In the survey of about 200 principal officers from the pension fund industry, 69% of active members could not name a trustee of their fund, 43% said they don’t care where their funds are invested as long as the savings are growing.
BusinessDay reports that more than half (55%) of members did not know how market movements would impact on the value of their retirement savings, although nearly 60% said they have sufficient knowledge to make their own investment decisions. One in four members do not even understand their benefit statement.
The survey also found that young people who changed jobs preferred to cash in their pension rather than to transfer it to the next employer, spending the money on luxuries or holiday trips.
Danie van Zyl, head of guaranteed investments at Sanlam Structured Solutions, said people had no emotional connection to their retirement savings and they did not see the immediate value to it, according to the news report.
Another alarming finding was that many had very little idea who would pay their medical bills once they had retired, and those who had discovered they would have to pay for their bills after retirement were not saving enough to cover future medical expenses.
Nearly half of those whose medical schemes are currently paid for by their employer believe they would continue to be covered once they retire.“In the 1980s, companies used to pay your medical aid contributions after you retire, but many have stopped doing that. Members still assume that they will be covered when they leave employment, which is not the case and is very unfortunate,” van Zyl said.