Johannesburg - The new pension laws are causing a major rift between the Congress of South African Trade Unions (Cosatu) and the ANC.
Cosatu said it would decide next month at its central executive committee meeting on what protest action to take in light of the imminent signing of the laws passed by President Jacob Zuma this week.
The new Taxation Laws Amendment Act means people who retire or resign will only be able to withdraw a third of their retirement savings and compel them to put the rest in an annuity.
Cosatu has accused the government of “sneaking” the act in behind its members’ backs.
National spokesman Sizwe Pamla said this had been discussed at Nedlac, where the union opposed it. Business supported it because “it doesn’t affect them, so we deadlocked. Treasury then withdrew and went behind our backs to Parliament”.
Cosatu supported the workers’ interests, not the ANC's, he said.
But on Thursday the Presidency responded saying Zuma did not act unilaterally when he signed the Tax Administration Amendment Act.
President Zuma’s office added that: “The law was considered at Nedlac. It was also discussed openly in Parliament. It was passed by both the National Assembly and the National Council of Provinces following public hearings.”
According to Cosatu, more than 85 000 civil servants resigned between July 2014 and June 2015 for fear that they would lose access to their retirement savings.
“This is nothing but a direct attack on the workers and provident funds,” said Pamla.
“There is no government or department that should be allowed to pass laws meant to dictate to citizens and workers how and when they should spend their hard-earned money.”
Zwelinzima Vavi tweeted: “There is nothing Cosatu can do about it; absolutely nothing in between its campaign to vote very ANC.”
Treasury said union members’ fears are unfounded; the aim was to make retirees financially more secure by extending tax deductions currently only enjoyed by pension fund members. This means higher take-home pay for workers with taxable income.
It also warned cashing in of pensions or provident funds would amount to unnecessary taxation and the forfeiting of growth on their savings.
The Star and ANA