Alexander Forbes, the country’s leading retirement fund administrator, says large gaps still exist in the market where established firms are not providing cover for their employees, despite being profitable entities.
Companies in Botswana are not compelled to offer their employees retirement funds. Instead, the law prescribes that those employees without retirement funds should be covered by gratuities and severance.
Alexander Forbes board member, Paul Masie told BusinessWeek that the financial services giant was focussing on bridging the gap by offering tailor-made retirement packages. He said while some entities in the private sector had the potential to establish retirement funds for their employees, they did not do so due to lack of education on the importance of these.
“Our main focus will be on the private sector and it is in line with the economic trends,” he said.
“We are moving away from the product-push to the solution-oriented approach as we endeavour to also cater for the informal sector which is rapidly growing.
“We need to get self-employed people to have retirement benefits for themselves and even their employees.”
Masie, a veteran leader in the local retirement fund arena, urged government to consider strengthening the retirement provisions and scrap the statutory severance benefits arrangement, saying this was being misused. “There is a tendency that people who receive those severance benefits generally don’t end up saving them for retirement,” he said.
Alexander Forbes Emerging Markets CEO, Bonga Mokoena said the group’s approach was to identify individuals’ needs and partner with them through tailor-made retirement packages.
“We want to become part of individuals’ financial wellbeing, create awareness as well as help people think beyond the traditional way of doing business. We have to evolve and align ourselves with the latest trends in order to be relevant in the digital era,” he said.