Making retirement and risk benefits accessible

Risk Benefits

Making retirement and risk benefits accessible

President Ramaphosa believes that the growth of our economy will be sustained by small businesses. How can corporate South Africa help SMME’s to overcome the challenges that they face, including the provision of crucial benefits for employees in this vital sector?  

The cash flow strain of COVID on SMME’s and the backlash of the Ukraine conflict could result in SMME’s suspending their retirement and risk benefit plans for employees, or cause well-intended plans to initiate these benefits to employees being put on ice.

Even prior to COVID, a difficulty for SMME business owners with staff compliments of 15 or below was the minimum entry levels required by some large employee benefit management funds to participate. With cash flow proving to be a challenge for many SMME’s, a minimum contribution of 5% required by certain funds exacerbated the problem.

Why does accessibility to retirement funds matter?

The latest SEDA (Small Enterprise Development Agency) report noted that about 2.5 million SMME’s in South Africa provide employment for approximately 15 million employees. It is unclear exactly how many SMME employees enjoy retirement benefits but according to Fedusa (Federation of Unions of South Africa), only one in three adults, including pensioners, have some form of pension.

The Baseline Study of Small Businesses in South Africa 2016 indicated approximately 180 000 SMME’s employing 10 employees or less. This means that the typical qualifying criteria of fifteen members by many Funds places the provision of retirement benefits beyond the reach of most micro enterprises (10 employees or less).

How do we make retirement and risk benefits more accessible? The answer could lie in reducing the minimum qualifying criteria for acceptance into a fund. Salt Employee Benefits (SALT EB) offers the flexibility to empower small businesses to offer meaningful employee benefits.


Wimpie Vermaak
082 861 0297