SA’s pension system risks failure unless technical reforms are matched by leadership, collaboration and consistent execution. That was the warning from experts at the recent Old Mutual Thought Leaders Forum, which brought together senior policymakers, regulators and industry leaders to debate the future of retirement in the country.
Paul Watson, advisory board member at Allianz Retire+, drew on Australia’s 35-year journey to universal pension coverage to show how sustained leadership can transform retirement outcomes. “Once you have the framework in place, you must take the next step. In our case, compulsion, to achieve full coverage,” he said. “The equivalent next step for SA is auto-enrolment. You cannot achieve broad-based coverage without it.”
Watson stressed that Australia’s now world-class superannuation model was not built on wealth but on leadership. Its turning point came when business, labour and government moved together from voluntary to compulsory provision. It was a political choice, not an economic luxury.
He acknowledged that auto-enrolment was contentious in SA, given high unemployment and limited informal sector coverage, but argued that this made a phased approach essential. “Australia started at 3% and took 33 years to reach 12%. You focus first on participation in the formal sector, start at a manageable level, and build adequacy over time,” he said.
Data on defaults
His argument is reinforced by the Old Mutual Corporate OnTrack data that shows many members remain in their employer’s default contribution category, meaning that well-calibrated defaults can significantly raise savings levels without complex decision-making.
The same data shows that the first 10 years in a fund are decisive for long-term adequacy, yet most members exit and cash out within this period. A 1% contribution increase lifts replacement ratios (estimated retirement savings people would need in retirement) by 5%, while sustained higher contributions can double or triple savings over time.
Another proven lever is extending the working horizon. In Australia, where the retirement age is 67, members benefit from more years of contributions, compounding investment growth and a shorter drawdown period.
“Auto-enrolment embeds participation from the very first job,” Watson said. “The data shows that is when behaviour is set, and when intervention makes the biggest difference.”
Two-Pot proves capacity for complex reform
Astrid Ludin, deputy commissioner at the Financial Sector Conduct Authority, said SA’s experience with the Two-Pot Retirement System showed the industry could deliver sensitive and technically demanding reforms when there was shared purpose.
“The implementation was a collective effort, drawing on the leadership of employers, funds, administrators and regulators. It modernised infrastructure with over R1bn in technology investment and increased member engagement. Everyone, even those who did not plan to withdraw, checked their savings pot. That level of awareness is a huge win. Preservation modernised our system. Next comes contribution reform,” she said.
Defaults work
Building on the call for contribution reform, Chris Axelson, deputy director-general at National Treasury, said the debate on defaults should focus on setting sustainable starting points rather than ruling them out on affordability grounds. “Defaults work. But we must shape them carefully, not impose them blindly,” he said.
The OnTrack data found that low default contribution rates quietly but consistently failed members who lacked the time or confidence to make active decisions. Higher defaults, especially when paired with above-average employer contributions, correlate with better adequacy, particularly in sectors like mining and financial services.
Employers hold the key
The experts agreed that in the formal sector, employers were central to improving retirement outcomes, but only if members stayed in the system. The OnTrack data shows most members leave their fund within three years, undermining the impact of defaults unless combined with preservation rules and portability. Members who preserve for decades can achieve adequate replacement ratios, making the combination of auto-enrolment, default preservation and continuity a powerful lever.
Employers can also use other proven levers to improve outcomes without raising contributions. The 2025 Old Mutual SuperFund Employer Excellence Award recognised Valterra Platinum for extending the normal retirement age for its corporate staff from 60 to 65. The change gave over 1,300 members five extra years of contributions and investment growth, boosting projected replacement ratios while reducing the number of years over which savings are drawn down.
Shafeeq Abrahams, CEO of the Eskom Pension & Provident Fund, added: “We must think differently about capital. It is a force for both income and impact.”
Employers can drive change by auto-enrolling younger and new workers, phasing in higher contribution rates, extending the working horizon, championing umbrella funds where they add value, and investing in systems that integrate with national registries to ensure portability.
Long-term view
The OnTrack data shows the average fund member has savings worth just two to three times their annual salary at retirement, far short of the nine times targeted, with a long-term goal of 14 times. By comparison, Australia lifted its mandatory contribution rate from 3% to 12% over three decades, backed by a clear national plan and sustained commitment.
Watson cautioned against expecting instant results. “Australia’s journey took decades, and it was built on sustained leadership and consensus-building. Reform without follow-through is just an idea. The real work is in turning policy into practice.”
SA’s opportunity is to match the technical reforms already in motion with the same free but invaluable ingredients: a shared vision, consistent leadership and collaboration over decades.
Humphrey Mkwebu, acting MD of Old Mutual Corporate, says: “If we bring the industry together, we can define the roadmap, not wait for it.”
For more Forum insights, and to subscribe to the Old Mutual Corporate Mindspace Thought Leaders Forum publication, visit the Old Mutual website.
For more information on how Old Mutual’s integrated employee benefits solutions can support your business, click here.
This article was sponsored by Old Mutual Corporate.
