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Opinion · Benefits Desk view

Three months is a floor, not a target

The rule says members must get access to retirement counselling three months before retirement. Too many funds treat that as the plan.

Benefits Desk · ~4 min

Opinion. This is the view of Benefits Desk, not news reporting. Facts in it are sourced below. Education only — not advice.

The rule and the reality

The 2017 default regulations made boards set an annuity strategy and give members access to retirement benefits counselling “not less than three (3) months before their normal retirement age” (Reg 39(2)(e), GN 863). The rule was a real step forward. It is also a minimum.

The Sanlam Benchmark Survey 2026 suggests how far that minimum sits from what members actually need. In its qualitative research with 30 recent pensioners, people started engaging with their fund on average 3 years and 4 months before retirement and sought advice on average 1 year and 8 months before. The sample is small, and we say so. But even the cautious reading points the same way: members are making their minds up long before the legal floor arrives.

Why this is a governance question

By three months out, the big choices are usually made. A member who has already decided to take the maximum cash, or who has never heard of the trustee-endorsed annuity, isn't going to be talked round in a single session. The same Sanlam report says only 31% of standalone-fund members and 26% of umbrella sub-fund members take up trustee-endorsed annuities.

That is not a member failing. It is a timing failure, and timing is something boards control. The annuity strategy is the board's. The counselling is the board's. When it starts is the board's call too.

What we'd like to see

We think boards should report, at least once a year, when members first receive retirement counselling and what share take up the trustee-endorsed annuity. Those two numbers would tell a board more than any industry survey can.

We think the industry should stop quoting survey averages as if they described every fund. The 20-months figure is a useful alarm; it is not a benchmark a board can manage to. Its own fund data is.

None of this is a view on which annuity anyone should buy, or how much anyone should draw. That stays between a member and a licensed adviser. Our point is narrower: the rule sets a floor, and a floor is not a plan.

Staging pilot (v2 Portion 6, source-mix test). Not published to production. Needs editorial gate + fact-check pass before any live publish.