Global Developments: Middle East Conflicts & Market Impact
Ongoing geopolitical tensions and conflicts in the Middle East continue to create uncertainty in global financial markets.
These events can influence oil prices, inflation, interest rates and investor sentiment worldwide.
For retirement funds, including ours, this may result in:
Increased market volatility;
Short-term fluctuations in investment returns; and Pressure on global economic growth.
While such events can impact fund performance in the short term, it is important to remember that retirement investing is a long-term journey. Markets have historically recovered, rewarding patient and disciplined investors.
02
The Two-Pot System: Understanding the Long-Term Impact
The introduction of the two-pot retirement system has provided members with access to a portion of their savings (withdrawing from your savings pot).
While this offers flexibility during times of need, it is important to carefully consider the long-term consequences.
The “Double Whammy” Effect:
Withdrawing funds during periods of market downturn can have an even greater impact, such as:
Locking in losses as you are withdrawing money from your savings pot when the market is at a low point and you then have to sell more units to realize the amount you wish to withdraw.
Missing out on recovery gains as you have less money in your retirement fund to make up for the losses due to the downturn of the market.
Members are encouraged to carefully consider whether to withdraw monies and to treat withdrawals as a last resort.
Review Your Annual Benefit Statement
Your annual benefit statement, as of 31 December 2025, and projection statement have been uploaded onto the AF Connect portal under each member’s own profile. This will assist a member in noting their savings by savings category and in total and in determining whether you are on track for retirement.
If you have not yet registered, please access the link below and follow the registration steps:
Here’s how it works:
Save our number to your contacts: +27 60 043 9601
Type Help, select Register and follow the menu prompts
The self-service options are available 24/7, 365 days a year
With Alexforbes WhatsApp you can: request your most recent tax certificate most recent benefit statement fund balance
track the status of a claim register on AF Connect or reset your password access to financial education
AF Connect includes the retirement planning projection tool which can assist with calculating your projected retirement savings.
WhatsApp functionality has also been launched by Alexforbes.
Save the number +27 60 043 9601 to communicate via WhatsApp.
Take note; to make use of the WhatsApp functionality, you have to be registered on AF Connect (Online).
Financial advice is available free of charge through Alexforbes, the Fund’s administrator.
You can access the AF Connect Portal at any time to view the portfolio(s) you are invested in and to download your investment statement.
Governance and Oversight of the Fund, including investment portfolio changes 04
The Principal Officer (the “PO”) monitors contributions in line with Section 13A of the Pension Funds Act, ensuring correct and timely payments.
Net contributions are invested after fees.
The PO’s assistant prepares monthly budgets and the Finance and Budget Sub-Committee meets quarterly to review expenses.
The Fund Trustees are committed to ensuring member contributions are invested timely into the market as well as tracking and monitoring investment growth.
The Trustees, via the Investment Sub-Committee, under the leadership of its Chairman Hannes Boshoff, actively review the Fund’s Investment Policy Statement, which comprises all the investment buckets.
Current changes which have been implemented and in progress of being implemented are as follows:
Changes to the Accumulation investment portfolio:
The 36One Equity portfolio has been replaced by the AF-36One investment policy.
The Coronation Bond portfolio has been replaced by the NinetyOne Bond portfolio.
On the advice of SIMEKA, our expert investment advisers, the Trustees decided on these changes due to potentially better long-term returns.
Changes to the Money Market portfolio:
On the advice of SIMEKA, our expert investment advisers, the Trustees decided on this change to mitigate Regulation 28 concerns, which we had. 1 2 3
The Fund is currently in the process of moving from the Coronation Strategic cash portfolio to the AF Banker portfolio. Our advisers, SIMEKA, have shown us that better returns are expected from the AF Banker portfolio.
Changes to the Shariah portfolios:
The Fund is currently in the process of moving investments from the 27Four Wealth Builder and Stable portfolios to the AF High and Medium growth portfolios.
