30 June 2008
South Africa’s workforce need not cash in their provident fund savings out of fear that the government will nationalise the funds, says Finance Minister Trevor Manuel.
Manuel’s statement comes after certain service providers warned their clients to cash in their savings, claiming that the government was threatening to seize them.
“Since the announcement of the reform of retirement funds in the national budget in February, service providers have told people that government is going to nationalise pensions and is going to take away your savings, so you will only get the statutory state old age pension when you retire,” Manuel told reporters in Pretoria last week.
“It would be reckless, impossible and unconstitutional that any one of us would agree with the confiscation of the savings of working people.”
Manuel said he had heard that workers were withdrawing their savings, and that some were going so far as to resign from their jobs in order to cash in their pensions.
He was accompanied by Social Development Minister Zola Skweyiya and several trade union leaders.
Savings levels ‘too low’
Skweyiya said he was concerned that these withdrawals would impact on the workers themselves and their families as they approach retirement, and that it would impact on the country, as savings levels are already too low.
“The government and trade unions share a commitment to improve the living standards of our people and we want to collaborate in working towards this objective,” he said.
“Part of this commitment is to ensure that all workers are able to live a better life when they retire than live in dire poverty in old age.”
Report ‘unscrupulous individuals’
Skweyiya called on all shop stewards and trustees of pension and provident funds to report these “unscrupulous individuals and service providers” to trade union offices, government and regulatory agencies.
He said that some government departments and the trade unions would embark on road shows to visit factory floors around the country, and ensure that shop stewards and workers were prevented by being misled.