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Pension savings are safe - govt

May 19 2008 21:10

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Cape Town - Social Development Minister Zola Skweyiya on Monday assured South Africans that their pension fund contributions would not be negatively affected by the launch of government's proposed pension fund.

"I must stress that government has no intention of raiding any existing retirement funds or forcing members to put the savings accumulated thus far into the new National Social Security Pension Fund," he said in a statement.

This followed concerns raised by Cosatu that some people were resigning so they could draw their provident fund benefits before the new Social Security Pension Fund kicked in.

Fears that current contributors would lose their benefits were misplaced.

"On the contrary, we would like to ensure that all those who have previously contributed receive the full benefit of their contributions when they reach their retirement age.

"In fact, government will be subsidising the pension contributions of low income earners," Skweyiya said.

The proposed fund, currently being finalised, could see low-income earners being forced to contribute to the scheme.

"The Department is proposing that all those earning more than R1 000 per month must contribute to the new National Social Security Pension Fund, with government providing a contribution subsidy directly into contributors' accounts and not through a wage subsidy," Skweyiya said.

-Sapa

 
 
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