SME monitor notebook

2. Our ability to see the bigger picture fully supports your entrepreneurial
thinking, because the more meaningful a business becomes to its
employees, the more effort employees make to bring about success.
We therefore present you with the first edition of the Old Mutual SME
Employee Benefits Monitor for 2015 – insightful and supportive
information regarding employee benefits and retirement solutions to guide
you towards future success.
Research was conducted by Livingfacts and produced for Old Mutual

3. 01 | INTRODUCTION
02 | RESEARCH OBJECTIVE AND SURVEY SAMPLE
03 | SUMMARY OF FINDINGS
04 | DETAILED FINDINGS
SME OVERVIEW
SME confidence in SA economy
Key SME challenges
EMPLOYEE BENEFITS OVERVIEW
Perceived value of employee benefits
Perceived responsibility for employee benefits provision
Provision of employee benefits by SMEs
RETIREMENT FUNDING
Retirement fund preferences
Perceived responsibility for retirement funding
Employees’ preparedness for retirement
Unique SME retirement funding requirements
The ideal retirement fund for SMEs
Member Level (ML) investment choice
Preservation
EMPLOYEE BENEFIT SERVICE PROVIDERS
Reasons for choosing service providers
Confidence in solutions and solution providers
02
04
10
17
20
27
39
CONTENT

4. Over the past decade, the Old Mutual Retirement Monitor and the
Savings Monitor have become trusted indicators of the savings and
investment trends of South Africans from all walks of life. This first
edition of the Old Mutual SME Employee Benefits Monitor for 2015
expands this trusted suite of annual research documents by including
valuable insights into the key trends, issues and challenges of South
Africa’s small and medium businesses.
Given the unanimous agreement across both public and private sectors
that Small and Medium Enterprises (SMEs) hold the key to South Africa’s
continued socio-economic development – most notably through the
creation of employment opportunities – we believe the findings of this,
and future SME Monitors will be invaluable to all stakeholders in our
country’s future.
Our intention going forward is to conduct this SME Monitor research
at least every two years, alternating it with the research into the other
Monitors produced by Old Mutual. As the content and findings of all
these studies clearly dovetail with each other, we recommend that
all three are read in conjunction to ensure a full view of the savings,
retirement and employee benefits situation in all areas of South African
business and society.
I trust you will find the content of this SME Monitor informative
and valuable, particularly if you are involved in business as an owner,
manager, investor or employee. If there’s anything further you need to
know, visit www.oldmutual.co.za/SMEMonitor
DOUG CLOTHIER
GENERAL MANAGER: OLD MUTUAL SME SEGMENT
INTRODUCTION
Importantly, while the research that informed the content of this Old Mutual
SME Monitor 2015 was conducted with small and medium enterprises and
their staff, we firmly believe that the findings are relevant to all businesses
that embrace and promote an entrepreneurial spirit and culture
within their organisations.
02

6. RESEARCH OBJECTIVE
AND SURVEY SAMPLE02
ABOUT THE RESEARCH
While it is widely accepted that SMEs are a vital component in the development of the
South African economy and the empowerment of all its people, little recent research exists
into if, and how, SMEs are financially empowering their staff through the provision of
employee benefits offerings.
This Old Mutual SME Employee Benefits Monitor 2015 is the first of what is intended to
become a biennial publication providing detailed research insights into employee benefits
within South African SMEs.
The independent research for this SME Monitor took place, with SME decision makers,
employees and brokers, over three months with interviews taking place between July and
September 2014. The survey questions were designed to deliver insights into various
aspects of SME employee benefits including:
• Attitudes towards employee benefits in SMEs;
• Perceptions of the need for, and provision of, employee benefits by SMEs;
• Levels of preparedness of retirement amongst SME employees and their staff;
• General knowledge and understanding of employee benefits;
• Driving factors behind the prevalence (or lack thereof) of employee benefits in SMEs;
• Decision drivers regarding the selection of employee benefits and employee benefit
providers
While this SME Monitor is focused on providing the above insights, it forms part of
Old Mutual’s series of research monitors, including the Old Mutual Retirement Monitor and
the Old Mutual Savings and Investments Monitor.
To derive maximum benefit from the content of these documents, it is recommended that
they are read and analysed together. Electronic versions of all the Old Mutual Monitors can
be downloaded at www.oldmutual.co.za/corporate
04

