Lessons for South Africa’s proposed social security retirement reforms from the experience of other sub-Saharan African countries
| dc.contributor.author | Walker, Stephen | |
| dc.date.accessioned | 2024-11-05T13:40:24Z | |
| dc.date.available | 2024-11-05T13:40:24Z | |
| dc.date.issued | 2024 | |
| dc.description | A research report submitted in partial fulfillment of the requirements for the degree of Master of Science to the Faculty of Science, School of Statistics and Actuarial Science, University of the Witwatersrand, Johannesburg, 2024 | |
| dc.description.abstract | The South African government intends reforming its current social security system, including retirement benefits. Views on how this should be done vary, even within government. Proposals often take the experience of other countries into consideration but there is limited literature on the experience of other sub-Saharan African countries. The region is experiencing demographic change, especially reduced infant mortality, reduced fertility and increasing old age longevity. Here South Africa is advanced relative to other countries in the region, despite the high unemployment levels. South Africa’s informal sector is large relative to developed countries, but smaller than elsewhere in Sub-Saharan Africa. Countries in the region have tried several approaches when introducing reform. Level A non- contributory pensions in South Africa are advanced, relative to most countries in the region. Most other countries have mandatory, contributory, government-run level B funds, the closest equivalent in South Africa is the Unemployment Insurance Fund. DB level B schemes are the norm. However, many countries are experiencing strain on the financial sustainability of these schemes and a number of countries have had to increase scheme contributions or reduce benefits. Occupational retirement funds in South Africa are well established and have experienced significant reforms recently. South Africa’s level C2 occupational retirement fund coverage is not mandated by government but is high relative to other countries in the region, even those with compulsory coverage under level C1. South Africa is still relatively new to introducing contributory pensions for informal sector workers. Other countries have tried various approaches under both levels D1 and D2 without finding a perfect solution. The research shows that maximising coverage requires all pension types. Pension reform is an iterative process, there is no perfect solution and phasing-in change is best. Government should make decisions on what incremental improvements can be made and start implementing these. The sequencing of reforms is important, what happens at each level of pension provision will influence what can and should be done at the next level. South Africa should move towards universalisation of non-contributory pensions but needs to do so in a cost-effective manner. The experience in other countries in the region should be considered when setting goals for coverage of informal sector workers by a level D1 or D2 contributory scheme. Compulsory contributory pensions should be introduced for formal sector workers, shifting from a level C2 to a level C1 approach. Expanding the Unemployment Insurance Fund to cater for retirement benefits as opposed to creating a new level B national fund should be explored. | |
| dc.description.submitter | MM2024 | |
| dc.faculty | Faculty of Science | |
| dc.identifier | https://orcid.org/ 0009-0009-0836-0047 | |
| dc.identifier.citation | Walker, Stephen . (2024). Lessons for South Africa’s proposed social security retirement reforms from the experience of other sub-Saharan African countries [Master’s dissertation, University of the Witwatersrand, Johannesburg]. WireDSpace. | |
| dc.identifier.uri | https://hdl.handle.net/10539/42215 | |
| dc.language.iso | en | |
| dc.publisher | University of the Witwatersrand, Johannesburg | |
| dc.rights | © 2024 University of the Witwatersrand, Johannesburg. All rights reserved. The copyright in this work vests in the University of the Witwatersrand, Johannesburg. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of University of the Witwatersrand, Johannesburg. | |
| dc.rights.holder | University of the Witwatersrand, Johannesburg | |
| dc.school | School of Statistics and Actuarial Science | |
| dc.subject | Social security | |
| dc.subject | Pension | |
| dc.subject.other | SDG-4: Quality education | |
| dc.title | Lessons for South Africa’s proposed social security retirement reforms from the experience of other sub-Saharan African countries | |
| dc.type | Dissertation |