South Africa Statutory and Private Employee Benefits, 2023 Update

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South Africa Statutory and Private Employee Benefits Report Overview

South Africa has a well-developed social security system, which covers employees and their dependents, as well as unemployed persons and individuals. The Department of Labor (DoL) is the central labor administration body and is regulated by the Ministry of Labor.

The South African insurance and social security system is composed of three pillars: the non-contributory pillar (taxed pillar), the contributory pillar, and the private voluntary pillar. The contributory pillar includes social insurance, while the non-contributory pillar includes social assistance and social relief distress. The private voluntary pillar covers pensions, short-term, work-injury, and healthcare benefits, and is usually voluntary, but can become obligatory based on a company’s policy, work, industry, and sector.

The South Africa employee benefits market research report provides in-depth industry analysis, information, and insights into employee benefits in South Africa, including an overview of the state and compulsory benefits in South Africa, detailed information about the private benefits in South Africa, insights on various central institutions responsible for the administration of the different branches of social security and the regulatory framework of the employee benefits in South Africa.

Key Regulations Pension Funds Act, 1956, The Basic Conditions of Employment Act, 1997, The Divorce Act, 1979, The Financial Advisory and Intermediary Services Act, 2002, The Financial Institutions (Protection of Funds) Act, 2001, The Financial Sector Regulation Act, 2017 (the FSR Act), and The Financial Services Board Act, 1990
Key State and Compulsory Benefits Retirement Benefits, Death in Service, Long-Term Disability Benefits, Short-Term Sickness Benefits, Medical Benefits, Workers’ Compensation Insurance, Maternity and Paternity Benefits, and Other Benefits
Key Private Benefits Retirement Benefits, Death Benefits, Medical Benefits, Disability Benefits, Accidental Death and Dismemberment Benefits, and Other Benefits

Regulations Guiding Employee Benefits Market in South Africa

Some of the key regulations guiding the employee benefits market in South Africa are Pension Funds Act, 1956, The Basic Conditions of Employment Act, 1997, The Divorce Act, 1979, The Financial Advisory and Intermediary Services Act, 2002, The Financial Institutions (Protection of Funds) Act, 2001, The Financial Sector Regulation Act, 2017 (the FSR Act), and The Financial Services Board Act, 1990 among others.

South Africa Employee Benefits Market Segmentation by State and Compulsory Benefits

The key state and compulsory benefits offered by employers in South Africa are retirement benefits, death in service, long-term disability benefits, short-term sickness benefits, medical benefits, workers’ compensation insurance, maternity and paternity benefits, and other benefits.

Workers’ Compensation Insurance: The Compensation Fund (CF) is a Schedule 3A Public Entity of the Department of Employment and Labour. The purpose of this fund is to pay benefits to employees in case of work injury or occupational diseases, irrespective of whether employers have paid the necessary premiums or not. The coverage will be provided to employed persons, including some contract workers and military personnel. The CF offers services like employer services, claims services, medical services, financial services, legal services, and rehabilitation and orthotics services.

Short-Term Sickness Benefits: The UIF covers sickness benefits. The coverage is provided for employees who work more than 24 hours a month, unemployed individuals, and individuals with earnings of less than 33.3% of the regular wage. The employee must have contributed to UIF and also have accumulated credits (paid leave) before the occurrence of illness to avail the benefits.

South Africa Employee Benefits Market Segmentation by Private Benefits

The key private benefits offered by the employers of South Africa are retirement benefits, death benefits, medical benefits, disability benefits, accidental death and dismemberment benefits, and other benefits.

Death Benefits: Employers in South Africa provide death benefits through a group life insurance plan, group assurance, and group risk solutions. The group life insurance plans cover events like a natural death, accidental death, funeral benefits, children’s education, and spouse’s and children’s benefits.

