Johannesburg - South Africa's main trade union federation, Cosatu, will continue fighting retirement reform despite President Jacob Zuma's signing of new tax incentives into law, the federation said on Wednesday.
Trade unions, having scuppered earlier attempts to pass the amendments in Parliament, are among the most vocal opponents of government efforts to lock more workers into long-term retirement savings.
Cosatu, an alliance partner of the governing ANC, said Zuma's move will “complicate” its support in the local government elections due later this year.
“These savings are part of workers' hard-earned salaries and should be accessible to the workers, as and when they need them, especially in the absence of a comprehensive social security,” said Cosatu in a statement.
At stake is the flexibility to withdraw savings in one go upon retirement or when changing jobs.
The new rules will limit retirees to withdrawing upon retirement only a third of their contributions made from March 2016, while the rest would be locked into investments that would guarantee a monthly income.
Cosatu maintains that Zuma has signed the two tax law amendment acts to harmonise retirement savings. The president's office did not respond to requests for confirmation.
“Workers will fight any attempts to impose the compulsory preservation of our hard-earned deferred wages,” said Cosatu.
But a Treasury official told local radio that the unions' fears were unfounded and that the goal of the new rules was simply to make retirees financially more secure.
“We've designed the system so it will suit the interests of those who save,” Treasury's head of tax and the financial sector, Ismail Momoniat, said in an interview on Talk Radio 702.
REUTERS