THE OLD MUTUAL RETIREMENT MONITOR – IN ITS 3 RD YEAR Examines pre-retirement awareness among working South Africans Pays particular attention to confidence levels in financial provision for retirement Old Mutual Corporate applies results to: Direct our activities Improve engagement with members Increase understanding of retirement saving landscape Help members make better decisions

2012 measure: 58% (2011:51%) of participants are members of an employer-offered pension / provident fund 1000 face-to-face interviews conducted with respondents screened as follows: All are employed full time All fall between the ages of 18 and 64 years None work in advertising, media, life assurance or retirement funding related industries All live in metropolitan areas Sample is quota controlled by personal income to allow for analysis by income group Quota controls also applied in respect of gender, race, area and age RESEARCH OBJECTIVES AND METHODOLOGY

THIS YEAR SOME KEY TRENDS HAVE BEEN IDENTIFIED Global financial turmoil still not settled Awareness levels around retirement are improving Increasing economic pressure on many members - forcing a shift in financial priorities to shorter term objectives Members of retirement funds remain more financially confident than non-members Increasing number of people plan to work past retirement Strong link between advice and the preservation of retirement savings Appears to be a growing realisation that preservation is important Engagement with fund management and trustees remains low, but satisfaction and trust levels still high Key need for information and communication that helps people to make informed decisions

OVERALL SATISFACTION HAS IMPROVED SLIGHTLY Driven mainly by an improvement in the awareness of being ready for retirement Members of retirement funds show a more positive attitude towards financial matters in general.

AWARENESS LEVELS AROUND RETIREMENT IS IMPROVING

More people are aware of their retirement status However, people at lower income levels are less likely to be sure of their status

INCREASING ECONOMIC PRESSURE FORCING A SHIFT IN FINANCIAL PRIORITIES South Africans struggling to make ends meet Many members have been forced to shift their financial priorities to shorter-term objectives Spending retirement benefits on immediate needs

INCREASING ECONOMIC PRESSURE FORCING A SHIFT IN FINANCIAL PRIORITIES Shift of spending away from long-term saving vehicles such as endowments to shorter-term savings Increasing medical expenses

SAVINGS OBJECTIVES STRONGLY INFLUENCED BY AGE AND INCOME Lower income individuals prioritising debt repayment and household expenses Younger people more focused on acquiring assets

MEMBERS OF RETIREMENT FUNDS MORE FINANCIALLY CONFIDENT Fund members more confident than non-members on all dimensions

MORE PLAN TO WORK POST RETIREMENT More people seeing post-retirement work as a means by which they will fund part of their retirement income needs Cash savings seen less as a source of retirement income “THINKING ABOUT THE SAVINGS, INVESTMENTS AND OTHER SOURCES THAT YOU WILL DRAW ON IN RETIREMENT, WHAT % DO YOU THINK WILL COME FROM….”

THERE IS A STRONG LINK BETWEEN ADVICE AND THE PRESERVATION OF RETIREMENT SAVINGS Where people are getting advice, levels of preservation at the highest While the sample size is low, our own experience from people withdrawing shows that those who were contacted tended to preserve

DESPITE MOST TAKING CASH, THERE APPEARS TO BE A GROWING REALISATION THAT PRESERVATION IS IMPORTANT Unfortunately, financial realities still result in cash benefits being taken Behaviour only likely to change if immediate needs can be met.

ATTITUDES TO TRUSTEES AND ADMINISTRATORS

GENERALLY ENGAGEMENT WITH FUND MANAGEMENT REMAINS LOW BUT SATISFACTION AND TRUST STILL HIGH Slight improvement in awareness levels on the 2011 results, but members still disengaged from their retirement funds Typically have little or no knowledge of who their trustees are Majority don’t vote in trustee elections

DESPITE LOW ENGAGEMENT LEVELS, MEMBERS REMAIN VERY TRUSTING OF THEIR TRUSTEES

KEY NEED FOR INFORMATION THAT ASSISTS PEOPLE TO MAKE INFORMED DECISIONS People desire information that will help them make appropriate choices Particular need in terms of adequacy, tax and risk benefits 35% of respondents claim to not receive benefit statements

HELPING CONSUMERS TO BECOME BETTER EDUCATED Incumbent on the Financial Services industry to help consumers become better financial decision makers Old Mutual Corporate educates more South Africans than any other on financial matters Does this via its Financial Wellbeing Programme (FWP) Content informed by the insights of the Retirement Monitor Introduced to help employees of corporate clients become more informed about their financial affairs Especially important for consumers at the lower end of the income spectrum who are reliant on either the government pension or their children Practical and useful advice, via FWP, aimed at breaking this dependency

PENSIONER SATISFACTION HAS IMPROVED SLIGHTLY

Clear that there is much work still to be done by all stakeholders in the retirement industry We have a responsibility to offer guidance, advice and accessible savings products We hope that these findings of the 2012 Retirement Monitor provide insights to help all stakeholders build a better retirement landscape TO SUM IT UP…