There has long been an argument relating to integration, between best- of-breed products and pre-integrated systems, for which one size fits all. The lines are blurring and today you do not have to opt for best of breed or pre-integration — but the argument hasn’t died.
The 50-year-old Pension Funds Act is today a hodge-podge of amendments, guidance notes and interpretations, long in need of consolidation. Reform has been under way several years already and is unlikely to be resolved before 2010. The national treasury in 2006 released a discussion paper on retirement fund reform with wide-ranging proposals on all aspects of retirement savings.
Choosing the right accounting and payroll package need not be as daunting as many business owners and chief investment officers believe it to be. According to Ivan Epstein, CEO of Softline: ”It’s all about focusing on matching the product’s functionality with your actual requirements. Look beyond all the bells and whistles of vendors, and invest in a solution that truly fits your company.”
The functions of payroll administration and human resources (HR) departments are merging as the original barriers between the two fall away and payroll software undergoes radical development to cater for ever-changing legislative demands. Grant Lloyd, managing director of payroll software developer Softline Pastel Payroll, says there are five major payroll laws that govern payroll processing and these place immense pressure on payroll administration and HR departments.
Foreign interest in the South African short-term insurance market, especially the corporate sector, is very active. Chicago-based Aon Corporation bought a stake in local brokerage Lumleys more than a decade ago, the Willis Group took a stake in Mark Floyd and Associates, as did Marsh in CT Bowring.
Following a landmark decision by the Supreme Court, short-term insurers will be permitted to design and sell medical cover. Since 1998 this market has been all but barred from selling medical cover because of an interpretation of the definition of "business of a medical scheme" by the Council of Medical Schemes.
Insurance claims have been soaring over the past two years, while premiums have softened. That’s an unsustainable business model, but was facilitated by two factors: the equities bull market that meant that investment returns subsidised premium income and increased competition in the short-term insurance market.
The amount that people are paying to service their debt has risen to an all-time high of 80% of disposable income, according to figures recently released by the South African Reserve Bank. Ian Wason, MD of Bond Busters, attributes much of this to the lengthy introduction of the National Credit Act.
About 60% to 70% of the South African home finance market is now facilitated by originators, who have managed to secure interest rate concessions of 1% to 2,5% for their clients. They handle the shopping around for you, as well as the administration and insurance.