Employee benefits in the new South Africa

The design of benefit and compensation arrangements in South Africa reflects a certain degree of imbalance. Higher income employees, composed mainly of whites, enjoy 'flexible benefit' type packages while those with lower incomes hardly have enought to support their often extended families. It is hoped that from 1995 onwards, the establishment of security and compulsory benefit programs will benefit the lower-income groups and at the same time increase the cost of providing programs for higher-income employees as favorable tax treatment is lost and investment returns reduced due to the need to make 'socially productive investments.'