HR Pulse

Should there be a compulsory government pension fund?

An Old Mutual Corporate report, which was released yesterday, surveyed 800 workers between 18 and 64 who didn't have a pension or provident fund in order to ascertain whether or not they are happy with what they've saved for their retirement. Government's recently proposed retirement reforms aim at promoting saving for retirement and in order to further this aim it was suggested that all those who did not belong to a retirement savings vehicle be forced to belong to a government-sponsored pension fund. The reactions to this proposal were mixed.

In a report on Fin24, Craig Aitchison, a general manager at Old Mutual Corporate was quoted as saying the following: "The survey revealed that 51% of respondents believed employees should not be allowed to opt out of such a fund, while 49% indicated they should be able to."

Of the 49% who stated that they should be able to opt-out of a government-sponsored pension scheme, 55% were motivated by the fact that they feel they should have the right to choose while 18% felt that they wouldn't be able to afford the limited monthly contributions.

"In comparison, only 8% cited a lack of trust in government. It is encouraging that this is not seen as a leading reason for why respondents should be allowed to opt out of the fund. This suggests that South Africans do see the benefits of being part of such a fund," said Aitchison.