Johannesburg - Calls for a moratorium on changes to retirement savings are growing, with NGOs now demanding action from the government.
Labour made the demands in August already. Both it and the NGOs, who are represented by the community constituency in the National Economic, Development and Labour Council (Nedlac), do not want the government’s proposals to be implemented in March next year.
Tens of thousands of workers have been resigning from their jobs to cash in their pensions. They believe the proposals being punted by Treasury will result in the government “nationalising” their money because they will not have easy access to their future savings after March.
While the Congress of SA Trade Unions (Cosatu), which has been leading the calls for a moratorium, is unhappy with some of the proposals, it also believes that workers have not been briefed properly by the government on what the changes entail. This, and labour brokers, instilling fear amongst employees about their pensions, has led to the mass resignations. A total of 20 000 teachers in basic education alone have quit their jobs to access their pensions.
The community constituency is calling for the moratorium because it believes that comprehensive social security for all should be in place before changes are made to the retirement system.
“The reason the community constituency is demanding a moratorium on changes to the retirement fund provision even though it is going through the back door through the taxation law amendment act, is until we have agreement about comprehensive social protection, you can’t do these things in a piecemeal fashion,” community representative Isobel Frye told Independent Newspapers this week.
“If the working poor are not able to access something like a basic income grant, to tell them they can’t access… their funds which have to be preserved until retirement age is a travesty.”
Frye, who is the director of the Studies in Poverty and Inequality Institute, also said the entire retirement system needed to be looked at comprehensively, including who should administer funds. A suggestion is that the government, or the government and selected members of the private partner up to keep an eye on excessive administration fees.
Although labour is not as emphatic about a comprehensive social security system being in place first, it does agree with its Nedlac partner that workers cannot be denied access to their pension funds.
“The problem of debt amongst workers in this country is that people need access to their money. It should be possible for someone to draw a portion (of their retirement savings) once or twice a year. People resign because they need their money,” Cosatu president S’dumo Dlamini told Independent Newspapers last week.
Cosatu has warned the government that if it does not agree to the moratorium, there will be mass strikes throughout the country.
Frye said the community constituency would support labour if it decided to down tools.
“Yes we would as a statement of solidarity and also as a way to call on the state to abide by the correct processes,” she said.
Nedlac’s partners, which also include the government and business, have been at loggerheads over the retirement reforms for ages.
A Nedlac task team on the changes was formed eight years ago already, and has met a handful of times.
This is one of the main reasons why the labour and community constituencies are aggrieved because they believe they have hardly been consulted on the reforms. Instead the government has bulldozed ahead arguing that mandatory pension preservation is the best way to get employees to save for their retirement.
The Nedlac partners met Finance Minister Nhlanhla Nene last month over the moratorium. Another meeting is expected on the same matter later this month.
The Star