Solidarity: Our mandate is to protect pension money

31 January 2020

Solidarity will consider legal action to protect workers’ pensions, and it will strongly oppose any attempt to finance struggling state enterprises through workers’ pension funds. Pension money represents the red line and Solidarity will not sit back and watch how people’s pensions are being looted.

This comes after COSATU proposed a series of economic interventions in a proposed debt rescue plan submitted to Eskom that includes increased taxes and the abuse of private and well as state pensions in the form of prescribed assets to pay off the struggling power giant’s debt of R450 billion. 

“Solidarity finds it inconceivable that COSATU would propose that any pension monies be used to settle Eskom’s debt. This is the epitome of the ruling alliance’s intentions to put your money where their mouth is. Solidarity will leave no stone unturned – pension funds should not be used to fund government’s failed ideology,” said Connie Mulder, head of Solidarity’s Research Institute.

Under the Pension Funds Act and the Financial Sector Conduct Authority (FSCA) the trustees of pension funds must take all reasonable steps to ensure that members’ interests are protected at all times. It is therefore the trustees’ role and responsibility to manage the retirement fund and to ensure that all decisions are made in accordance with the legal rules that apply to retirement funds. Trustees must act in the best interests of the fund’s members to ensure that they get the best return on their investments.

“Pension monies do not merely represent figures on a balance sheet – every pension fund is a lifetime’s contributions by a worker. It is absurdly reckless to want to use this money to stop the gaps caused by the government’s corruption and mismanagement. Pension fund trustees have a fiduciary duty to the workers and not to the government. Solidarity calls on the trustees to make decisions that will be in the interest of the workers, and that they therefore will reject this proposal,” Mulder argued.

“Under the ANC and its alliance partners, South Africa has followed the archaic ideology of centralisation and nationalisation – and has reaped its predictable consequences in the form of load shedding and corruption. To insist that this failed ideology should be further funded by ordinary citizens' pension money is akin to thinking a good quality sling shot is going to bring down an aeroplane. The solution rather lies in private alternatives for power generation. Cosatu is welcome to invest its members’ pensions in Eskom without their approval. Solidarity’s members and their pensions come first – we will do everything in our power to ensure that our members’ pension money is kept safely out of reach of the state’s clutches,” Mulder concluded.

Issued by Connie Mulder, Head: Solidarity Research Institute, 31 January 2020