South Africa. There’s a pensions train smash coming: Magnus Heystek
South Africa is facing a ‘pensions train smash’, says Magnus Heystek, director of Brenthurst Wealth Management, as a number of factors including the poor JSE, a weak economy and new regulations are set to collide.
Heystek said in a webinar on Wednesday (9 September), that this collision course is the result of a number of problems in the wider pensions industry which have been building for years.
He added that ordinary South Africans are starting to see the problems for themselves when looking at the return on their money.
“You can only hide bad news for so long and we have now had five to seven years of very poor return for most South African pension funds. So people are starting to wake up and are asking questions to their trustees and advisors, saying ‘what’s going on here? I am not making money’.”
Heystek said the funds are no longer able to rely on the ‘old chestnut’ of long-term gains, and that South Africans are increasingly choosing to step in and take control of their investments.
Prescribed assets Heystek said that the issue of prescribed assets forms part of the bigger discussion around the pension industry – particularly the controls that government already has over pension funds in terms of regulation 28 of the Pensions Act.
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