LABOUR federation Cosatu and the Public Servants Association are up in arms over National Treasury’s statement that members of the Government Employees Pension Fund (GEPF) will be excluded from new rules enabling pre-retirement withdrawals.
Cosatu said it was deeply concerned by the ‘outrageous’ decision because nobody on the government’s payroll has had a salary reduction or been forced to work shorter hours due to the COVID-19 pandemic.
Cosatu wants to meet with Finance Minister Enoch Godongwana and National Treasury to address its concerns and ensure all workers can access a portion of their pensions.
Among others, Cosatu says this is to ensure that a Bill is tabled at Parliament by the end of 2021 to allow all workers to access a portion their pensions.
If this is not expeditiously done, the current unsustainable rate of over indebtedness will push the workers and the economy over the edge, said Cosatu.
According to National Treasury, the GEPF is not regulated under the Pension Funds Act.
“While this outrageous statement is unacceptable, we are not shocked by such blatant provocation of public servants coming from the National Treasury,” Cosatu spokesperson Sizwe Pamla said.
“The Federation has consistently identified the National Treasury as the chief bastion of resistance in government against the progressive socioeconomic policies. These are the same people who have spent the better part of the last two decades pursuing wrong-headed and cartoonish ideas to try to fix the economy.”
He said the union federation rejected ‘this unwarranted isolation and victimisation of public servants.’
“This represents an intensification of the offensive against public servants by this administration,” said Pamla.
“Retirement savings are hard-earned deferred wages of workers, and the National Treasury is ill-qualified to tell workers that they cannot access them while experiencing financial difficulties. This arrogant statement is tantamount to the infantilization of workers. Workers do not need to be lectured by ineffectual government bureaucrats about their money.”
Pamla said COSATU in making this proposal to social partners at Nedlac, last year, was informed by the depressing levels of indebtedness faced by many workers and households in South Africa.
According to the Debt Counselling Association, about 10 million people in South Africa have bad debt, meaning they have missed three or more monthly repayments.
These people have an average of eight loans each.
On average people in bad debt spend 63% of their after-tax income on repayments.
According to the South African Reserve Bank, almost 73,7% of households’ income is spent on debt.
At the same time consumer spending contributes 60% to the economy.
Last year the SA Human Rights Commission revealed that more than 50% of South Africa’s credit-active consumers (19 million) were over-indebted.
“The outbreak of the COVID-19 virus has worsened an already bad situation and public servants have not been spared. The unilateral imposition of a three-year wage freeze that started with the non-implementation of Resolution 1 of 2018 has left many of them struggling to keep up with their debt repayment costs and the cost of living,” he said.
“About 62% of public servants do not have houses and it was the same National Treasury that disrupted the establishment of a Government Employees Housing Scheme by forcing it to be placed in the hands of the private sector.”
He added: “It is unacceptable that the same public servants that have been designated as essential service workers, and who have led from the front in the fight against COVID-19 are being singled out and forced to live lives of brute survival.”
“This senseless statement is being made after many workers have seen heavy price increases on electricity and fuel. This has a knock-on effect on the price of goods as transport costs rise, while the general price of living goes up relatively in response. The reason these National Treasury bureaucrats are so recklessly indifferent to the plight of workers and public servants in particular is because they pay no price for being wrong.”
The Public Servants Association, which also represents public servants who are members of the GEPF, noted that the pension savings of these employees are governed by separate rules in the form of the Government Employees Pension Fund Act.
“National Treasury must equally take note that public servants have also equally been affected by the devastating impact of Covid-19, like other employees in the country. Government and specifically the Treasury, is well aware that public servants are having to make ‘ends meet’, after not receiving their salary increases for 2020,” the PSA said in a statement.
The PSA said it was not impossible to amend the Government Employees Pension Fund Act to allow withdrawals.
“The PSA can no longer allow that pension monies of public servants only be available for high-ranking politicians and connected individuals, who access these monies through the Public Investment Corporation (PIC), while the owners of the monies are suffering without houses and drowning in debts,” the PSA said.
- Inside Politics