7. SURVEY SAMPLE
The survey comprised two components, namely:
• an investigative, or qualitative, phase, that involved
face-to-face interviews with 30 decision makers and
30 brokers; and
• a quantitative phase involving telephonic interviews
conducted with 503 employees and 514 decision makers
(owners, managers) from SMEs across South Africa.
To qualify for inclusion in the survey, SMEs were required to have an annual turnover
of between R2 million and R200 million and employ more than 10 staff members.
The SME sample was controlled by industry sector, using the dti’s Annual Review
of Small Businesses (2004-2007) and the Absa SME Index 2012 as a guide.
SME decision makers and staff believe that most
people will need between 70% and 89% of their
current salary in order to maintain their quality of
life once they retire.
05

8. SAMPLES
DECISION MAKERS IN SMEs
16% Wholesale & Retail Trade
12% Finance, Brokers & Insurance
14% Business & Professional Service
15% Construction
17% Manufacturing
0,5% Electricity, Gas & Water
0,5% Entertainment
5% Motor Trade & Repair Services
5% Agriculture
1% Mining & Quarrying
1% Catering, Accommodation & other Tourism
1% Communication
7% Transport & Storage
6% Community, Social & Personal Services
Percentage of sample
by industry/sector
(as indicated by SME
decision makers)
62% Small Businesses (R2m – R31m)
Undisclosed
27% Medium Businesses (R31m – R200m)
Percentage of sample
by annual business
turnover (as indicated by
decision makers)
06

9. 38% are 10 to 20 Employees
36% are 21 to 50 Employees
17% are 51 to 100 Employees
10% are 101 to 200 Employees
63% of the SMEs included in the sample have been in business for more than 15 years.
None of the SMEs are younger than 5 years old.
Percentage of
sample by number of
employees (as indicated
by decision makers)
88% of SME decision makers and staff surveyed
agree that the preservation of retirement savings
is important. However perceptions by SMEs
of likely or actual preservation activity shows a
clear gap between this understanding and the
incidence of preservation.
07

10. SAMPLES cont.
STAFF MEMBERS OF SMEs
Percentage of
sample by region/sector
Percentage of
sample by position/level
in company
55% Gauteng
3% North West
3% Mpumalanga
15% KwaZulu-Natal
17% Western Cape
4% Eastern Cape
2% Free State/Central
1% Limpompo
2% Executive
13% Senior Management
22% Middle Management
6% Supervisor
59% Other Staff in Administration
and Sales/Production, Stores
and Factories
This SME Monitor outlines the findings of the survey according to the responses by SME decision
makers and staff, as well as comments by brokers.
08

12. SUMMARY OF FINDINGS03
SME CONFIDENCE
• SME decision makers largely feel that their own businesses are sustainable
in the long-term.
• Most SMEs have not felt sufficient government support yet.
• Legislation does not make it easy for SMEs to do business.
• 35% of decision makers feel that SMEs have a higher staff turnover than
larger business.
SME EMPLOYEE CONFIDENCE
Respondents generally
believe that most people
will need between 70%
and 89% of their current
salary as income when
they retire.
Those who have to rely on
others typically say they will
need to rely on the government,
their children or other family
to survive post-retirement –
or continue working.
Only 54% of SME
staff believe they will
be in a position to
self-fund retirement.
10

13. IMPORTANCE OF EMPLOYEE BENEFITS TO SMEs
AND THEIR STAFF
The majority of SME decision makers and staff believe that the employee
benefits offered by a business play an important part in attracting employees.
DO POTENTIAL STAFF CONSIDER EMPLOYEE BENEFITS?
SHOULD RETIREMENT FUNDING BE A PRIORITY FOR SMEs?
79% 90%DECISION
MAKERS BROKERS
64%
DECISION
MAKERS
69%
STAFF
90%
STAFF
11

