EMPOWERING INSIGHTS ALL ABOUT THE INDIVIDUAL - PowerPoint PPT Presentation

EMPOWERING INSIGHTS

ALL ABOUT THE INDIVIDUAL WWW.SANLAMBENCHMARK.CO.ZA

TOP TRENDS Consultant Survey Pre-Covid 25% 20% 15% 10% 5% 0% Technological Member Integrated Flexibility Price Generation Focus on Pre- Capital Indexation Impact Innovation Focus Suite Reductions Shift Retirees Protection Investing WWW.SANLAMBENCHMARK.CO.ZA

TOP TRENDS Consultant Survey Pre-Covid 25% 20% 15% 10% 5% 0% Technological Member Integrated Flexibility Price Generation Focus on Pre- Capital Indexation Impact Innovation Focus Suite Reductions Shift Retirees Protection Investing WWW.SANLAMBENCHMARK.CO.ZA

TOP ADVICE TRENDS Consultant Survey Pre-Covid 20.00% 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Costs of benefits and Provision of financial advice Standard disciplines Prescribed assets More time to be dedicated to services through to members member education WWW.SANLAMBENCHMARK.CO.ZA

TOP ADVICE TRENDS Consultant Survey Pre-Covid 20.00% 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Costs of benefits and Provision of financial advice Standard disciplines Prescribed assets More time to be dedicated to services through to members member education WWW.SANLAMBENCHMARK.CO.ZA

CHANGING NATURE OF ADVICE Consultant Survey Pre-Covid 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Member Communication Member Engagement Impact Members Use Data to Impact Members WWW.SANLAMBENCHMARK.CO.ZA

PARADIGM SHIFT Member’s experience of retirement funds Enable better decisions Engagement Data Role of Umbrella Funds Changed expectations of Consultants & Service Providers Reduced complexity > 1,000,000 members joined over the past decade Default Regulations WWW.SANLAMBENCHMARK.CO.ZA

EMOTIONAL IMPACT

UNDER PRESSURE STATS SA ALL TOLD COVID-19 SURVEY 8% lost jobs during the lockdown 26% experienced reduction in income during lockdown 10% increase in persons reporting no income during lockdown 19% indicate that lockdown will have a major impact on ability to meet financial obligations 12% concerned about short term impact of Covid on financial situation 67% concerned about long term impact of Covid on financial situation WWW.SANLAMBENCHMARK.CO.ZA

MEMBER BEHAVIOR 30% 25% 20% 15% 10% 5% 0% Members’ queries Requests from Requests for Members' queries Digital Member None of the above The utilisation of members to financial advice regarding their engagement from investment retirement and/or complaints on their access portions of from members group risk benefits members switches benefits investment their retirement counselling funds performance and/or fund values Consultants Funds/Employers WWW.SANLAMBENCHMARK.CO.ZA

FINANCIAL RELIEF TO MEMBERS 35% 30% 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA

TEMPORARY SUSPENSION OF CONTRIBUTIONS Financial Relief to Members 35% 30% 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA

TEMPORARY INCREASE IN TAX FREE AMOUNT FROM R500K TO R1M Financial Relief to Members 35% 30% 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA

ONCE OFF TAX EXEMPT WITHDRAWAL Financial Relief to Members 35% 30% 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA

MEMBER DATA Sanlam RFA Administration Data Fund Value (R’) Proportion Average Average Gross Average Gross Pensionable Contribution Contribution Salary (R’) (R’) (% of APS) < 50,000 50% 107,000 13,000 12% 50,000 – 100,000 10% 205,000 27,000 13% > 100,000 40% 330,000 55,000 17% Total 100% 203,000 31,000 15% Average fund balance 0.8x annual pensionable salary 60% of members have balances of 6 months pensionable salary or less 11% of members have more than R500,000 WWW.SANLAMBENCHMARK.CO.ZA

NET EFFECT Tax relief limited in scope Access or Borrowing May not provide enough relief Impact long term outcomes Conflicting needs System not prepared Low preservation rates impact

APPLIED FOR SUSPENSION Survey closed 5 June 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Consultants Funds/Employers Yes No WWW.SANLAMBENCHMARK.CO.ZA

EXPECTED DURATION 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1 2 3 4 5 > 6 Consultants Funds/Employers WWW.SANLAMBENCHMARK.CO.ZA

REACTIONS OF MEMBERS 35% 30% 25% 20% 15% 10% 5% 0% Concern regarding their Concern whether they would Concern regarding the loss Gratitude towards the No reactions noted retirement outcomes be covered for COVID-19 of insurance coverage employer related insurance claims Consultants Funds/Employers WWW.SANLAMBENCHMARK.CO.ZA

