Cosatu in favour of proposed mandatory pension system but has some reservations

A green paper is now out for public comment. If the proposal is approved, it will see employers and employees paying up to 12% of their earnings into a state-run national social security fund.

A green paper on the proposed mandatory pension and insurance system is now out for public comment. Picture: 123rf

JOHANNESBURG – The Congress of South African of Trade Unions (Cosatu) is in favour of the idea of a mandatory pension and insurance system but warns that some of the proposals would be "unworkable" for the federation.

A green paper is now out for public comment. If the proposal is approved, it will see employers and employees paying up to 12% of their earnings into a state-run national social security fund.

READ: Concerns raised around govt proposal for mandatory pension and insurance system

Many civil society organisations have raised red flags, questioning whether the money would be guided into the right places or mismanaged by government.

Cosatu's Sizwe Pamla said: “Our job, going forward, is to separate the wheat from the chaff and make sure that we actually work with what we set out to achieve in the first place and workers, and South Africans in general, are better off as a result of this comprehensive social security system.”

Government acknowledges that if poorly designed or implemented, this compulsory contribution could have consequences for the economy and future generations.

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