As we wrap up yet another year, I'm reminded of the things that matter most in my life and whether or not I have planned carefully for my future as well as that of my family. It's easy to be taken by the moment as this is one of the most jovial times of the year; bonuses get paid out and with that comes the 'need' to spend. We need to always bear in mind how our current actions impact on our tomorrows; how putting away even a fraction of that bonus can secure a sound financial future.
Statistics show that only 6% of South Africa's working population will be able to retire comfortably and maintain the same standard of living they had during their working years. This is a concerning statistic especially since, amongst other things, an enormous burden will be placed on state coffers as a result. In addition, a culture of non-saving continues to bedevil the country, not least because saving is almost impossible as a result of rampant unemployment and escalating prices for basic day-today necessities.
As much as this is 'industry speak' for those of us who deal with it on a daily basis, it has serious implications for millions of South Africans. Treasury has touched briefly on the issue, stating that social security and health insurance reforms are important elements in facilitating a better package for vulnerable workers; providing protection against unemployment, illness or injury, and securing adequate income in retirement. Treasury has also announced that in 2012 it will publish a long-term outlook that will include exploring the implications for government finance on major long-term priorities, including social security, retirement reform and the establishment of a national health insurance fund.
Of major interest is the release of the National Development Plan by the National Planning Committee. The plan maps out how the government envisions alleviating some of the social challenges by 2030. Some of the areas it covers are unemployment, health, as well as education. It also touches on the plan to gradually decrease the dependency on social grants thereby creating a state of economically active citizens. This is of course a positive outlook from the government and the commitment is laudable. The challenge then remains with industry players such as ourselves to roll up our sleeves and assist wherever we can.
At Liberty Corporate we are doing our best to facilitate a shift towards meeting some of these objectives. Supporting such initiatives as the compulsory preservation of retirement funds when members change jobs and encouraging clients to save lump-sums such as their bonuses are just some of the activities.
The festive jingles have begun and while it's a good thing to reward oneself at the end of the year, let us think about these realities and what they mean to us as individuals. When the festive season is gone; our kids must go back to school, we will still face life's eventualities in the coming year and as life goes on, we will ultimately retire.
As most of you are preparing for a well deserved time off, I would like to wish you and your family a peaceful festive season.
Until next time
Seelan Gobalsamy
Chief Executive, Liberty Corporate
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