14. IMPORTANCE OF EMPLOYEE BENEFITS TO SMEs
AND THEIR STAFF cont.
IS RETIREMENT FUNDING ON THE AGENDA OF AN SME?
HOW MANY OFFER ANY EMPLOYEE BENEFIT?
HOW MANY OFFER RETIREMENT FUNDING?
72%
60%
DECISION
MAKERS
DECISION
MAKERS
MOST
BROKERS
BELIEVE LESS
THAN 50%
OF SMEs
OFFER
MOST
BROKERS
BELIEVE LESS
THAN 50%
OFFER ANY
BENEFIT
63%
51%
STAFF
STAFF
YES 53%
NO 47%
Staff
YES 34%
Decision makers
NO 66%
Brokers
YES 48%
NO 52%
12

15. DRIVERS OF
EMPLOYEE
BENEFIT
ENGAGEMENT
RESPONSIBILITY FOR EMPLOYEE BENEFITS PROVISION
Most respondents feel that the responsibility for employee benefits should be
shared by both the company and its employees:
KEY DRIVERS OF SMEs’ DECISION TO OFFER EMPLOYEE BENEFITS
DECISION MAKERS
EMPLOYEES
20% 50% 30%
25% 40% 35%
Staff responsible
for own well-being
Both parties
responsible for
staff well-being
Company
responsible for
staff well-being
1. Company
Cash Flows
2. Mindset
of Owners
Social responsibility
or a view that
staff leave
3. Need to
Attract & Retain
Skilled Staff
4. External
Pressure
Legislation or
Union
5. Stage
of Business
13

16. SMEs’ KEY DRIVERS OF WHICH EMPLOYEE BENEFITS TO OFFER
DRIVERS OF CHOICE OF BENEFITS:
Typically, companies with 20 or more employees,
consider offering a Group retirement Fund.
Who Drives The Decision: Employer vs. staff, Broker influence
Who Drives Appeal to Staff: Employer vs. staff, Broker influence
Knowledge & Education: Decision makers, Broker influence
Simplicity of Implementing and Managing
Legislation or Industry Requirements
Affordability: Lower contribution, Who pays
14

17. HOW SMEs TYPICALLY CHOOSE AN EMPLOYEE BENEFITS
PROVIDER
PROVIDER
Track Record
Brand
Reputation
Stable
PRODUCT
Performance
Options
Total Solution/Product Range
Flexibility
SERVICE
Easy to Deal With
Skills/Expertise/Advice
COST
BROKER HAS INFLUENCE
Expert
Advises
Single Point of Contact
Understands You and Products
WHY DON’T SOME SMEs OFFER EMPLOYEE BENEFITS?
The seven main reasons, cited by decision makers, why SMEs in South Africa
may not be offering employee benefits are:
1. Affordability – willingness to offer employee benefits depends on turnover,
as it is costly
2. The business is too small
3. Perception that employees should make their own provision
4. Prefer to provide higher salaries
5. Perceived to be too administratively intensive
6. High staff turnover makes it unviable
7. Staff don’t want to contribute

19. SME CONFIDENCE IN THE SA ECONOMY
Despite economic challenges, decision makers largely feel that their own businesses are
still sustainable in the long-term and they have the necessary skills and capacity to deliver
on their business objectives and strategies.
However, most also feel that government does not sufficiently support SMEs in South Africa
and that legislation in this country does little to make it easier to do business here.
There was strong agreement from respondents that the cost of business has increased
significantly in the past year and that the business environment in South Africa is more
competitive than before.
KEY SME CHALLENGES
According to the feedback from decision makers who participated in the survey, the
following are the main issues and challenges facing SMEs in South Africa at present:
ECONOMIC CHALLENGES
• The continued difficult economic situation in the country
• Rising expenses versus lower income
• Lengthy payment terms resulting in cash flow problems
• Increasing competition – particularly from international players and cheap imports
LEGISLATIVE CHALLENGES
• Onerous government policies and a lack of government support
• Stringent requirements and regulations for SME sector
TALENT CHALLENGES
• Lack of skilled labour
• Difficulty retaining qualified staff after investing in their training
• Increasingly legislated labour environment
17
DETAILED FINDINGS:
OVERVIEW OF SMES
IN SOUTH AFRICA

