“Who you gonna call?” It’s a question made famous by the Ghostbusters – but in the South African retirement landscape, it’s a question that every retiring fund member must now answer.
Portfolium says following the implementation of the Default Regulations to the Pension Funds Act (Act no. 24 of 1946), the answer has changed.
For decades, South Africans have followed a predictable movie script: when the day of retirement arrives, collect your benefit from the fund and immediately make an appointment with a retail financial advisor.
But the retirement landscape has changed. The introduction of the Default Regulations in March 2019 fundamentally reshaped how funds must support their members during their accumulation phase while still employed, but now also during their retirement.
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Why behavioural change matters
The old status quo told members that the moment they retired, their relationship with their fund ended. The only way forward was to seek out a retail advisor and buy an annuity or investment product on the retail market outside their retirement fund. Trustees, meanwhile, largely viewed their duty as ending the day contributions stopped.
The Default Regulations were designed to disrupt that thinking. They require funds not only to offer default investment, preservation and annuitisation options, but also to guide members through the choices they face at retirement.
Retirement is no longer the finish line for member and funds; it is the beginning of a new phase for members, and the extension of fiduciary responsibility for trustees of retirement funds.
Your fund is not just for the journey up to retirement
The most powerful message these regulatory changes send is simple: your fund doesn’t stop caring about you the day you retire. In fact, the fund is now required to provide viable, cost-effective fund annuity solutions and to offer retirement benefit counselling to help you make informed choices.
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Why does this matter? Many retail products charge higher fees, carry complex commission structures, or are designed to reward product sales rather than optimise member outcomes. Over a retirement that could last 20 or 30 years, these differences add up to substantial sums – and could even mean the difference between running out of money and enjoying a secure income for life.
Fund options, by contrast, benefit from the collective scale of the fund, which can translate into lower costs, simpler structures, and oversight from trustees bound by fiduciary duty. These are significant advantages that too often go unnoticed simply because members never pause to ask whether their fund can provide them.
A new default: call your fund first
Behavioural science teaches us that small “nudges” can lead to significant changes. One of the most straightforward yet powerful nudges in the retirement space is changing the default answer to a familiar question. When retirement comes and you wonder, “Who you gonna call?”, make your first call to your fund.
It does not mean you should never seek outside financial advice – many advisors play a valuable role. But it does mean that your fund is now designed, regulated, and duty-bound to support you beyond your working life.
Exploring what it offers first could save you money, extend the life of your savings, and give you peace of mind.