Cosatu Supports Government's Mandatory Pension and Insurance System with Conditions

• The Department of Social Development's proposal for a compulsory pension and insurance system has support from Cosatu
• The trade union says that while it is happy about the proposal and what it can achieve for South Africans, it still has some reservations
• The department published a Green Paper with the proposal for South Africans to be mandated to put 12% of their earnings into a national social security fund run by the government

JOHANNESBURG - On Thursday, Social Development Minister Lindiwe Zulu published a Green Paper that proposes a new system that will make pensions and insurance accessible for South Africans.

The system will require South Africans to give up 12% of their salary, which will be put into a government-run national social security fund, according to BusinessLIVE. The new system aims to close the gap in access to pensions and insurance that currently exists in South Africa.

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According to the department, the gap exists merely because South Africa does not have legislative provisions to help those who cannot afford pension funds and insurance.

One of South Africa's biggest trade unions, Cosatu says the organisation supports the concept of a mandatory pension and insurance system. However, the workers' union says that it has some reservations about a few of the provisions stipulated in the Green Paper, according to a report by EWN.

While other civil society organisations have stated that they have their reservations about the proposal, Cosatu's Sizwe Pamla says the union South Africans need a thorough social security system.

The union says they will still take a closer look at the proposal to weed out provisions that may not necessarily improve the lives of South Africans. The proposal is currently in the public commentary phase and the public is invited to bring their recommendations and reservations to the department.

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Cosatu welcomes Finance Minister Tito Mboweni's pension fund access proposal

Briefly News previously reported that the Congress of South African Trade Unions (Cosatu) says it welcomes Minister of Finance Tito Mboweni's announcement to allow workers to have access to their retirement funds.

The announcement was made on Wednesday, and Mboweni says the National Treasury has made a proposal for South African workers struggling to pay off their debt to withdraw a portion of their pension to meet obligations, according to Fin24.

Cosatu says allowing workers access to their pension funds could be particularly beneficially to people who have had financial struggles due to the coronavirus pandemic, according to a report by eNCA.

Currently, individuals can only access their pension funds upon retirement, resignation or when they have been retrenched. With the new proposal by Treasury along with trade unions and businesses, people may be able to make limited withdrawals from their pension funds.

Source: Briefly News