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Unions say NO to compulsory annuitisation of pensions

The union feels that the new act would leave workers with no choice and that the entire act must be repealed because the disputed provisions in the Act would have had a devastating impact on workers and take away their right to use choose how to use their own money held in provident funds. The union supports NUMSA’s challenge to the constitutional validity of these provisions because government failed to comply with the requirements of Section 77 of the Constitution, and to engage in a meaningful public participation process. In particular it blatantly lied when it said that the new law had been agreed upon in Nedlac, when in fact no such agreement had been reached. Incredibly Minister in the Presidency, Jeff Radebe, has admitted that when President Jacob Zuma signed the Taxation Laws Amendment Act late last year he wasn’t aware of Cosatu’s objections with regard to the proposed annuitisation of provident fund benefits.

“The concerns were only brought to the President’s attention after he had signed the bill,” he said. Thousands of workers view the prospect of retirement and old age with trepidation, given the number those who have spent their working lives in low-paid jobs, and rising indebtedness, which means they are left with a pittance when they retire. That is why so many workers are forced to withdraw all the cash from their provident funds in order to survive, and often even that leaves them with far too little to live on.

How much worse will this be is they can only access one-third of that amount? This is made worse by government’s failure to provide other sources of income through a universal social security net and a basic income grant. The current state old age pension, if you are poor enough to qualify for it, is absolutely insufficient, especially when many workers have to support members of extended families members. It is particularly irresponsible to bring in such a law before introducing the long-promised comprehensive social security system to ensure that no South African lives in poverty. An outrageous feature of the new law is that the payment of annualised pensions to workers will give government an excuse not to pay the state old-age pension, because they are not poor enough. Retired workers, who have paid taxes throughout their working life will effectively be subsidising government by not be earning little enough to become a “burden” on the state.

With lump-sum withdrawals reduced, more cash would have remained in the funds for them to invest in profitable enterprises, whilst passing on the risks to workers if these investments lose money. These sharks are reported to be unhappy with the proposed postponement because they have invested in new IT systems and will lose a lot of money, which, don’t forget, is not their money but the workers’. The Nine Plus unions also strongly oppose the proposed new law to make strike ballots compulsory. Once again government has lied in suggesting that this law was agreed through Nedlac. The record shows that no such agreement was ever reached. Nine unions will fight against this move to allow government to force unions to amend their constitutions and dictate how they must consult their members. Many unions already conduct secret ballots; others favour workplace mass meetings where workers can participate more actively.

But in every case it is the workers themselves who have resolved how such decisions should be taken, through a democratic, inclusive process, in line with their union’s constitution. Such a law could be used to force striking workers back to work if they broke the government’s imposed rules, even though complied with their own union’s constitution and rules. No union wants strikes, which they always strive to avoid by settling disputes through negotiation. Workers only vote to strike as a last resort, when employers’ intransigence leaves them with no alternative. But bosses will be even more intransigent if they know they can go to court to get strikes declared illegal because the unions did not ballot according to government rules. The law would also be a blatant contravention of Clause 23 of the SA Constitution’s Bill of Rights, which protects the right to strike. It would also violate ILO Conventions 87 and 98 on Freedom of Association and the Right to Organise, which the SA government has signed. This law will lead to government control of unions and the introduction of forced labour and slavery. We shall fight in the courts, the workplaces and the streets to force government to back down on this plan.

Issued by The Nine Plus unions