The importance of beneficiary nominations for retirement funds
Retirement funds provide financial security after working years. If a retirement fund member dies, and a lump sum death benefit becomes payable, the Trustees of the Fund are responsible for distributing the death benefit in accordance with section 37C of the Pension Funds Act (section 37C). Where the deceased has elected to complete a beneficiary form and/or dependents have been identified, these death benefits do not form part of the deceased estate, and section 37C overrides any provision made in a will relating to them.
The primary aim of section 37C is to protect those who were financially dependent on the member.
This includes legal dependants e.g. minor children, spouses with maintenance orders; factual dependents e.g. someone supported without legal obligation; and future dependants e.g. unborn children and other persons the member would have become legally liable to support had the member not died. The Trustees of the Fund may not accept unverified claims at face value.
The importance of keeping your beneficiary nomination forms and providing written, clear nominations of beneficiaries:
While Trustees are not bound by beneficiary nominations, members should submit clear, written nominations of beneficiaries and keep them updated.
These nominations help guide the Trustees, who must conduct an investigation to identify all dependants and nominees and establish various determining factors before equitably allocating the death benefit.
Providing complete and transparent information assists Trustees in reducing delays within the 12-month distribution window dictated by section 37C. It also helps to avoid legal complications. In the absence of written nominations and if no dependants are identified, the benefit may be paid into the estate, potentially triggering adverse tax implications and higher estate duty and executor fees.
The death claims process: What dependants/beneficiaries need to do when a member passes away
Although death is a sensitive matter, it helps dependants immensely to have information about the death claims process before the retirement fund member passes away, as summarised below:
1
Notification:
Dependants, a financial adviser or the executor must notify the retirement fund of the member’s passing by submitting the relevant forms and documents.
2
Await the Trustees’ decision:
Trustees must conduct a thorough investigation to identify all dependants and nominees. This may involve contacting family members, dependants and other third parties, and can take up to 12-months from notification of the death.
3
Submit objections and complaints:
Any party who disagrees with the Trustees’ decision can submit a complaint to the Principal Officer of the Fund and, if unresolved, to the Pension Funds Adjudicator. Adjudicator’s decisions may be reviewed by the High Court.
4
Choose a payment option:
Beneficiaries may take the benefit as a cash lump sum, purchase an annuity, or a combination thereof. Trustees may also pay benefits into a nominated trust or beneficiary fund on behalf of a dependant or nominee, particularly for minors or vulnerable individuals.
Members are urged to review their beneficiary nomination forms regularly, whenever they experience a life event like a marriage, divorce, birth of a child and at least on an annual basis.
Beneficiary nomination forms may be obtained from the Employer through EY’s “MyHR” team.
The Ernst & Young Provident Fund – Quarterly Investment performance 06
The Ernst & Young Provident Fund is a defined contribution fund.
Members who do not select their own investment portfolios from the Member Investment Choice Options, are defaulted into a lifestage strategy in which they are invested aggressively during the younger years of their career and slightly de-risked as they approach retirement age.
The lifestage strategy comprises the Accumulation portfolio as well as the Preservation portfolio. Members’ fund credits are automatically switched when a member is 3 years from retirement at 2,5% per quarter until a member is 75% invested in the Accumulation and 25% invested in the Preservation portfolio when reaching retirement.
Members are also able to opt out of the lifestage strategy and select their own investment portfolios, as additional member choice portfolios are available to choose from.
Members may elect from the following portfolios should they decide to opt-out of the default lifestage strategy:
Accumulation portfolio (member choice);
Preservation portfolio (member choice);
Ultra-aggressive portfolio (return-Penhancing portfolio);
Money market portfolio;
Inflation-linked portfolio (The inflation-linked portfolio option caters for members who wish to purchase an inflation-linked guaranteed annuity (rather than a living annuity) at retirement);
Sharia High growth portfolio; and
Sharia Medium growth portfolio
Since the Fund is a defined contribution fund, it is the Trustees’ responsibility to ensure that there is an appropriate range of investment portfolios.
