South Africa’s retirement reform : lessons from the Chilean reform enacted in 1981

Abstract

“Today’s actions create tomorrow’s legacy.” This was the theme of the annual convention of the Institute of Retirement Funds held in Durban in August of 2008. The aim of this exploratory research is to gain an understanding of the steps that Chile went through in implementing its retirement reform and identify its strengths and weaknesses. Finally, the research will then draw lessons that will better inform, as well as assure the debate and discussion currently taking place regarding South Africa’s retirement reform. In-depth literature review of the Chilean retirement reform was done to tease out the propositions about its reform. Then eleven well-known experts in the fields of pension and retirement were interviewed face-to-face, following a semi-structured interview guide. Judgemental sampling, using the snowballing technique was utilised. The data was analysed using a combination of general analytical procedure principles, content analysis, and constant comparative analysis. Taking unemployment, systematic inequity, and HIV into account, the research recommends a multipillar system with a universal non-contributory first pillar, and a mandatory defined contribution secondary pillar, with some caveats. It concludes with a matrix, drawn from lessons in the Chilean reform, and the expert interviews, with design concerns, design recommendations, as well as the expected outcome based on the recommendation.