Cosatu vows to defend its funds
TRADE union federation Cosatu, which goes into its 12th national congress tomorrow, is at loggerheads with the government over the Treasury’s determination to implement a law that will limit workers’ access to their retirement savings.
The law concerned is the Taxation Laws Amendment Act of 2013, which will allow workers to only access a portion of their retirement savings and compel them to put the rest in an annuity.
Cosatu said it was going to discuss this and “resolve on a battleplan on how we are going to take the fight straight to the National Treasury and its supporters to defend our funds”. The Treasury anticipates that the bill will be promulgated this year for implementation next year.
According to Cosatu, more than 85 000 civil servants resigned between July 2014 and June 2015 due to fears that they would lose access to their retirement savings because of this legislation.
“This is nothing but a direct attack on the workers and provident funds… This arrogant act of provocation by the Treasury and the entire government will get an appropriate and equal response from the workers. Workers will fight any attempts to impose compulsory preservation of our hardearned deferred wages,” Cosatu spokesman Sizwe Pamla said last week.
He said the Treasury intended to go ahead with the implementation of the act regardless of workers’ rejection of this piece of legislation.
“There is no government or department that should be allowed to pass laws that are meant to dictate to citizens and workers, how and when they should spend their hard-earned money. They are doing this in the absence of a comprehensive social security and retirement reform discussion paper, which the government has failed to deliver for more than 10 years.”
Treasury spokeswoman Phumza Macanda said the government understood Cosatu’s concerns and had delayed the implementation of the new act by a year to try to deal with the concerns raised.
“However, the key concern appears to be process-related, which is that Cosatu does not want any retirement reforms until the social security reform paper is published.
“It is the view of Treasury that any further delay in implementation is not in the interest of members of retirement funds, some of whom are being denied a valuable tax deduction. Treasury also does not want to delay on initiatives to reduce charges in the retirement industry,” she said.
Cosatu demands that the Ministry of Finance postpone the implementation of the law until the comprehensive social security and retirement reform discussion paper is tabled at the government, labour and business negotiating chamber, or Nedlac, for discussion and an agreement is reached.
It said the government, led by the Department for Social Development, should release the outstanding interdepartmental task team discussion paper and table it at Nedlac for engagement without further delay. “The Department for Social Development cannot keep quiet and be neutral… while this is their responsibility and competency,” Pamla said.
Macanda said the Treasury would continue to engage with Cosatu and the public even after the implementation date to ensure that the reforms were properly understood, and to deal with any problems as and when they might arise.