The Trustees are also required to assess the investment needs/risk profile of the majority of the members and then to tailor the investment as conservatively or aggressively as necessary in terms of the Fund’s overall profile.
The Trustees therefore aim to provide members with suitable investment portfolios with long-term returns that suit the majority of the members’ needs.
In a defined contribution fund, the performance of the invested assets directly determines the member’s eventual retirement benefit. Prudent financial management therefore, dictates that one regularly monitors these investments with the aim of assessing their continued appropriateness.
A key part of this process is monitoring the performance and determining whether actual investment performance measures up to expectations.
The Ernst & Young Provident Fund has an investment sub-committee. This committee monitors investment returns and, in conjunction with SIMEKA, advises the Board.
Historical performance
As of date: 28/02/2026
Time period: Since common inception 1/10 2019 to 28/02/2026 EY Accumulation Portfolio/ Aggressive AF Global LMW Median
3-year rolling returns
EY Accumulation Portfolio Fee Breakdown As of date: 28/02/2026
Investment objective
The EY Accumulation portfolio is aggressive and therefore displays high levels of volatility over the short term while aiming to provide market-related growth. EY Accumulation Portfolio/ Aggressive Portfolio is a combination of balanced portfolios and best-of-breed specialist managers in various asset classes to deliver an optimal risk-return payoff.
The Fund’s Accumulation portfolio has consistently outperformed the AF Global Large Manager Watchlist Medium over a 1, 3 and 5 year period since its inception.
Freedom starts with inclusion and intent 07
Human Rights Day and World Consumer Rights Day remind us that fair access to quality financial products, clear information and competent advice is part of building a more inclusive South Africa. For many households, the first step towards freedom is simply moving from informal savings or cash under the mattress into regulated products that can outpace inflation and protect purchasing power over time.
Financial freedom for future generations is not about perfection; it’s about getting started, avoiding a handful of costly mistakes and staying the course through market noise so that compounding can do its work.
Start early and stay consistent
“Time in the market” is the most powerful and under appreciated driver of long term outcomes. South African examples repeatedly show that an investor who starts saving in their mid 20s, with modest monthly contributions, can end up with several times the capital of someone who only begins a decade later, even if the late starter contributes more in rand terms.
The reason behind these vastly different results is compounding. When you earn returns on your returns, the growth curve bends upwards – exponentially – the longer you remain invested. Practical steps that help younger investors include starting a retirement annuity, a tax-free savings account or an employer fund contribution early; using cost effective unit trusts for discretionary investing; and reinvesting dividends rather than withdrawing and spending these funds.
Even if you feel you have ‘left it too late’, consistency still matters. By making disciplined contributions and taking on a sensible level of risk instead of holding funds in cash, you can materially improve your retirement readiness.
Most households will not be able to double their savings rate overnight, but small, sustained changes can meaningfully alter the trajectory of wealth over 20 or 30 years. Redirecting a few hundred rands a month from lifestyle expenses into investments can translate into hundreds of thousands of rands in additional capital over a typical working life.
On the portfolio side, incremental improvements like avoiding overly concentrated positions and gradually increasing growth exposure when appropriate also have a compounding effect over time. Avoid the temptation to chase whatever performed the best last year, and instead maintain a balanced, cycle aware approach to reduce the risk of buying high and selling low.
Marginal changes, major long term gains
Accepting volatility and focusing on the long term
Volatility is the price investors pay for the higher long term returns offered by growth assets such as equities. However, local and global data show that while one year equity returns can range from deep losses to very strong gains, the dispersion of outcomes narrows as investment horizons extend, with a much higher percentage of rolling five year periods delivering positive returns.
Trying to sidestep every bout of market turbulence often leads to sitting on cash after losses have already been realised and only re entering markets once prices have recovered, which undermines compounding. A more robust approach is to define an appropriate risk profile upfront, diversify across asset classes and geographies and commit to staying invested through cycles, making measured adjustments rather than emotional shifts.