Disability Benefits: Employers cover short-term disability through income protection plans. According to Sanlam’s Survey Benchmark Report 2022, more than 47% of employers in the country provide group life and disability coverage under a retirement fund, more than 10% of employers provide benefits under an unapproved benefit scheme, and the remaining employers provide coverage under both schemes.

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Scope

This report provides a detailed analysis of employee benefits in South Africa –

  • It offers a detailed analysis of the key government-sponsored employee benefits, along with private benefits.
  • It covers an exhaustive list of employee benefits, including retirement benefits, death in service, long-term disability benefits, medical benefits, workmen’s compensation insurance, maternity and paternity benefits, family benefits, unemployment benefits, Long-term care benefits, leaves and holidays, and private benefits.
  • It highlights the economic and regulatory situations relating to employee benefits in South Africa.

Key Highlights

• The South African Social Security Agency (SASSA), Financial Sector Conduct Authority (FSCA), and Department of Labor (DoL) organizations are responsible for the functioning of the overall social security system.

• A person’s national insurance contribution is determined based on their income.

• An insured person who is unemployed or unable to work and whose benefits have been exhausted is entitled to a credited contribution.

• In South Africa, employers provide voluntary retirement benefits to their employees through social security benefits.

Reasons to Buy

  • Make strategic decisions using in-depth information related to employee benefits in the country.
  • Assess employee benefits of the market, including state and compulsory benefits and private benefits.
  • Gain insights into the key employee benefit schemes offered by private employers in the country.
  • Gain insights into key organizations governing the employee benefits market, and their impact on companies.

Table of Contents

  • 1. Executive Summary
  • 2. Introduction
  • 2.1 What is this Report about?
  • 2.2 Definitions
  • 3. Country Statistics
  • 4. Overview of Employee Benefits in South Africa
  • 5. Regulations
  • 6. State and Compulsory Benefits
  • 6.1 Retirement Benefits
  • – Introduction
  • – Eligibility
  • – Benefits
  • – Payment options
  • – Contribution

  • 6.2 Death in Service
  • – Introduction
  • – Eligibility
  • – Benefits
  • – Payment options
  • – Contribution

  • 6.3 Long-Term Disability Benefits
  • – Introduction
  • – Eligibility
  • – Benefits
  • – Payment options
  • – Contribution

  • 6.4 Short-Term Sickness Benefits
  • – Introduction
  • – Eligibility
  • – Benefits
  • – Payment options
  • – Contribution

  • 6.5 Medical Benefits
  • – Introduction
  • – Eligibility
  • – Benefits
  • – Payment options
  • – Contribution

  • 6.6 Workers’ Compensation Insurance
  • – Introduction
  • – Eligibility
  • – Benefits
  • – Payment options
  • – Contribution

  • 6.7 Maternity and Paternity Benefits
  • – Introduction
  • – Eligibility
  • – Benefits
  • – Payment options
  • – Contribution

  • 6.8 Other Benefits
  • – Unemployment benefits
  • – Family benefits
  • – Grant-in-aid
  • – Social relief distress
  • – Leave and holidays

  • 7. Private Benefits
  • 7.1 Retirement Benefits
  • 7.2 Death Benefits
  • 7.3 Disability Benefits
  • 7.4 Medical Benefits
  • 7.5 Accidental Death and Dismemberment Benefits
  • 7.6 Other Benefits
  • 8. About GlobalData
  • 9. Contact Us

Table

Table 1: South Africa – Employer Medical Subsidy in Service of the Employee

Table 2: Insurance Industry Definitions

Table 3: South Africa – Country Statistics, 2022

Table 4: South Africa – Employer Medical Subsidy in Service of the Employee

Table 5: South Africa – Leaves: Fixed National and Public Holidays 2023

Table 6: South Africa – Share in Hybrid funds based on the fund class, March 2023

Table 7: South Africa – Share in DB funds based on the fund class, March 2023

Table 8: South Africa – Share in DC funds based on the fund class, March 2023

Frequently asked questions

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