Labour Wrap: Pension fund and cold war rows

Jan 21 2016 09:08
Terry Bell

Cape Town - A cold war cat was thrown among the trade union pigeons this week, nationally and internationally when it became known that Cosatu had agreed to host the 17th Congress of the World Federation of Trade Unions (WFTU). This now Athens-based organisation was allied with the former Soviet Union and is generally supported by communist party-linked unions.

However, Cosatu, along with the other South African trade union federations, is affiliated to the major global union body, the International Trade Union Confederation (ITUC). This organisation, in its former International Confederation of Free Trade Unions (ICFTU) incarnation, was seen as supportive of the West in the East-West divide.

The fact that the WFTU includes among its affiliates the state-sponsored unions in countries such as North Korea and Syria puts it beyond the pale so far as ITUC is concerned. As a result, a potentially major row is brewing.

However, this row is still at the level of letters and emails between union bodies. In the meantime, locally the argument about pension and provident fund reform continues, with the threat of “rolling mass action”.

Alone among the union federations - and with the perhaps unwanted support of its expelled metalworkers’ affiliate, Numsa -  Cosatu continues to oppose the recent tax laws amendment that mainly harmonised pension funds. The issue Cosatu raises is about provident funds, a form of worker saving virtually unknown anywhere else.

In my book, such funds are a hangover from colonial and apartheid days when wages were withheld until the end of a contract period to ensure that workers did not abscond. In this regard, Cosatu is correct in referring to provident fund monies as “deferred wages” that, until the amendment, could be paid out in a lump sum.

The new law allows a lump sum payment of one-third of the fund while the rest is invested to be paid as a monthly pension. However, since the majority of low paid workers earn less than R160 000 a year and have provident fund savings of less than R300 000, most will still be able to access their money as a lump sum since a monthly pension now requires a minimum investment of R247 500.

More controversy on the pensions front is also likely after United Democratic Movement leader Bantubonke Holomisa lodged a complaint with the public protector that Public Investment Corporation (PIC) monies may have been channelled to the ANC. 

The PIC manages an estimated R1.5trn on behalf of the Government Employees Pension Fund.

* Add your voice to the big labour debate.

- Follow Terry on twitter @telbelsa.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

labour  |  labour wrap



Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What toys are you buying this Christmas?

Previous results · Suggest a vote