Brian Karidza | Regulatory Insights and Industry Trends | 7th edition #PIAFRICA
What key regulatory aspects from South Africa and beyond will you seek to highlight for discussion at PI Africa 2025 as major industry influences going forward?
One of the major regulatory aspects I will highlight is the ongoing retirement reforms in South Africa, particularly the introduction of the Two-Component System. This reform has allowed members to access a portion of their retirement savings early while preserving the remainder for retirement. While this change is innovative, it has brought challenges, such as administrative complexities, ensuring that members are adequately informed, and balancing short-term access with long-term retirement adequacy.
The experiences of the industry so far have been mixed. On one hand, we’ve seen increased engagement from members, but on the other hand, there are concerns about members prioritising short-term needs over long-term security. In my discussion, I will focus on learning points from the initial phase and the broader implications for the sustainability of retirement systems.
Another critical area is the potential impact of the Conduct of Financial Institutions (COFI) Bill. The COFI Bill seeks to unify and streamline financial sector regulations under a single framework. This will have significant implications for how funds operate, particularly in terms of governance, transparency, and member protection. I see this as an opportunity to create a more consistent and accountable industry, but it will require adjustments from all stakeholders.
Lastly, I will touch on the possibility of auto-enrolment into retirement savings schemes. Auto-enrolment has proven effective in countries like the UK in increasing retirement savings coverage. For South Africa, this could be a game-changer in addressing gaps in coverage, especially in the informal sector. However, implementation challenges, such as administrative readiness and cost considerations for employers, must be carefully evaluated.
How is the industry navigating regulatory changes and effectively contributing to industry reform in South Africa?
From an industry-wide perspective, the implementation of the Two-Component System has been a significant focus. Funds across the board are addressing challenges related to system readiness, member education, and the potential long-term implications of early access on retirement adequacy. Collaboration has been key, with industry stakeholders working together to share resources, align strategies, and learn from each other’s experiences.
Overall, the industry is embracing these changes as opportunities to improve retirement outcomes and ensure sustainability, while balancing the need for member protection and operational feasibility.
