Johannesburg - In a move hailed as a victory by organised labour, President Jacob Zuma has signed new retirement reforms into law, without the compulsory annuitisation sections that unions oppose.
And in another big win, the government has agreed to hold talks on the annuitisation at the National Economic, Development and Labour Council (Nedlac) for the next two years.
Read: Government in U-turn on retirement reforms
This is an about-turn for the state, which has tended to avoid Nedlac on controversial socio-economic policies, fearing opposition from labour or community representatives.
The National Treasury maintained for months that the Revenue Laws Amendment Act had gone through extensive consultations at Nedlac before going before Parliament last year.
This claim was proven to be untruthful by Independent Media, after minutes of Nedlac meetings showed the matter had been deferred and never properly discussed.
Cosatu even threatened to withdraw its support for the ANC at this year’s municipal elections, as frustration mounted over the state’s intransigence on retirement reforms.
Tens of thousands of workers resigned from their jobs and cashed out their retirement savings, fearing the government intended to “nationalise” their pensions.
For its part, the government said it was necessary to convert provident funds into retirement annuities to encourage greater retirement saving.
Annuitisation limits the amount of money that can be taken as a bulk payment on retirement to a third of a retiree’s total savings, with the rest drawn as a monthly payment.
In its statement announcing the signing of the amendments into law, the National Treasury said it was necessary to delay compulsory annuitisation “due to considerable confusion and misinformation”.
Cosatu, which has come under immense political pressure as a result of breakaways and loss of membership, sought to use the state’s capitulation as proof of its continued relevance.
“This victory proves what workers can achieve when united,” said Cosatu spokesman Sizwe Pamla.
As part of the package, the government will also be required to submit a report to Parliament every six months on the progress of the retirement reform negotiations at Nedlac.
The state has also agreed to release its long-awaited policy paper on a comprehensive social security plan for South Africa by the end of next month.
“The government is committed to further details and constructive engagement with labour unions and other stakeholders on the requirements to purchase an annuity for provident fund members, and will facilitate these discussions by publishing the paper on social security,” said the Treasury yesterday.
The government has for years delayed the publication of a comprehensive social security plan, but has come under increasing pressure with rising unemployment and social unrest in the country’s poorest communities.
While the passage of the reforms without the controversial annuitisation requirements will be seen as victory for labour, the renewed commitment to a Nedlac-led process might be the boon needed to save South Africa’s well-established but fraying system of social dialogue.
LABOUR BUREAU
THE STAR