Benchmark research methods
Origin of the Benchmark Survey
- History
1980's
South Africa's retirement fund industry reflected the era's conflict and discrimination, with only 75% of funds open to all races and eligibility often limited to senior staff. Benefits varied by gender, and the paternalistic system provided little choice for members. While there was no legal requirement for retirement funds, most employers offered them to support employees. By the end of the decade, trade union influence led to a shift from pension to provident funds due to restrictive withdrawal conditions.
1990's
Retirement fund members shifted from defined benefit to defined contribution plans, giving them control over investments and trustee voting. However, this freedom led to challenges, as many felt overwhelmed by choices and delayed retirement planning. Our member survey revealed that on 27% of active members only sought financial advice five years before retiring. While 84% of trustees were concerned about members' use of benefits, only 22% wanted to engage with retirees, indicating a gap in retirement planning awareness.
2000's
Legislation improved fund governance and cut administration costs, leading many smaller retirement funds to adopt umbrella arrangements for efficiency. Despite this, nearly half of members felt unprepared to meet their financial goals, often cashing out retirement savings when changing jobs; 71% of funds estimated members would withdraw their full value in cash. The industry focused on communication and education, with 56% of funds offering formal advice and 76% providing pre-retirement counselling, but these efforts have not significantly impacted member decisions.
2010's
The financial services sector experienced significant changes due to technology, particularly in the retirement industry, which was experiencing a technology revolution. By using a 'systems thinking' approach, we understood that all elements need to be interlinked for optimal functioning. This transformation affected various aspects, including investment administration platforms and the interactions between funds, employers, and members through retirement fund web portals and mobile applications.
Our approach to research
Our research takes current economic realities into account and relies on ‘best practice’ diagnostic tools to model solutions for the future benefit of all South African retirees. Every year we observe the financial impact of socio-economic conditions on the living standards of members and retirees.
The Sanlam Benchmark™ research process begins by consulting stakeholders in the retirement funding industry to get a broad view of the issues driving member outcomes.
Stakeholders include employers, funds, consultants, media, and leading experts within Sanlam. Their collective feedback is consolidated and distilled to a number of key hypotheses to be tested. This informs the content of the Sanlam Benchmark™ research report.
We expanded the breadth of the research aimed at individual consumers of financial services to better understand the drivers of financial wellness amongst individuals.
We also interview employee benefits consultants, as key enablers of better retirement outcomes, to gain an understanding of their views of the changing dynamics of the formal retirement funding sector.
Our research programme
Consumers of financial services
Interview with professionals
Focus group discussions
Employee benefits fund consultants
Standalone funds (including 10 union funds)
Participating employers in umbrella fund
Sponsors of commercial Umbrella Funds
Asset Consultants
Pensioners
Employee Benefits and Healthcare Intermediaries
Research process
Our main objective is to provide insights which stimulate conversation, create meaningful opportunities for further engagement with industry stakeholders and ultimately help effect a positive financial outcome in retirement for South Africans. Our streamlined research process is designed to bring you insights that matter.
Questionaire
Designed by Sanlam and its internal research house
Interviews
Conducted by an independent research house
Data
Qualitative and quantitative data are captured and submitted for processing
Analysed
Data is analysed by Sanlam Actuaries and the research team with derived strategic benefit
Sanlam Benchmark
Sanlam presents the insights to an industry-wide audience
Responses
Sanlam responds to the media, industry and retirement funds
Survey benefits
Our research seeks to identify and address some of the behavioural challenges that cause the poor savings culture in South Africa. Through our market research, we aim to find information that can positively influence decision-making around saving.
- Survey benefits
Member Benefits
Access to simple and easy-to-understand information on finance
Improved understanding and knowledge around retirement
Engage more readily with funds on specific issues
Be more proactive and take accountability of retirement needs
Start retirement and healthcare planning much sooner with the aid of a personal financial adviser
Trustees and industry players
Online access to information and trends specific to retirement funding
Sanlam Corporate can run data comparisons on specific funds
Funds are able to design benefit structures and communication strategies based on membership needs and issues uncovered in the research
Improving the levels of saving for retirement, the industry is also in a position to improve the current savings levels in South Africa
Financial advisers
Deeper understanding of the financial challenges facing South African households
Gain insights to inform conversation and create meaningful opportunities for further engagement with industry stakeholders
Draw comparisons between members of different income groups and categories of retirement savings
Understand the impact of debt on an individual's ability to plan effectively for retirement