The 2025 Old Mutual Corporate OnTrack data highlights a critical insight into retirement planning in South Africa – small, intentional changes in retirement fund design can significantly enhance employees’ long-term financial security.
As life expectancy rises, the definition of being “old” is evolving. This means the approach to retirement must also adapt. Extending the normal retirement age has emerged as a powerful lever for closing the retirement adequacy gap, according to Blessing Utete, Managing Executive at Old Mutual Corporate Consultants.
“Adding just five more working years increases retirement income by lengthening contribution periods, compounding investment growth for longer, and reducing the savings drawdown period – all without needing to increase contribution rates,” says Utete.
Case study: Valterra Platinum’s success
Valterra Platinum, a mining sector leader, exemplified the impact of this approach by winning the inaugural Old Mutual SuperFund Employer Excellence Award in August 2025. The company raised the retirement age for over 1,300 corporate staff from 60 to 65. This policy gave employees additional years of contributions and investment returns.
Coupled with targeted communication and annual retirement reports that encouraged voluntary contributions, this change directly translated to improved projected replacement ratios.
“This case underscores that employers play a critical role in shaping employees’ financial security after retirement,” explains Utete. By adopting informed policies, employers can set their workforce on a path to financial dignity in retirement.
The role of fund design in retirement adequacy
Raising retirement age is just one strategy. The Old Mutual Corporate OnTrack data also highlights the role of fund design in improving retirement adequacy.
Key levers within fund design include:
- Defaults and contribution rates: Structuring default options and increasing contribution rates can ensure members save enough over longer periods.
- Preservation policies: Encouraging members to preserve their funds ensures long-term financial security.
- Investment strategy: Matching investment portfolios to members’ life stages and providing optimal annuity choices can enhance projected replacement ratios, boosting income by over 20%.
Old Mutual Corporate OnTrack provides employers with a comprehensive, evidence-based analysis of their workforce’s retirement progress. This helps identify where targeted interventions can improve outcomes.
“The data shows that small, targeted changes to contribution rates, preservation choices, investment strategies, and retirement age consistently lift projected replacement ratios,” notes Utete.
Recognising employer excellence in retirement solutions
Valterra Platinum’s example shows how small, deliberate policy changes transform employees’ financial futures.
The Old Mutual SuperFund Employer Excellence Award also recognised AVBOB and Nedbank as finalists for their dedication to improving retirement outcomes. These firm-led initiatives reinforce the potential for employers to elevate retirement security across South Africa.
“As demonstrated by our award winner and finalists, employer-driven action makes the difference between achieving adequacy in retirement or facing insecurity,” Utete concludes. “In a system where adequacy is the exception, employers have not just an opportunity but a responsibility to act.”
Change the narrative
Extending the retirement age and applying thoughtful fund design are transformative measures that elevate retirement adequacy in South Africa. Employers hold significant power in shaping their employees’ financial futures by leveraging evidence-based strategies like those outlined in Old Mutual Corporate OnTrack.
In an era when adequacy is rare, employer actions backed by data and strategic policies can set the benchmark for secure and dignified retirements.