20. Decision makers in SMEs largely (84%) believe that these businesses attract a
different profile of staff member than large corporate organisations and 71% of staff say
it is different working in an SME. 35% of decision makers also felt that SMEs have a higher
staff turnover than larger business. The primary reasons given for this are:
• SMEs are unable to compete with corporate salary packages (79%)
• SMEs are unable to offer large company benefits (73%)
From an SME employee perspective, most are confident that they will keep
their jobs for the next year and there was a 77% agreement that it is unlikely that they will
be retrenched. However, confidence in their retirement plan is average at 63% and most
do not feel that they are in a better position financially than they were one year ago.
There is also not a significant amount of confidence shown by SME employees in the
South African economy at present.
81
77
77
63
53
47
Think I will stay in my
job for at least the next year
Think it is unlikely I will be retrenched
Confident I am able to
make good financial decisions
Confident about my financial retirement plans
Compared to one year ago my
personal financial situation is better
Feel confident about the South African economy
% Agreement
0 20 40 60 80 100
18

22. DETAILED FINDINGS:
SME EMPLOYEE
BENEFITS OVERVIEW
PERCEIVED VALUE OF EMPLOYEE BENEFITS
The majority of decision makers (64%) and SME staff (69%) interviewed believe that the
employee benefits offered by a business play an important part in attracting employees.
The reasons for this belief include:
• Recognition of the need for retirement saving (particularly among employees
older than 35).
• An expectation by skilled staff that employee benefits will be provided by their
employer.
• Cost saving – it’s cheaper than if you were to pay for these benefits as an individual
• A widespread requirement for funeral benefits.
Respondents who said employee benefits were not important factors of which company to
work for, gave the following as the primary reasons:
• Employees need cash more than benefits.
• Employees are not educated enough about employee benefits.
• Prospective employees are only interested in securing the job, not the extra benefits
it offers.
• Most employees do not have a savings mindset.
• Many employees believe that the government will take care of them.
Current economic and employment circumstances are having an influence on company
selection, with many employees accepting jobs even if these don’t offer them the full
benefits they desire.
20

23. PERCEIVED RESPONSIBILITY FOR EMPLOYEE BENEFITS PROVISION
When asked who has ultimate responsibility for the long-term well-being of SME employees,
most respondents felt the responsibility should be shared by both the company and its
employees. Responses by decision makers and employees showed relatively close alignment:
Typically, the results pointed to younger and less skilled employees leaning more towards a
belief that the provision of employee benefits is primarily the responsibility of the company.
DECISION MAKERS
EMPLOYEES
20% 50% 30%
25% 40% 35%
Staff responsible
for own well-being
Both parties
responsible for
staff well-being
Company
responsible for
staff well-being
One reason why SMEs may not offer employee
benefits is the perception that staff should make
their own provision.
21

24. PROVISION OF EMPLOYEE BENEFITS BY SMEs
When asked whether SMEs are, in fact, providing sufficiently for the well-being of
their employees, the variance between responses by decision makers and staff members
increased:
The percentage of SMEs providing employee benefits increased as the turnover and staff
complement of these businesses went up.
DECISION MAKERS
EMPLOYEES
19% 39% 42%
29% 34% 37%
Company HAS
NOT provided
adequately for
employee well-being
Company has
made some
provision, but
NOT ENOUGH
Company
HAS provided
adequately for
employee well-being
57
65
76
83
85
87
7 – 13 Million
13 – 31 Million
31 – 51 Million
51 – 101 Million
101 – 200 Million
2 – 7 Million
% Responses
0 20 40 60 80 100
59
78
78
86
21 to 50
51 to 100
101 to 200
10 to 20
% Responses
0 20 40 60 80 100
22

25. WHY DON’T SOME SMEs OFFER EMPLOYEE BENEFITS?
The seven main reasons, cited by SME decision makers, why SMEs in South Africa
may not be offering employee benefits are as follows:
1. Affordability – willingness to offer employee benefits depends on turnover, as
it is costly
2. The business is too small
3. Perception that employees should make their own provision
4. Prefer to provide higher salaries
5. Too administratively intensive
6. High staff turnover makes it unviable
7. Staff don’t want to contribute
SMEs believe themselves to be unable to
compete with corporate salary packages and
large company benefits.
23