COMMUNICATION MECHANISMS 120 100 80 60 40 20 0 Email WhatsApp SMS Other Intranet Webinar Telephone Unsure Social Media Did not communicate Consultants Funds/Employers WWW.SANLAMBENCHMARK.CO.ZA

AWARENESS OF SUSPENSIONS 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Not at all Moderate Fully Consultants Funds/Employers WWW.SANLAMBENCHMARK.CO.ZA

CONTACT DETAILS 70% 60% 50% 40% 30% 20% 10% 0% Yes Partial Yes Partial No No Unsure Consultants Funds/Employers WWW.SANLAMBENCHMARK.CO.ZA

DRAFT CONDUCT STANDARDS In respect of EACH MEMBER … Full name Date of membership Date of Birth Employer Pay Number SA ID number or Passport Annual pensionable emoluments and annual CTC number % and amounts of contributions Income Tax Number Split between member and employer contributions Contact number & cell number Details of additional voluntary contributions where available An indication of any changes to previous period Email address showing any differences in the data Postal address Residential address WWW.SANLAMBENCHMARK.CO.ZA

HAS RISK PRICING STABILIZED? Consultant Survey Pre-Covid-19 Upward rates revisions Linked to economic cycle No Covid-19 Healthcare Impact Yes Economic Impact WWW.SANLAMBENCHMARK.CO.ZA

EXPECTED PREMIUM INCREASES 60% 50% 40% 30% 20% 10% 0% < 10% 10% - 20% > 20% No increases anticipated Consultants Funds/Employers WWW.SANLAMBENCHMARK.CO.ZA

REVIEW DISABILITY INCOME BENEFITS 60% 50% 40% 30% 20% 10% 0% Change from flat benefit Increase the waiting Reduce benefit levels Terminate the disability No need to review the Disability income structures to income tax period income benefits policy disability income benefits not available rate scaled benefit benefits policies via the employer structures Consultants Funds/Employers WWW.SANLAMBENCHMARK.CO.ZA

EVALUATED INSURER SOLVENCY 70% 60% 50% 40% 30% 20% 10% 0% Consultants Funds/Employers Yes No WWW.SANLAMBENCHMARK.CO.ZA

FRUSTRATIONS WITH INSURERS Consultant Survey Pre-Covid 30% 25% 20% 15% 10% 5% 0% Underwriting process Steep rate increases Administration burden Claims repudiation Complex benefit None structures WWW.SANLAMBENCHMARK.CO.ZA

FRUSTRATIONS WITH INSURERS Consultant Survey Pre-Covid 30% 25% 20% 15% 10% 5% 0% Underwriting process Steep rate increases Administration burden Claims repudiation Complex benefit None structures WWW.SANLAMBENCHMARK.CO.ZA

A ROUGH 12 YEARS

WHAT DOES THE FUTURE HOLD … V – U - W – L … US Elections Geopolitical Conflict Debt – GDP Future Pandemics ??? … WWW.SANLAMBENCHMARK.CO.ZA

REVIEW STATUS QUO Accumulation Time on your side Ride volatility Equity risk premium Pre-Retirement Conservative Less volatile

MEMBER SWITCHING BEHAVIOR Sanlam RFA Data WWW.SANLAMBENCHMARK.CO.ZA

INVESTMENT DEFAULTS Median tenure estimated at 4 years ( Stats SA ) Preservation a major obstacle Member switching behavior during downturns telling Reconsider investment defaults (11% cons ||16% funds/employers) Allow for volatility protection + Risk Profiled Member Choice Smoothing and/or guarantees Especially for pre-retirees WWW.SANLAMBENCHMARK.CO.ZA

PRE-RETIREMENT DEFAULTS Most retirement capital available Risk of losses greatest Opportunity to rebuild the least Retirement a once-off event Correlations in diverse asset classes converge in crisis 13% of Consultants & 11% of Employers / Funds considering Relevant post-retirement to mitigate sequencing risk WWW.SANLAMBENCHMARK.CO.ZA

TOP TRENDS Consultant Survey Pre-Covid 25% 20% 15% 10% 5% 0% Technological Member Integrated Flexibility Price Generation Focus on Pre- Capital Indexation Impact Innovation Focus Suite Reductions Shift Retirees Protection Investing WWW.SANLAMBENCHMARK.CO.ZA

HOW TO REBUILD SA’S ECONOMY 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA

USE UNCLAIMED BENEFITS TO HELP THE POOR 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA

INFRASTRUCTURE / ESG / ALTERNATIVES / SA INC. 25% 20% 15% 10% 5% 0% WWW.SANLAMBENCHMARK.CO.ZA

WHAT IMPACT? Consultant Survey Pre-Covid 35% 30% 25% 20% 15% 10% 5% 0% Decent work and economic growth Climate action, clean water and sanitation Affordable and clean energy WWW.SANLAMBENCHMARK.CO.ZA