Pension money must not be seen as the government’s ATM – Solidarity  

25 July 2024

Solidarity warns that retirement money is not the government’s ATM, and under no circumstances should it be seen as a pot of money that could be taken from with ease. 

The Department of Trade, Industry and Competition, led by Minister Parks Tau, submitted proposals last week that include “tools and mechanisms” to promote industrialisation.

These proposals include amendments to regulation 28 of the Pension Funds Act to help finance industrialisation. Emphasis was further placed on black economic empowerment (BEE) with Minister Tau wanting to implement stricter compliance with BEE legislation and regulations.

According to Solidarity’s deputy general secretary for strategy, Marius Croucamp, workers’ pension money is seen as a soft target to fund projects.

“Even before the election, the ANC indicated in its manifesto that they wanted to use workers’ pension money to fund so-called industrialisation. The view that workers’ pension money can simply be tapped to fund the government must be stopped now,” Croucamp said.

To state the development of the economy as a reason is simply not good enough. Croucamp is furthermore of the opinion that retirement funds belong to hardworking people and those already on retirement and not to the ANC, the government or anyone else.

The government’s strong emphasis on BEE goes hand in hand with the focus on retirement funds. It is indeed Minister Tau who wants to strengthen BEE legislation and its application, and this would mean that contracts and projects will be awarded to empowerment companies at high cost and will be funded with workers’ retirement money.

“We are concerned that these contracts, as in the past, will be awarded to cadres and will not really empower anyone, apart from a closed group of rich cadres with ANC connections,” Croucamp said.

The drive to make the economy more inclusive must be seen against the background of the South African economy which is not really growing. Among other things, it is precisely ineffective policies such as BEE that contribute to the weak economic growth.

Solidarity will litigate against any plans to raid pension funds.

“We also encourage funds to amend their internal policies in such a way that surplus funds are distributed to existing members of the funds, because it is precisely these funds that are in the government’s sights,” Croucamp said.

Solidarity’s mandate is to ensure that workers’ retirement money is safe and that it is dealt with responsibly in the best interests of workers and fund members.

Issued by Marius Croucamp, Deputy General Secretary: Strategy, 25 July 2024