South Africa’s retirement industry is entering a period of accelerated change, with new data revealing how governance, member behaviour and risk management are being reshaped in real time.

According to PwC South Africa’s eighth Retirement Funds Survey,  which gathered insights from 52 retirement funds across a range of sizes, 90% of funds remunerate their Principal Officers, 87% now include cybersecurity or data protection within their fidelity cover, and nearly half (46%) reported that fewer than 10% of members accessed savings under the new Two-Pot Retirement System in its first year.

The findings reflect a system under pressure to balance accessibility with preservation, while strengthening governance structures and operational resilience.

“Change is becoming more rapid in South Africa’s retirement system, reshaping how people save, withdraw and protect their future,” said Julanie Basson, Retirement Funds Leader at PwC South Africa. “Funds across the country are being pushed to rethink long-standing practices as member needs shift and new risks emerge.”

She added that the evolving landscape is also influencing how leadership roles are structured and rewarded, particularly at board and Principal Officer level.

One of the clearest signals of professionalisation is the shift in remuneration practices for boards of fund members and Principal Officers. The survey shows that 90% of respondents confirmed that their Principal Officer is remunerated. In 57% of cases, the board determines the level of remuneration, while 32% rely on a participating employer to set compensation.

Board remuneration structures are also becoming more formalised. Many funds now opt for fixed fees per meeting, while others split between hourly rates and retainer-based models. Principal Officers, as expected, are typically compensated through monthly or annual retainers.

Between 2023 and 2026, the proportion of funds remunerating all board members rose from 16% to 25%, suggesting a move toward broader and more consistent compensation practices. Over the same period, funds that remunerate only independent or professional trustees and pensioner representatives declined from 59% to 54%, while those with entirely unpaid boards dropped from 26% to 21%.

The survey further details compensation levels. Average hourly board rates ranged from R2,929 to R4,727, with a maximum reported rate of R6,820 per hour. For funds using fixed-fee-per-meeting structures, average fees ranged between R7,690 and R15,303 per meeting, with a maximum of R28,957.

“These shifts suggest that funds are re-evaluating how they structure and support boards, moving towards balanced remuneration practices,” Basson noted.

The introduction of South Africa’s Two-Pot Retirement System on 1 September 2024 marked one of the most significant structural reforms in recent years. The system allows members to access up to one-third of post-September 2024 contributions before retirement for emergencies, without resigning from employment.

While concerns were raised about widespread early withdrawals, survey data suggests relatively contained uptake in the initial phase. In the first year, 46% of participants indicated that fewer than 10% of their members accessed their savings benefits. By the second year, 54% reported that less than 10% of members had taken withdrawals.

The demographic profile of those withdrawing is notable. Some 43% of respondents indicated that the average age of members electing to access savings was between 30 and 40 years old — a cohort often navigating mid-career financial pressures such as home loans, childcare or lifestyle adjustments.

However, the long-term implications remain a concern. Early withdrawals can materially reduce eventual retirement capital, particularly if compounded over time.

“Effective communication is essential to prevent long-term, irreversible damage to financial security,” Basson said, emphasising the need for funds to guide members more actively in understanding the consequences of accessing retirement savings early.

Operational resilience is another defining theme of the survey, with cyber risk now firmly embedded in governance agendas. An overwhelming 87% of respondents indicated that their fund’s fidelity cover includes cybersecurity or data protection. Of these, 47% reported that cover is uncapped, while 40% indicated that it is capped. Where caps apply, limits range widely, from R100,000 to as much as R500 million.

The findings underscore the growing recognition that cyber threats are no longer peripheral risks but central operational concerns, particularly as digital access to retirement savings increases.

“South Africa’s retirement funds are moving into a new operating reality,” Basson said. 

“Member behaviour is changing under the Two-Pot system; governance roles are becoming more professionalised, and cyber risk is now a standing item rather than an occasional threat.”

She added that the common thread across remuneration practices, member withdrawals and cybersecurity readiness is the need for clearer accountability and stronger communication.

“The evidence points to the same destination: better communication, clearer guidance, and the preparedness to meet what’s coming next,” she concluded.