Pension funds won’t be nationalised, says Jeff Radebe

2014-08-21 13:45

The government has given assurances that proposed pension reforms will not see the state take over pension funds or prevent workers making withdrawals when they change jobs.

“There is no intention on the side of government to nationalise these things. I want to state emphatically, no, no, no,” Minister in the Presidency Jeff Radebe said today, following Cabinet’s regular Wednesday fortnightly meeting.

He conceded: “From the government’s side I don’t think we communicated this thing appropriately.”

Following a warning by the Congress of South African Trade Unions (Cosatu) last week, Radebe said Cabinet had noted that misguided fears about the reforms had prompted some people to resign from their jobs and withdraw their retirement funds.

“There is anecdotal evidence that some workers are resigning from work on fears that the government will from next year prevent them from withdrawing their retirement savings when they change jobs, and that the government wants to take over retirement funds,” he said.

“While the government wants to encourage workers to preserve their savings until retirement, no laws have changed to stop withdrawal when workers change jobs.”

Last month, Finance Minister Nhlanhla Nene said that the government believed it was too easy for workers to withdraw cash from their retirement savings when they changed jobs.

The treasury’s planned preservation reforms – which include higher taxation on early cash withdrawals – were aimed at encouraging workers to leave sufficient money in their pension funds to provide for eventual retirement.

He pointed out, however, that the reforms would not be retrospective and would not prevent cash withdrawals.

Cosatu last week called for a moratorium on the changes until workers had more clarity on the implications.

Cosatu president Sidumo Dlamini said the federation’s leaders would meet Nene next week to ask that an element of voluntary participation be worked into the reforms.

Dlamini warned that union members did not understand the changes that the government wanted to make and were withdrawing their pension funds for fear that these would be nationalised.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.