THE postponement of the implementation of the annuitisation of part of provident fund savings on retirement was welcomed by Finance Minister Pravin Gordhan in the National Assembly on Tuesday on the grounds that a consensual approach to what was a long-term issue was preferable to an adversarial one.
The National Assembly adopted the Revenue Laws Amendment Bill in the presence of a gallery packed with about 200 members of the Congress of South African Trade Unions (Cosatu) which welcomed the postponement "as a huge and major victory" for workers. The Democratic Alliance (DA) opposed it.
The bill postpones the implementation of the compulsory annuitisation of two thirds of provident fund savings until March 2018 to allow government to consult with labour over the design of a system of preservation.
The measure was due to take effect on March 1 but was withdrawn by government after strong protests and threats of strike action by the Cosatu which accused government and Parliament of a lack of consultation. Mr Gordhan and representatives of all political parties rejected this claim pointing to the long and extensive negotiations that had taken place.
Government’s hopes of reaching agreement on preservation in consultations over the next two years were however dealt a heavy blow even before they have started. Cosatu said in a statement that it remained steadfast in its opposition to compulsory annuitisation.
"We warn government not to try and force workers to annuitise their retirement savings without their consent. Any attempt to force workers will result in resistance and mass mobilisation by workers. Their private deferred wages belong to them and them alone and no government has a right to tell workers what to do with their deferred wages."
DA finance spokesman David Maynier accused Cosatu of blatantly lying about the lack of government and said government had caved in to its demands. "When Cosatu says jump, the African National Congress government says how high?" Mr Maynier said.
The minister called on workers to participate in the consultations over the next two years so their concrete needs could be incorporated into the new proposal. In these discussions Treasury would stick to key principles namely the importance of saving; the need to harmonise pension and provident funds; the need to accommodate the needs of workers; and the need to prevent arbitrage abuse by high income earners of the provident fund regime.
Treasury, he added will launch a communication campaign to highlight the importance of savings and how this could be balanced with pressing expenditure needs.
Picture: THINKSTOCK
THE postponement of the implementation of the annuitisation of part of provident fund savings on retirement was welcomed by Finance Minister Pravin Gordhan in the National Assembly on Tuesday on the grounds that a consensual approach to what was a long-term issue was preferable to an adversarial one.
The National Assembly adopted the Revenue Laws Amendment Bill in the presence of a gallery packed with about 200 members of the Congress of South African Trade Unions (Cosatu) which welcomed the postponement "as a huge and major victory" for workers. The Democratic Alliance (DA) opposed it.
The bill postpones the implementation of the compulsory annuitisation of two thirds of provident fund savings until March 2018 to allow government to consult with labour over the design of a system of preservation.
The measure was due to take effect on March 1 but was withdrawn by government after strong protests and threats of strike action by the Cosatu which accused government and Parliament of a lack of consultation. Mr Gordhan and representatives of all political parties rejected this claim pointing to the long and extensive negotiations that had taken place.
Government’s hopes of reaching agreement on preservation in consultations over the next two years were however dealt a heavy blow even before they have started. Cosatu said in a statement that it remained steadfast in its opposition to compulsory annuitisation.
"We warn government not to try and force workers to annuitise their retirement savings without their consent. Any attempt to force workers will result in resistance and mass mobilisation by workers. Their private deferred wages belong to them and them alone and no government has a right to tell workers what to do with their deferred wages."
DA finance spokesman David Maynier accused Cosatu of blatantly lying about the lack of government and said government had caved in to its demands. "When Cosatu says jump, the African National Congress government says how high?" Mr Maynier said.
The minister called on workers to participate in the consultations over the next two years so their concrete needs could be incorporated into the new proposal. In these discussions Treasury would stick to key principles namely the importance of saving; the need to harmonise pension and provident funds; the need to accommodate the needs of workers; and the need to prevent arbitrage abuse by high income earners of the provident fund regime.
Treasury, he added will launch a communication campaign to highlight the importance of savings and how this could be balanced with pressing expenditure needs.
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