SOUTH AFRICA - Congress of South African Trade Unions (Cosatu) president, Willie Madisha, will today lead a delegation addressing the finance portfolio committee in parliament on legislation dealing with pension surplus.
The union’s main focus will be the “raiding” of retirement funds by employers.
Cosatu said the struggle by employers to acquire these assets is an issue affecting hundreds of thousands of current and former workers. “At stake is over R80bn ($9.4bn) which the rightful beneficiaries have been denied access to over many years,” it said.
“The so-called ‘surpluses’ are not actually surpluses at all but are assets which defined benefit funds set aside to meet members’ reasonable benefit expectations, but were not given to members as they should have been.”
Cosatu has put forward seven core principles which it hopes will inform the way in which the Pension Funds Second Amendment Bill resolves the issue. These principles are as follows:
1. A pension fund belongs to its members and no third party should have a legal or equitable stake in the fund. 2. Every pensioner is entitled to inflation related benefits. 3. Every member is entitled to a proportional share of what he or she would have been entitled to as a pensioner in the fund. 4. Any ordinary surplus remaining after satisfying the entitlements of pensioners and early leavers should be apportioned to pensioners and early leavers in equal shares. 5. The same principles that will apply to future benefits should apply to the past and should benefit all former members and pensioners since 1980. 6. Any deficit must be made good by the employer over time. 7. Dispute resolution regarding future minimum benefits and restitution of minimum benefits to past members should be dealt with on the basis of the same principles.
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