04 March 2024
The Federation of Unions of South Africa (FEDUSA) strongly opposes any suggestion to reduce government spending by pausing pension contributions at the Government Employees Pension Fund (GEPF). Public servants’ pensions should not be used as a solution for budget shortfalls in the national budget or any future financial plans.
FEDUSA understands that South Africa is facing tough financial decisions. While it is important to cut wasteful spending and improve efficiency, workers’ pensions should not be the answer to balancing the budget.
A temporary break in pension contributions raises serious concerns about the long-term security of public servants’ retirement funds. Even though some argue that the GEPF is well-funded at 110%, FEDUSA warns that any action that weakens the fund could create future financial risks. If the GEPF’s funding drops below 90%, taxpayers would have to step in to cover the shortfall.
Public servants have contributed to their pensions throughout their careers. Stopping contributions, even temporarily, would unfairly shift financial risk onto workers and could undermine their financial security in retirement. Using pension funds to fix budget issues would also set a dangerous precedent, making workers question whether their savings are truly safe.
This outrageous infatuation with the GEPF and workers’ hard-won contributions needs to abruptly end, unless members of Parliament and the provincial legislatures have the same courage and conviction to risk and place their pension contributions at stake. Instead, FEDUSA insists that guaranteed and sustained sources of income, such as the expansion of the capacity of SARS, can be unlocked through improved inspections and resources at our ports of entry to realise more revenue and prevent further deindustrialisation of our manufacturing sectors.
FEDUSA believes that South Africa needs a serious discussion about government spending. Over the years, efforts to cut unnecessary costs have been blocked by corruption, political challenges, and a growing bureaucracy. While some argue that a pension contribution break could free up funds for wages, education, healthcare, and social grants, FEDUSA insists that long-term financial reform is the real solution, not quick fixes that could have lasting negative effects.
FEDUSA is committed to protecting its members and is exploring all legal options to prevent the government from interfering with pension contributions. The Federation will also continue engaging with government, labour groups, and other stakeholders to ensure fair and open discussions on this issue.
Given these developments, FEDUSA calls on the government to be transparent about its financial plans and to consult with organised labour before making any decisions that could harm workers and their families. Public servants’ pensions should remain untouched in any budget-cutting strategy.
FEDUSA will continue to fight for the rights and financial security of public servants and will take all necessary steps to protect their pensions from misuse or mismanagement.
END.