Johannesburg – South African pension savers made a call for government to intervene in the looming crisis against their savings and outlaw what looks distinctly like predatory behaviour from pension fund managers.
This came out during a panel discussion convened by Cape Town-based fund manager 10X Investments and hosted by the Daily Maverick on Tuesday night to tackle the "retirement crisis in South Africa".
Zack Bezuidenhoudt, head of S&P Dow Jones Indices for sub-Saharan Africa, presented evidence showing that 80 percent of active managers under-perform against the industry benchmarks every year while charging a premium for their services.
Bezuidenhoudt said that this problem was not an exclusive to South Africa, adding: “It is extremely difficult to beat a benchmark.”
Radio presenter Africa Melane called on government to step in and save the retirement industry after TV personality Siv Ngesi echoed the views of many in the audience when he questioned why learning about saving was not part of the school curriculum.
Melane’s point that the government should take action to outlaw what looks distinctly like predatory behaviour and protect retirement savers struck a chord with the audience, many of whom expressed determination to ask their brokers or advisors some tough questions about who was benefiting most from their hard-earned savings.
Steven Nathan, 10X chief executive, told the audience that according to National Treasury figures, only six percent of South Africans can afford to retire, and that figure had been the same for the past 25 years.
Nathan, who is the former managing director of Deutsche Bank in Johannesburg and London, argued that convoluted investment statements were seemingly designed to confuse. He said that even he sometimes struggled to make sense of the monthly statements people brought to him, particularly with respect of how much they were paying in fees, despite being in the industry for a long time.
The panel discussion covered topics ranging from high fees charged by pension fund managers, active versus passive investment management and complexity in understanding pension fund contracts.