Extending the normal retirement age in occupational defined contribution funds in South Africa

Abstract

This paper addresses the problems of insufficient retirement savings and increasing longevity through the consideration of extending the retirement age. It is a pilot study of South African employers’ and employees’ perspectives on extending the normal retirement age in occupational retirement funds and the implications thereof. The data used for this paper were collected from two surveys conducted amongst South African employers and employees who are part of occupational retirement funds. The results indicate that most employers appear to have a positive attitude toward older employees, rating positive attributes such as reliability, experience, productivity and loyalty to the firm highly. The most significant factors in predicting whether an employee would be willing to work past the normal retirement age include employees’ expectations with respect to retirement and retirement lifestyle, current age, and whether they believe they will accumulate sufficient savings by their company’s normal retirement age. This study provides a base on which further analysis should be performed to understand whether the occupational sector in South Africa is willing to extend the normal retirement age.

Keywords: Retirement; older workers; employers; retirement savings; South Africa