26. EMPLOYEE BENEFIT PREFERENCES AMONGST STAFF
The employees interviewed showed a clear preference for retirement funding and some
type of medical cover as the two most important employee benefits. Funeral cover was the
third most sought-after employee benefit.
13
17
82
92
12
4
4
4
2
Disability Cover
Retirement Fund
Medical Aid
Funeral Cover
Life Assurance
Income Protection
Critical Illness
Education Benefit
Special Sick Benefits such as HIV, TB, Cancer
% Responses
0 20 40 60 80 100
Decision makers in SMEs largely believe that these
businesses attract a different profile of staff members
than large corporate organisations.
24

27. VALUE OF TOP THREE MOST SOUGHT-AFTER EMPLOYEE BENEFITS
FOR STAFF AND COMPANIES
BENEFIT TO COMPANY
BENEFIT TO EMPLOYEE
RETIREMENT
FUND
MEDICAL AID FUNERAL COVER
• Makes the
company more
attractive
• Satisfies a moral
obligation
• Rewards long
service
• Provides security
• Forced savings
• Improved
healthcare
• Reduces
financial burden
of funerals
• Makes the
company more
attractive
• Limits sick leave
/increases
productivity
• Makes the
company more
attractive
• Fewer staff
loans
• Satisfies a moral
obligation
25

29. PERCEIVED BENEFIT TO SMEs OF OFFERING A RETIREMENT FUND
Forces staff to save
Rewards long service
Provides staff with security
Addresses low government pensions
Fulfil a long-term staff need
Is something all staff need
Fulfils a moral obligation to your staff/
provides you with peace of mind
Makes the company a more attractive
option for potential staff
87
80
87
86
89
82
77
76
88
85
83
89
91
87
76
84
COMPANY STAFF
RETIREMENT FUND
% Responses
27
DETAILED FINDINGS:
RETIREMENT FUNDING

30. RETIREMENT FUNDS AND SME SIZE
The research findings among SMEs indicate that access to employee benefits increases
proportionately with company size:
• The percentage of SMEs offering some type of group retirement funding differs
significantly by turnover. For companies with a turnover of less than R13 million less
than 50% offer retirement funds. 70% of companies with a turnover of R50 million and
more, offer such retirement funds to their employees.
• Typically, only companies with 20 or more employees consider offering a Group
Retirement Fund.
• Group retirement funding also increases with the longevity of the SME. Once
companies have been in business for 15 years or more, they appear more likely to
offer retirement funds.
Many employee respondents say they will
need to rely on the government, their children
or other family to survive post-retirement or
will have to continue working.
28

31. RETIREMENT FUNDING AS AN SME PRIORITY
Asked whether SMEs should be making the provision of retirement funding to staff a
business priority, 79% of decision makers said that they should, while 90% of staff and
90% of brokers agreed.
The main reasons given by decision makers for saying that retirement funding should be
a priority for SMEs were as follows:
SOCIAL CONSCIENCE
• Employees don’t save and so the company must force savings
• The “right” thing to do
• Protects the family
• Staff not adequately educated/aware of retirement planning
BUSINESS DECISION
• Rewards long service/loyalty
• Necessary to retain staff
• Provides security which is important
• Provides peace of mind
• Perceived to be more cost effective than if done individually
INADEQUATE GOVERNMENT SUPPORT
• Necessary for retirement as the government pension is not enough
• Relieves tax burden of having to support pensioners
29

32. 66% of decision makers, 47% of staff and 52% of brokers believe that retirement funding
provision is currently NOT on the business agenda for most SMEs in South Africa.
The reasons given by SME decision makers for this lack of focus by SMEs on retirement
funding provision include:
1. Financial constraints in SME businesses
2. The cost is too high
3. SMEs are just trying to survive
4. It’s the individuals’ choice/must look after oneself
5. It’s much of an administrative burden
6. High staff turnover
7. Lack of knowledge of the options available
8. Staff don’t want to pay for it
9. Not incentivised to offer it
10. Too few employees to make it worth their while to do anything
DECISION MAKERS’ REASONS FOR NOT PROVIDING
RETIREMENT FUNDING
Most SME decision makers feel that government
does not sufficiently support SMEs in South Africa.
30

