By Thapelo Molefe
Finance Minister Enoch Godongwana has called for South Africa’s retirement system to adapt to changing employment patterns, technology and longer lifespans, warning that traditional pension arrangements may no longer be sufficient for many workers.
Godongwana was speaking at the International Organisation of Pension Supervisors (IOPS, Financial Sector Conduct Authority (FSCA) and World Bank International Conference 2026 in Cape Town, where he said retirement systems needed to become more flexible and follow workers as they moved between different forms of employment.
“Can [a] retirement savings model built predominantly around traditional formal employment remain sufficient in a labour market that increasingly includes more diverse forms of work? I don’t think it can,” Godongwana said.
He said more people were moving between formal employment, self-employment, temporary and part-time work, informal employment and platform-based work.
Workers with irregular incomes and frequent changes in employment could struggle to maintain the regular contributions required by traditional occupational retirement funds, he said.
“We need to think increasingly about retirement systems that follow the worker rather than simply the job,” he said.
Godongwana called for systems that would allow self-employed, informal and other non-standard workers to participate in retirement savings and continue contributing when they change jobs or types of work.
He said technology and artificial intelligence were also likely to reshape the jobs people perform, the skills they need and how work is organised.
He referred to the World Economic Forum’s 2025 estimates that technological, economic, demographic, geoeconomic and green-transition forces would significantly reshape the global labour market by 2030, creating some jobs while displacing others.
Godongwana said South Africa faced particular challenges because many workers remained outside retirement arrangements.
“A significant part of our working age population is unemployed, while others earn livelihoods through informal work, self-employment, and other forms of work where participation in an occupational retirement fund may be limited or non-existent,” he said.
He also highlighted the impact of longer lifespans, saying retirement systems needed to address the risk of people outliving their savings.
“The question that’s associated with that is how to ensure that people do not outlive their savings, because people now are becoming older and older,” he said.
Godongwana said accountability was also important to maintaining public confidence in retirement funds.
“For both industry, governments, and trustees, all of us who are in the ecosystem, we’ve got to develop accountability systems that can develop trust,” he said.
The minister also discussed the role of retirement savings in funding long-term investment and economic development.
He said pension funds held significant savings that could support investment, but governments should avoid forcing funds into decisions that could undermine retirement returns.
“The question is, how do you use those savings for long-term development in an economy without undermining the investment retirement returns for the pensioners? That’s a challenge we need to be seeing,” he said.
Godongwana said African countries also needed to consider how domestic savings could be better used to support investment across the continent.
He cited figures presented at a G20-related conference indicating that savings in Africa amounted to about $2.4 trillion, but said much of this was not being used for investment in African economies.
He said regional integration through initiatives such as the African Continental Free Trade Area could create opportunities to use these resources to support economic development.
Godongwana also reflected on the economic uncertainty caused by geopolitical tensions and its effect on governments, households and financial markets.
He said Russia’s invasion of Ukraine in 2022 had forced the government to provide fuel subsidies after energy prices increased. Similar pressure followed the conflict involving the United States, Israel and Iran earlier this year, he said.
According to Godongwana, the episodes had cost the government about R18 billion in fuel subsidies.
He said the broader economic environment had also been affected by renewed inflationary pressures, financial market volatility and higher food and energy prices.
Godongwana said retirement funds therefore needed to remain responsive to developments in the global economy while protecting the long-term interests of their members.
“My message is let’s make sure we can keep the retirement fund in touch with the global developments,” he said.
“Secondly, we’ve got to make sure that those retirement savings contribute to economic development in a manner which does not undermine future returns for the pensioners.”
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