy Interventions Content

Request for Proposals: The role of cities as drivers of growth and employment
Background Urbanization in South Africa is expected to reach 80% by...
Call for Work
South Africa’s future will be decided in our cities
Discussion Document 14 South Africa’s cities face multiple, overlap...
Dieter von Fintel, Justin Visagie, Ivan Turok, Takwanisa Machemedze, Claus Rabe, Sebastian Galiani, Edward Glaeser
Discussion Document
Monitoring South Africa’s metropolitan economies: A survey of the data landscape
Discussion Document 13 Disparities in data across different metropo...
Dieter von Fintel
Discussion Document
Cities, productivity and Jobs in SA: Problems and potential
Discussion Document 12 Cities contribute to national prosperity bec...
Ivan Turok, Justin Visagie
Discussion Document
Place-based economic policies: international lessons for South Africa
Discussion Document 11 Place-based policies are designed to support...
Harris Selod, Claus Rabe
Discussion Document
What luminosity data can and cannot reveal about South Africa’s urban economies
Discussion Document 10 As novel types of data are becoming availabl...
Takwanisa Machemedze
Discussion Document
Crime: A policy-oriented survey
Discussion Document 9 South Africa has a reputation for having high...
Sebastian Galiani
Discussion Document
Virtual CDE Workshop on SA Cities and Growth
Urban economics has provided powerful insights into how the charact...
Workshop