The National Union of Metalworkers of South Africa (Numsa) presented its application to Nedlac embark on a strike against reforms affecting employees’ choice of provident fund and whether to take their benefits on retirement or use it for an annuity, agencies report.
The union said in a statement on Friday that it “is totally opposed” to the government’s decision to implement the reforms contained in Taxation Laws Amendment Act. The compulsory annuitisation on retirement is to come into effect on March 1.
“For thousands of workers the prospect of retirement and old age are bleak‚ especially against the background of increasing rates of poverty‚ rising indebtedness‚ inequality and unemployment‚” the union said in its Friday statement.
“Most workers leave employment with a pittance‚ so that at retirement they are left with a provident fund that is far too low to cover their needs‚ because workers’ wages are not only insufficient but also not increasing in real terms in line with inflation.
“Workers are invariably forced to make withdrawals from their provident funds in order to subsist through unemployment. This is especially so given the absence of viable alternatives through a universal social security net and a basic income grant.”
Numsa added that many people didn’t qualify for either a private or an “insufficient” state old age pension. Although the new rules limit annuity requirements to more than R247,500‚ fund accumulation “way in excess of multiples of that amount” were needed to give a monthly income on which people could live.
“Retired workers who have contributed to society with their tax payments will effectively be subsidising the role of government by not ‘becoming excessively reliant on the state for social assistance’‚” Numsa said. “This gives a windfall gain to finance capital‚ with reduced reserve requirements to meet the demands for lump sum withdrawals‚ enabling the generation of higher profits whilst passing on the risks to workers.”
Numsa has demanded that employees have the right to withdraw their full provident fund benefit upon retirement and a social security system that includes a state old age pension of at least R6 000; the implementation of the National Health Insurance scheme; a basic income grant of R1,000 per adult; an extension of the UIF to cover all registered unemployed people; and child benefit grant.
“Compulsory annuitisation laws will only serve to further entrench the poverty pit for the majority of workers both post- and pre-retirement‚” the union said.