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Johannesburg - In a rare show of mutual agreement, the private sector and trade unions have come out in support of the need for a stand-alone pensions ministry in South Africa to fast-track reform.
Speaking at a Sanlam employee benefits pension symposium, the head of policy analysis at Sanlam, Elias Masilela, said one of the reasons for the delay in pensions reform has been the jostling by government.
It would have been quicker and more seamless had there been a stand-alone unit. But his research from similar units around the world showed it will all boil down to how seriously government takes this. Should it reach presidential level, it would be an indication that the proposal is seen in a serious light.
The last set of documents from government on retirement reform came in 2007, when convergence papers were submitted.
Many pensioners forced to workCEO of Sanlam Structured Solutions Dawie de Villiers has called for mandatory retirement saving legislation to improve the dire retirement saving situation in the country.
Sanlam research has found that 60% of pensioners have insufficient savings levels, with 31% having to work to supplement their incomes. The findings also show that 80% of retirement funds do not provide post-retirement medical aid.
Cosatu's Western Cape leader Tony Ehrenreich told delegates that private virtues need to be turned into public values; the partnership between the private sector and public interest must be codified and supported by government at the highest levels.
"So to realise this we call for the establishment of a dedicated ministry of social security, one that defines a comprehensive retirement and social benefit policy," he said.
Masilela confirmed in an interview with I-Net Bridge that the proposal for members to opt out of the social security system beyond certain limits remains on the table as this will exist side by side with the national fund.
But he says the "trick" is how risk benefits are funded relative to savings. Sanlam has found that most members are not taking adequate account of the risk portions, such as insurance for illness or death.
- I-Net Bridge