South Africa’s retirement industry has a great deal to be proud of. We have a mature, well-regulated system, strong governance frameworks, and a long tradition of protecting member interests. Yet the latest international scorecard poses an uncomfortable question: what if a well-governed retirement fund still produces an inadequate retirement?
The 2026 Marsh CFA Institute Global Pension Index, released on 20 October, ranks South Africa 51st out of 55 retirement systems, behind regional peers Namibia, Botswana and Kenya. Our overall score of 50.4 keeps us at a C grade, but it is the gap between our sub-scores that tells the real story.
On integrity, which assesses governance, regulation, and trust, South Africa scores 75.0, a B+. On adequacy, which measures whether people will have enough income in retirement, we score just 37.3, a D.
In other words, we govern retirement funds well. We are far less successful at delivering retirement incomes that last.
Governance is necessary, but it’s not enough
How can strong governance coexist with poor adequacy? Governance protects the system, but it doesn’t guarantee the outcome. A fund can be impeccably run, fully compliant, and competitively priced, and still pay out benefits that fall far short of what members need.
Low participation, interrupted contributions, early withdrawals, and rising living costs all erode retirement savings long before a member reaches retirement age. Many working South Africans understand the importance of saving. The real question is whether they can afford to, when household budgets are already stretched across several generations.
No member retires on governance. They retire on outcomes.
Retirement at 65 is only half the picture
This year’s index includes a methodology change that deserves the attention of every trustee. It no longer measures adequacy only at the point of retirement. It now also considers whether retirement income remains adequate at age 80.
That shift reflects a reality our industry can no longer ignore. Retirement used to mean relying on savings for 10 to 15 years. As the index’s own research on ageing notes, it may now be required to last 20, 30, or even 40 years. Retirement is no longer the final chapter. For many, it is an entirely separate life stage that needs as much planning as a career.
A member who retires with a reasonable income at 65 but finds it depleted or eroded by inflation at 80 has not had a successful retirement.
What trustees should be asking
For trustees, this changes the investment conversation. Success can’t be judged only by the size of a member’s fund on the day they retire. Boards should be asking whether their default investment strategy is designed for the full retirement journey. That means generating real growth during the working years while managing the risk of a major market fall close to retirement.
They also need to be asking how their annuity strategy protects members against longevity and inflation. A sustainable income at 80 depends on the choices members make at 65, and on the default options we put in front of them.
Another question they need to be addressing is whether members are drawing down at sustainable rates? High drawdowns from living annuities can feel affordable early in retirement, and become a crisis later.
Lastly, they need to ensure that they are measuring the right things. Fund returns and costs matter, but so do projected replacement ratios and the likelihood that a member’s income will last.
If I had to distil the index into a single question for retirement fund boards, it would be this: if a typical member of our fund retired today, would their income still be adequate at 80? If the honest answer is “we don’t know”, that is where the work needs to begin.
No single stakeholder can solve this alone
Improving adequacy is not the responsibility of any one party. Government has a critical role in creating policy that encourages inclusion and long-term participation. Employers can foster a culture of saving and financial wellbeing. Retirement funds must continue evolving from administrators of assets into stewards of member outcomes. Financial advisers help individuals navigate complex decisions throughout their working lives. And members need access to education, tools, and support to make better choices at every stage.
The conversation can’t simply be about how much money funds manage. It must be about how many people are able to retire with dignity. It can’t simply be about investment returns. It must be about financial resilience. And it can’t stop at retirement readiness at 65. It must extend to retirement sustainability at 80 and beyond.
The industry has built strong governance foundations, and that should be celebrated. The next frontier is to build on them, shifting our focus from products to people, and from assets accumulated to lives secured.
The true measure of success is not the quality of a governance framework. It’s whether a member, decades from now, can look back and say: “My savings lasted as long as my life did.” Not simply better retirement funds. Better retirements.
