President Jacob Zuma attends the 15th Annual KwaNxamalala Traditional Indlamu held at Nkandla in KwaZulu Natal on January 1. Picture: MANDISA JIYANE
President Jacob Zuma attends celebrations at Nkandla in KwaZulu Natal on January 1. Zuma has angered Cosatu by quietly signing into law amendments to pension management legislation. Picture: MANDISA JIYANE

CONTROVERSY has exploded around amendments to pension management legislation quietly signed into law by President Jacob Zuma late last year.

On learning of Zuma’s decision, the apparently domesticated Congress of South African Trade Unions (Cosatu) sprang back unexpectedly to life. On Wednesday, it condemned the changes in surprisingly strong terms. Spokesman Sizwe Pamla described Cosatu as "deeply incensed and disappointed" by this "blatant act of provocation".

The central point of contention is that, from March 1, there will be some limits on how much of their provident fund savings workers can cash in when they retire.

Three factors lie behind the seemingly disproportionate reaction. First, Cosatu’s mostly public sector members want to control their own assets. Second, the federation’s leaders have decided to use this issue to mobilise workers against the conservative Zuma faction now that the African National Congress’ (ANC’s) leadership succession struggle has begun to heat up. Despite concerns that mine workers veteran Cyril Ramaphosa has become a "business fat-cat", the South African Communist Party and its associated unions have decided that Nkosazana Dlamini-Zuma or a third term for Zuma are simply unthinkable options.

Third, and most important, unions genuinely fear that the approved amendments are merely a first step. They may lead to what Cosatu described as a "slippery slope" towards the general misappropriation of workers’ savings. To understand this concern, we need to recall how fast the ANC’s view of the country’s R4-trillion retirement fund industry mutated across 2015.

In May, Enoch Godongwana, who chairs the ANC’s economic transformation committee, touted the "mobilisation" of pension funds to "address Eskom’s cash-flow situation ... in return for equity". While Godongwana avowedly favoured private sector participation in electricity generation, this Treasury-driven proposal predictably hit the rocks. Eskom equity, or the purchase of generating units, could in principle be attractive to big private pension funds, but not while the government, and so the ANC, retained a controlling stake in the parastatal. Meanwhile, liberation movement leftists — including the unions — refused to countenance privatisation.

Focus shifted to the Public Investment Corporation (PIC), which administers public sector employees’ pension funds. Starting in June, ANC Gauteng chairman Paul Mashatile began public consultations about pension fund "shareholder activism". He argued that workers should "move SA towards a more just and equitable future" by investing in parastatals and infrastructure.

Transformation driven by workers’ money, he observed, "might be perceived by some as inconsistent with trustees’ fiduciary responsibility". However, "trustees are obliged to concern themselves with the long-term sustainability of their investments". This was a reminder that ordinary people will thrive or perish together. (The rich, obviously, can make other plans.) If Eskom collapses, infrastructure is not renewed and the "transformation project" fails, then SA’s pension funds — given capital controls — will all be decimated. No doubt, this is the position former PIC head Brian Molefe — now Eskom CEO — has been hired to advocate.

The ANC’s failure to allay union suspicion marks a watershed. Many of the worst decisions taken by the ANC in recent years have been facilitated by alliances of convenience between gullible socialists and cynical patronage politicians. The idea of "developmental investments" to promote "transformation" sounds wonderful in principle to both camps.

It might have secured the support of most of the ANC’s self-conceived leftists in the past, but that time would seem to be gone.

• Butler teaches politics at the University of Cape Town