26 September 2007
South Africa has launched a public-private partnership that will provide retirement packages for around one million domestic workers across the country.
The Domestic Workers Plan, a partnership between the Presidential Working Group on Women (PWGW) and financial services group Old Mutual, is aimed at helping a larger portion of the country’s workforce to save for old age.
“Domestic workers form an important part of our society, but very few enjoy the financial benefits that are common to formal jobs,” Old Mutual retail mass-market solutions executive Andrew Cartwright said at the launch in Johannesburg this week.
“While some financial services companies offer general products geared towards lower-income workers, this product brings a comprehensive package geared to the specific needs of domestic workers.”
The Domestic Workers Plan will provide workers with membership of a retirement fund with investments managed by Old Mutual, funeral cover for the family and additional family support services including health advice, funeral support, legal support, emergency medical response and trauma, assault and HIV support.
The packages are available for a monthly contribution of between R85 and R200, depending on the level of savings chosen. A fee of R7 is deducted from each contribution to cover distribution costs of the product, while a total fee of 1.65% per annum, calculated and deducted monthly, is charged for the management of the investment.
According to the Widows Forum of SA, a member of the PWGW, 60% of women over 55 years are left destitute after the death of their husbands, while 87% of widowed or divorced women over the age of 60, depend on their children for their welfare.
“We need to provide greater access to savings and cover for vulnerable groups such as women in rural areas, farm workers, single parents and domestic workers,” said PWGW chairperson Gloria Serobe.
“Greater economic independence in their current working situations and in their retirement years is key to true empowerment.”
Greater economic role for women
Serobe expressed concern that despite making up at least half of the members of retirement funds, and representing 33% of the assets of those funds, only 7% of the trustees of retirement funds were women.
By contrast, women will largely manage the financial solutions and investments within the Domestic Workers plan.
“We want to influence the economy,” Serobe said, “by harnessing the collective influence of current retirement savings of women to create a greater role for them.”
While currently focussing on creating products domestics other vulnerable workers, the fund will in future also target women employed in the formal sector, those involved with small and medium enterprises, as well as artists and seasonal workers.
Serobe added that the PWGW would continue to work with Old Mutual and other key players in the financial services sector to develop additional products and services for women.
This includes a programme called Investing for Women that will leverage shareholder activism to encourage companies, in which retirement funds invest to adopt business practices that benefit women.
“Such initiatives should play a part in addressing the huge economic imbalances that exist in South Africa, and help empower women to take charge of their finances and plan for a better future,” she said.
SAinfo reporter and BuaNews