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COSATU pamphlet on retirement funds
18 September 2014
COSATU message and caution on workers retirement funds
COSATU is extremely concerned that massive resignations and withdrawals from Retirement Funds by workers in the Public and Private sectors. This is mainly driven by a panic caused by false rumour mongering to the effect that government is going to “nationalise” workers provident / pension funds. This is a lie.
Nowhere has the government indicated that workers’ provident or pension funds are going to be nationalised! Your retirement funds are guaranteed under the law and government has no access to your retirement funds.
Private Sector and All Members Provident Funds
Every contribution (both member & employer) are a deferred wage of workers which no one CAN touch, except the rightful owner - the member.
Facts about government’s intentions
Government has passed a law called the Taxation Laws Amendment Act No.32 of 2013. Its main purpose is to encourage members of provident funds to get to preserve when leaving employment. This change will bring same tax treatment for provident and pension funds. This will benefit provident fund members as they get a tax benefit.
The discussion on Preservation of Retirement Funds is not law yet. The matter is at Nedlac Manco Task Team where Cosatu is represented. We have not changed our stance on no Preservation without a Comprehensive Social Security system. The matter has been raised with the Minister of Finance through a discussion at Nedlac.
Government Employees Pension Fund (GEPF)
Civil servants are not affected by these amendments. The current law governing Government Employee Pension Fund does not allow members to withdraw a lump sum of their pension funds.
On dismissal and resignation GEPF members will not be affected; they will continue to receive all their pension benefits. Civil service pension benefits are guaranteed in the GEPF law and the constitution. Government has no access to anybody’s retirement funds.
COSATU says to workers:
Don’t resign now while you have a job, and cause unnecessary suffering to your family. There is not and will never be nationalisation of workers’ pension funds in South Africa. Workers must not be misled.
1. COSATU rejects imposing a retirement annuity on workers provident funds benefits without an agreement on, and implementation of, a comprehensive social security and retirement reform policy.
2. We demand a moratorium on the implementation of the Taxation Laws Amendment Act No31 of 2013 on the preservation of provident funds and members’ benefits, to allow proper and genuine negotiations on comprehensive social security and retirement reform.
3. We further reject the use of foreign and local consultants to exploit such a delicate and sensitive national matter of workers’ only savings.
4. We call on all service providers not only to work with us in proving leadership and facts on this sensitive matter, but to expose those in their ranks who are exploiting this situation to stop with an immediate effect. We condemn the unscrupulous service providers who have created the panic whilst encouraging workers to withdraw their retirement’s funds and invest with them.
5. We also demand that the long outstanding Inter-Departmental Team (IDT) discussion paper on Comprehensive Social Security be tabled in NEDLAC for negotiations without any further delay. COSATU is engaging government, business and community constituencies in NEDLAC on this matter.