Pensioners receive less and less every year because actuaries, when working out the liabilities of funds, do not take future inflation into account.
This is the view of Professor Pieter le Roux, of the University of the Western Cape and a member of the Smith Committee of Inquiry into retirement funding.
Le Roux told the conference of the Institute of Retirement Funds in Cape Town this week that because the methods used by actuaries surpluses built up in funds, which resulted in employers taking contribution holidays, while pensions fell behind the rate of inflation.