Don’t panic over pensions, teachers toldComment on this story
Durban - More than 20 000 teachers - a little more than 5 percent of South Africa’s 400 000 teachers - were considering taking early retirement packages, partly because of concerns over the government’s pension reforms, the country’s second largest teacher union warned in Durban on Thursday.
The National Professional Teachers’ Organisation of SA (Naptosa) said many teachers were acting on rumours that they might lose some of their retirement funds once the reforms come into effect.
The organisation’s president, Basil Manuel, blamed financial brokers for creating an “unnecessary panic” by urging government employees to cash out early, saying they were spreading misinformation.
“We need every good teacher we have in our midst. We never want to have a situation like 1993, where all our teachers took a package they were offered and bailed from the system,” he said at the union’s provincial congress on Thursday.
The event was attended by about 300 of Naptosa’s 8 000 KwaZulu-Natal members.
It has 60 000 members countrywide.
With the increasing shortfall of teachers entering the profession, the deficit - in both staff and experience - might never be made up, Manuel warned.
According to the National Treasury, the proposed pension changes, if signed into law, would assist teachers and other government employees - not disadvantage them as feared.
“We analysed the annuities market and proposed reforms to ensure that retirement fund members received good value for money when converting their retirement savings into an income in retirement,” it said.
The Government Employees Pension Fund, with more than 1.2 million active members, also attempted to allay fears last month.
“We have noted public concerns that are fuelled by rumours that the government will take away people’s hard-earned pensions and prevent them from accessing their funds.
“These rumours are based on a misunderstanding of government’s proposals,” it said, explaining that the proposals were in fact aimed at lowering the charges on the pension funds of workers, “to ensure that they maximise their pensions”.
And Basic Education Minister Angie Motshekga assured teachers last week, saying: “Your money is safe and there’s no need to panic.”
She said the proposed pension fund reforms were just proposals and the National Treasury would embark on a consultation process with all stakeholders.
“I would urge those wanting to take this drastic step (resignation), to carefully reconsider.”
Manuel said the union and fraternity had a valid reason to be concerned.
Manuel said: “All I can say is that they will regret it (resignation). The proceeds of these policies were not designed to be cashed in when the person is 50 years old. What if you live to 90? Do you have enough to keep you going for 40 years?”
He said that the number of resignations could easily grow to 10 percent, if those who were concerned about their pensions and those who simply felt ready to retire for other reasons, made the move to do so.
“We could never sustain that and this, of course, would impact upon the already tough conditions faced by children and teachers in the classroom.”
The chief executive of the Financial Intermediaries Association of South Africa, Justus van Pletzen, said last night that if financial brokers were telling teachers to cash in their pension and provident funds early, that was “harsh” and “bad advice”.
“If people have been given the impression to retire early, that is very dangerous.
“In fact, the longer you wait, the more financially secure you will be.”
He said that the organisation did not support such “irresponsible” sentiments which “encouraged people to panic” about losing their hard-earned money.