If you are more than seven years from normal retirement age, your retirement savings will be fully invested in the Balanced Portfolio.

This is the Fund portfolio that has been most negatively affected by the recent fall in share markets in the first quarter of 2020.

Fortunately, if you are invested in the Balanced Portfolio, you still have some time before you retire. There is reason to believe that your savings will recover from any recent losses with this longer time horizon. Take a look at this article, which shows that historically the investment markets have always recovered.

For members aged 59 to 61 who are leading up to retirement, a portion of your retirement savings is invested in the De-risking Portfolio until age 61, when all your retirement savings will be invested in the De-risking Portfolio. This portfolio offers less exposure to the share markets than the Balanced Portfolio, which in turn will reduce the impact of recent market falls.

Members aged 62 to 63, are invested in this portfolio – which will see 80% of your retirement savings invested in the De-risking Portfolio with the residual 20% invested in cash.

Approximate returns earned by the average pension fund in South Africa

The chart shows that returns over one-year periods (short term) are much more unstable than returns over seven years (long term). The one-year returns are influenced by short-term market cycles, such as those caused by the Covid-19 pandemic. The returns over longer periods are smoother and less uncertain.