By Deepesh Desai; CEO of FNB Life
For many South Africans, the idea of retirement has long been tied to a familiar belief that their company pension will take care of all their financial needs once they stop working It's a comforting thought, but it's outdated and growing numbers of people are reaching retirement age only to discover that what they've saved in their employer provided pension fund's plan isn't enough to support them for the rest of their lives. This shortfall forces many prospective retirees to make tough decisions around working longer, selling assets, or having to rely on family.
The shift started years ago when companies moved away from defined benefit (DB) funds, where the employer carried the risk and guaranteed your payout when you retired, to defined contribution (DC) funds, where the payout depends on what you (and your employer) put in, and how well it's invested. That means the responsibility for securing your retirement - and the risk of not doing so - now sits squarely with you.
Why relying only on your employer's pension plan is risky
If you're depending solely on your employer's retirement fund, it's worth stepping back and looking at the bigger picture. These plans aren't always flexible. If you change jobs, you could lose momentum in your savings. Many employees have no clear idea of what their retirement payout will look like, and are shocked when they find out it falls short. Employer plans also tend to focus only on your retirement income, without factoring in other needs like tax planning, medical expenses or leaving something behind for your family.
That's not to say employer plans are bad - they are essential and very valuable. But they simply aren't designed to carry the responsibility for your retirement on their own.
Rather take a blended approach
If you combine your employer fund with additional personal retirement savings, like retirement annuities, tax-free savings accounts or unit trusts, you will put yourself in a much stronger financial position to enjoy the retirement you want. This mix of investments allows you to be more flexible in the way you save and invest for your retirement. It also gives you more control over how your money is invested, and allows you to adjust things as your life changes or as you get closer to retirement and protecting your savings becomes more important than growing them.
Taking control of your retirement savings also allows you to plan for more than just financial survival after you stop working. You can proactively work towards goals like retiring earlier, funding a side hustle, securing proper healthcare and even looking after your family. This kind of future-focused thinking can be the difference between just managing to retire and retiring well.
Employers - you still have a role to play
While employees need to take greater ownership of their retirement, employers also need to step up. Just offering a pension savings fund isn't enough anymore. Companies must help their employees understand how these plans work, give them realistic retirement savings projections, and make sure they have access to the tools they need to manage their contributions and expand their retirement planning approach. Retirement education shouldn't be something that only happens during employee onboarding and induction; it needs to be ongoing throughout their careers.
The 2025 FNB Retirement Survey findings point to a big gap here, with many employees feeling their employers aren't doing enough to support their planning. That needs to change.
What employees should do right now
If you have an employer-provided retirement plan, take some time to look at it very carefully and ask some key questions, like:
If you don't like the answers to some or all of these questions, now is the time to act and take control of your retirement planning and saving. If you're not sure how to do that, speak to a financial adviser about how to set up a personal savings plan, or ask your employer for more information.
Of course, the point isn't to leave your employer-provided pension fund; it's to stop thinking of it as all the retirement planning you need to do. Remember that retirement isn't something that just happens to you. It's a time of your life that you have to consciously work towards and plan for. And the sooner you take control, that time of your life will be.
