Original Research

Helping South Africans achieve a better income in retirement: a critical evaluation of the impact of treasury proposals

Jesse A. De Beer
Journal of Economic and Financial Sciences | Vol 8, No 1 | a90 | DOI: https://doi.org/10.4102/jef.v8i1.90 | © 2015 Jesse A. De Beer | This work is licensed under CC Attribution 4.0
Submitted: 21 December 2017 | Published: 30 April 2015

About the author(s)

Jesse A. De Beer, University of the Free State, South Africa

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Retirement income security is an issue relevant to the majority of South Africans, many of whom are financially inexperienced and illiterate. South Africa has a sophisticated retirement industry offering a very wide range of choice of annuity products, but these are often not designed to optimise choices by rather unsophisticated investors. This article provides an overview of issues in the South African income withdrawal market, as well as policy remedies proposed by National Treasury to deal with these issues. The aim of this paper is to provide a critical analysis of these policy proposals, using a behaviourally informed framework to financial regulation (Barr, Mullainathan & Shafir, 2008). It recognises that policy remedies need to take into account the realities of how people make retirement income decisions, and how the institutional environment impacts on this. The results of the research suggest that the main policy proposal – simplifying the retirement income withdrawal landscape through the use of default options – is only a partial solution to the problem of unsophisticated consumers who must make several challenging decisions. The research contributes to the literature by providing a more complete, integrated view of the factors that shape retirement income withdrawal decisions and offers practitioners several insights into appropriate reform of the retirement income market.


retirement planning; behavioural economics; choice architecture


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