Only 10% of contributing members of retirement funds administered by Alexander Forbes are on track to replace 75% of their final pensionable salary in retirement, according to the group’s latest Member Insights report. The finding, reported by BusinessTech on 14 October 2026 from Bloomberg, is better than the 6% recorded in 2021, but it still means nine in ten members are short of the target.
The measure used is the replacement ratio, which is the share of a member’s final pensionable salary that their retirement income is expected to replace. The 75% mark is the benchmark Alexander Forbes uses for a comfortable retirement.
What the report found
The average projected replacement ratio for contributing members is 46%, up from 40% five years earlier. The report covered more than 1.1 million active contributing member records across more than 310 retirement funds and 2 300 employers, according to Briefs Finance, which also carried the Bloomberg report.
Vickie Lange, head of solutions enhancement at Alexander Forbes, said: “Nine out of 10 contributing members are still not on track to replace at least 75% of their final pensionable salary, so there is considerable work to be done.” She described considerable work still to be done.
The report looked at four factors that shape retirement income: preserving savings, contributing enough, staying invested long enough and handling short-term money stress.
Contributions fall short of the target
Reaching a 75% replacement ratio requires saving 15% of salary for 40 years. The average contribution rate in the funds covered is 11.2%, below that level.
Retirement age also matters. The normal retirement age is 65, but most people retire as early as 61. Lange said the expected replacement ratio is 45% at age 60 and rises to 68% for members who stay until 65.
The economy behind the numbers
The reporting links the slow progress to a weak economy and pressure on household budgets. More than a third of the workforce, about 8.5 million people, is unemployed.
Organisation for Economic Co-operation and Development (OECD) data cited in the report show that the average South African can expect retirement income equal to 17% of their working salary. The comparable figures are 96% for Brazil and 84% for Turkey.
Early access to savings
The report notes that a system allowing early withdrawals from part of retirement savings began in September 2024, and that Alexander Forbes has paid out about R17 billion under it. This is the two-pot system, which went live on 1 September 2024.
As described by Moonstone in March 2026, up to one-third of new contributions go into a savings pot and the remaining two-thirds stay in a retirement pot. Members received a once-off allocation of 10% of existing savings at implementation, capped at R30 000. They may make one withdrawal per tax year, of at least R2 000.
Withdrawals for the 2026/27 tax year opened on 1 March 2026. Moonstone reported that Alexander Forbes recorded more than 140 000 claims in the first week of March, with about 84 000 already paid. Momentum reported 38 148 claims in the first 11 days of March, and said 71% of claims are below R10 000.
Repeat use is a concern for some providers. Sanlam said about 75% of its 2025 claimants were repeat users. Danie van Zyl, head of the Smoothed Bonus Centre of Excellence at Sanlam Corporate, called repeat behaviour his “big concern.” Lizl Budhram, head of advice at Old Mutual Personal Finance, said: “The reform works when the preserved portion has time to grow.”
The Alexander Forbes report does not say how much of the gap in replacement ratios is due to withdrawals. It describes early withdrawals as one of several pressures, alongside low contributions and early retirement.
What the figures cover
The 10% figure applies to members of funds administered by Alexander Forbes, not to every South African saving for retirement, and the 75% target is a benchmark rather than a legal requirement. Briefs Finance concludes that more people are improving their odds than a few years ago, while contribution rates, time invested and preserving savings through hard periods still determine the outcome.
Source: BusinessTech, with additional reporting from Briefs Finance and Moonstone.