Be aware of the following common behaviours that can undo years of disciplined saving:
Holding excessive cash for long periods, especially in a country where inflation has historically run at around 6% per year over the long term.
Reacting to headlines by switching in and out of funds, thereby locking in losses and missing strong rebound years that often follow periods of stress.
Concentrating wealth in a single share, sector or region and underestimating the risk of permanent capital loss if sentiment turns or fundamentals deteriorate.
Taking on expensive short term debt, where compounding works in reverse and erodes household balance sheets that could otherwise have supported investing.
Avoiding these pitfalls is as important as selecting the right underlying funds and this is where professional advice can add significant value over time.
Inflation is one of the most powerful forces working against long term savers, because it steadily erodes the real value of money. Analysis shows that long term inflation has averaged about 6% a year in South Africa. At that pace, prices double roughly every 12 years. Even in the recent environment of lower headline inflation, retirees who rely heavily on cash or low growth assets risk seeing their purchasing power fall materially over a 20 to 30 year retirement period.
For investors aiming to secure their own dignity in retirement and to pass on meaningful capital to the next generation, portfolios need a sensible allocation to growth assets that can beat inflation after fees and taxes over time. Structuring investments across suitable vehicles (such as retirement funds, tax free investments and discretionary solutions) can also improve after tax outcomes for families over multiple generations.
Financial freedom for generations is built decision by decision: start as early as you can, keep moving in the right direction even if you start later, respect volatility without fearing it, avoid value destroying mistakes and always plan in real terms after inflation.
Pitfalls that quietly destroy value
Never ignore inflation
Approximately 90% of South Africans who retire, cannot afford to do so.
Please make sure that you are saving adequately for your retirement.
Reminder
Complaints & Queries process
Complaints, queries and questions - Who to lodge your complaint with
To make things easier and more efficient for you as a fund member, we ask that you first lodge your complaint in writing to the Fund’s PO and then the Administrator of the EY Provident Fund.
Contact details
Fund Administration Contact Details: eyp@alexforbes.com or Chetan Gagjee: gagjeec@alexforbes.com
The Principal Officer’s contact details are:
Name: Mr Marius Otto
Tel: 083 601 2759
Email: Marius.Otto@za.ey.com
The Chairperson’s contact details are:
Name: Michael Bourne
Tel: 082 603 0772
Email: Michael.Bourne@za.ey.com
Alexforbes Contact Centre
Tel: 086 060 6162
Email: complaintsoffice@alexforbes.com
Pension Funds Adjudicator
Tel: 086 066 2837 or 012 748 4000
Email: enquiries@pfa.org.za www.pfa.org.za
FAIS Ombud
Tel: 012 470 9080
Email: info@faisombud.co.za www.faisombud.co.za
National Financial Ombud of South Africa (NFO)
Tel: 0860 800 900 www.nfosa.co.za
Information officer
Name: Mr Marius Otto
Tel: 083 601 2759
Email: Marius.Otto@za.ey.com
Information Regulator Email:
Email: complaints.IR@justice.gov.za www.justice.gov.za/inforeg
Lodge an official complaint in writing to the Fund. All complaints should be lodged here so that they can be investigated and dealt with promptly.
If your complaint is not resolved to your satisfaction, then you may direct your complaint to the Fund’s PO and /or the Fund’s Chairperson.
Lodge a complaint with the Pension Funds Adjudicator if your complaint about the Fund or the Trustees was not resolved to your satisfaction through the Contact Centre
Lodge a complaint with the FAIS Ombud, if your complaint about the quality or appropriateness of the financial advice you received from your financial adviser was inappropriate.
If you have a complaint about a financial service provider in the banking, short-term insurance, longterm insurance and credit sectors, you can contact the NFO for free assistance
Lodge a complaint in writing to the Fund’s information officer if you are dissatisfied with the manner in which your personal information has been processed or if your privacy rights have been compromised or breached.
Lodge a complaint with the Information Regulator if you remain dissatisfied with the Fund’s information officer’s response to your complaint
Your feedback is important to us and we take your complaints seriously!