33. PERCEIVED RESPONSIBILITY FOR RETIREMENT FUNDING
When asked who has the main responsibility for ensuring that employees are saving
towards their retirement, the responses were as follows:
EMPLOYEES’ PREPAREDNESS FOR RETIREMENT
There is generally a fairly good understanding of the typical retirement funding
requirement for employees. SME decision makers and staff believe that most people will
need between 70% and 89% of their current salary in order to maintain their quality of
life once they retire.
Most respondents felt that in order to deliver this level of post-retirement income, employees
need to be investing at least 20% of their current salary into a retirement fund of some sort.
Despite this understanding, only 54% of SME staff surveyed believed that, based on their
current retirement savings, they will eventually be in a position to self-fund their retirement.
This perception or preparedness differed vastly according to race, age, gender and current
employment position.
In terms of who has the responsibility to pay for such retirement funding, 88% of decision
makers felt that this was also shared equally, with 61% of these saying that the payment
should be split 50:50 between staff member and employer.
DECISION MAKERS
EMPLOYEES
59% 19% 9%
68% 12% 3%
Shared equally
between employer
and employee
Staff only Company only
31

34. PERCENTAGE % OF STAFF WHO BELIEVE THEY CAN SELF-FUND
55
46
62
52
White
Black
Coloured
Indian
% Responses
0 20 40 60 80 100
62
60
33
65
50
27
Middle Management
Senior Management
Executive
Supervisor
Other staff in
administration & sales
Other staff in production,
stores & factories
% Responses
0 20 40 60 80 100
52
49
57
58
47
25 to 34
18 to 24
35 to 44
45 to 54
55 to 64
% Responses
0 20 40 60 80 100
BYPOPULATIONGROUPBYAGEBYLEVELINTHECOMPANY
32

35. Decision makers surveyed believe there is a clear trend in terms of certain employees
being less prepared than others for retirement. According to them, the less prepared staff
are typically:
• Those in lower income brackets – mainly as a result of affordability issues, lack of
knowledge, belief that government will provide and low contributions.
• Young employees – who think they still have lots of time to prepare for retirement or
have too many other priorities and expenses relative to their income.
• Staff members who change jobs and withdraw benefits.
• Staff members who are in debt or living beyond their means.
SME staff who believe they are not adequately prepared for retirement, say they will rely
financially on the following people or institutions to support them once retired:
CHILDREN
GOVERNMENT
FAMILY
COMBINATION
OF CHILDREN AND
GOVERNMENT
CONTINUE TO
EARN INCOME
14%
4%
26%
16%
26%
Blue collar staff in the
organisation have a stronger
reliance on government.
33

36. PRESERVATION
88% of SME decision makers and staff surveyed agree that preservation of retirement
savings is important. However, perceptions by SMEs of likely or actual preservation activity
shows a clear gap between this understanding and the incidence of preservation.
• 52% of SMEs believe that less than 20% of staff preserve all their retirement monies
when leaving or changing jobs.
• 60% of SMEs believe less than 20% of staff withdraw a small portion in cash and
preserve the rest.
• 50% of SMEs believe 80% or more of staff take all or most of their benefit in cash.
The main factors that SMEs believe impact on members not preserving their retirement
benefit are as follows:
% Responses
Strong influencer
not to preserve
Strong influencer
to preserve
0 20 40 60 80 100
59
58
57
50
40
81
Withdrawal benefit is too small
to preserve
Desire to access cash
A lack of awareness of
preservation options
Lack of advice on how to preserve
Fear of making the wrong decision
Cost of transferring to another fund
34

37. USAGE OF MEMBER LEVEL INVESTMENT CHOICE
39% of SMEs offering retirement funds say these funds include member level investment
choice. However, a third of the SMEs offering this choice say that more than 90% of their
employees prefer to select the default investment option.
Respondents across staff and decision makers agreed that the main reasons for so many
members opting for the default investment option are:
• They are not financially educated or astute to make investment decisions.
• They want less risky investments.
• They simply do not specify a different preferred investment option.
Based on these responses it becomes apparent that education of staff around the following
issues is critical:
• Retirement benefit values and projections.
• How investments work and the choices offered.
• How to make changes as life circumstances change.
The cost of business has increased significantly
in the past year and the business environment in
South Africa is more competitive than before.
35

