The Congress of South African Trade Unions (COSATU) has noted the overwhelming support that its decision to submit an urgent request to the Minister of Finance, Tito Mboweni to allow workers to access some of their pension money has received from workers. The leadership of COSATU wrote to the Minister requesting him to issue an emergency Directive through Emergency draft regulations  to allow workers who were not paid 100%  to access part of their retirement fund savings, as income replacement for COVID-19 emergency financial relief.

The Federation wants to clarify, though, that this proposal is not a general application to all workers, but it is only meant to help those workers who were not paid 100% of their incomes through Covid-19TERS fund by giving them access to their retirement savings to cushion financial hardship.

Workers in the public service and others who have been receiving their salaries in full will not benefit from this but will be accommodated in another intervention that is being looked at that will see GEPF and PIC helping them with their housing scheme. Talks are already underway with PIC and in other relevant forums to address this housing challenge for deserving civil servants.

We continue to engage the National Treasury to push that these government employees receive support from the PIC and GEPF to deal with the urgent issue of a Government Employees Housing Scheme.

This new proposed facility will act as an income replacement to help plug the income gap between what the workers are entitled to receive from the UIF and their normal wages/salaries.

 We hope that the Minister will consider this proposal and give it his full endorsement as soon as possible. Before the outbreak of coronavirus, about 11 million South Africans were already struggling to keep up with their monthly payment obligations and many were defaulting.

The economic shutdown has compounded this situation and the very meagre UIF COVID-19 TERS benefit that some of our worst affected members have received is not enough.

With the threat of a rapidly spreading COVID-19 pandemic hanging over the country and the economy, we anticipate that many economic sectors will be detrimentally affected going forward and will not operate at maximum capacity.

We anticipate and hope that this intervention will form part of a sweeping package to be announced in the upcoming reprioritisation budget to combat the economic havoc caused by the coronavirus outbreak.

This pragmatic and balanced approach will not compromise nor compound pressures to the pension funds caused by the market collapse. But it will put money back into the pockets of working South Africans and we anticipate that the withdrawals will amount to less than 1,5% of total industry assets.

 

Issued by COSATU