38. UNIQUE SME RETIREMENT FUNDING REQUIREMENTS
Most of the SME decision makers believe that their businesses have unique requirements in
terms of their retirement fund solution.
Unique Requirements
11% Don’t know
53% Yes
36% No
COST
• Lower costs
/cheaper
(53%)
PRODUCT
• Flexibility in
the make-up
of the prod-
uct (30%)
• Simplicity/
ease of un-
derstanding
the product
(23%)
• Being able
to add
options
on when
needed/
or afforded
(16%)
• Automated
or very easy
decision
making with
regard to
investment
choices
(5%)
ADMIN
• Easy to
implement
(16%)
• Low admin-
istration
burden
(14%)
• Excellent ad-
ministration
and claims
process
(11%)
RETURN
• Growth on
retirement
fund/good
growth/
good returns
/return on
investment
(9%)
• Secure/
safe/not
too risky/
reliability
(5%)
PRESERVATION
• A way to limit
withdrawals
/taking the
cash (7%)
EDUCATION
• Education
for staff
(17%)
The primary requirements were listed as follows:

39. GOVERNMENT SUPPORT OF RETIREMENT
FUNDING AMONGST SMEs
SME decision makers were asked how they felt the SA government could encourage uptake
of retirement funding provision amongst SMEs in the country.
The five areas of government support/intervention receiving the most responses were:
NOTE: % RESPONSES
32%
9%
18%
8%
10%
PROVIDE TAX
BENEFIT/
INCREASE TAX
BENEFIT
MAKE
RETIREMENT
FUNDING MORE
AFFORDABLE
CONTRIBUTE
TO PREMIUMS
EDUCATION
ON THE
IMPORTANCE
OF RETIREMENT
FUNDING
MAKE
RETIREMENT
FUNDING
COMPULSORY
37

41. REASONS FOR CHOOSING RETIREMENT FUND PROVIDER
SME decision makers listed the following as their primary reasons for selecting a given
retirement fund service provider:
Detailed breakdown of all decision drivers in SME retirement
fund provider choice
% Responses
0 20 40 60 80 100
1
2
2
4
5
7
8
8
10
10
10
18
20
20
25
27
34
Asset classes
Management team
Size of company
Education/Communication to staff
Investment philosophy
Service provided to company
Flexibility
Performance
Track record
Reputation
Fees charged
Financial stability/Stability
Service provided to staff
Range of choice of investment
Skills & expertise
Advice/recommendation of consultants
Ability to provide a total packaged service
39
DETAILED FINDINGS:
EMPLOYEE BENEFIT
SERVICE PROVIDERS

42. Trustworthiness, stability, reliability, good products, and meeting specific needs featured as
constant decision drivers for all SMEs when choosing a retirement fund provider.
Broker vs. Direct
There is a fairly even split between SMEs choosing to deal directly with service providers
(52%) for their employee benefits requirements and those who choose to work with brokers
(48%). Responses reveal that the bigger the SME, the more likely there is to be a broker
involved.
The main reasons given for either choice are as follows:
1. More knowledgeable
2. Single point of contact
3. More convenient
4. More likely in businesses with
more than 50 employees
5. A bigger % of older businesses
deal through brokers
1. Cheaper
2. Quicker problem resolution
3. More likely to be a newer
business
4. Where more responsibility is
placed on staff to look after
themselves
REASONS FOR BROKER REASONS FOR DIRECT
40

43. CONFIDENCE IN RETIREMENT SOLUTIONS
Those SMEs that offer retirement funds demonstrated fair levels of confidence in those funds
and their providers, but not all think they will be adequately provided for:
Staff of SMEs that offer retirement funds largely mirrored these confidence levels, however,
there is room for improvement in terms of staff confidence in the ‘adequate provision’ and
‘claims process ease’ indicators.
COMPANY RETIREMENT FUND WILL
PROVIDE ADEQUATELY
COMPANY RETIREMENT FUND WILL
PROVIDE ADEQUATELY
ADMINISTRATION IS DONE PROPERLY
CLAIMS PROCESS IS EASY
INVESTMENT RETURNS ARE IN LINE
WITH EXPECTATIONS
ADMINISTRATION IS DONE PROPERLY
COSTS ARE REASONABLE
FUND IS EASY TO UNDERSTAND
67
65
84
69
78
78
76
75
DECISION MAKERS
CONFIDENCE INDICATOR
STAFF CONFIDENCE
INDICATOR
PERCENTAGE RATING
PERCENTAGE RATING
41