Govt withdraws green paper on proposed mandatory pension & insurance fund

Government wanted employers and employees to pay up to 12% of their earnings into some kind of a state-run national social security fund.

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JOHANNESBURG - Government has withdrawn the controversial green paper that proposed a mandatory pension and insurance fund for workers, without giving any reasons for the climb down.

Social Development Minister Lindiwe Zulu published a notice in the government gazette on Tuesday night withdrawing the proposal which had been described as "crazy, extremely flawed and rushed" by many critics.

Government wanted employers and employees to pay up to 12% of their earnings into some kind of a state-run national social security fund.

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Outa’s Wayne Duvenage said that the decision to withdraw this green paper was wise.

He believes that government failed to do proper research before suggesting that taxpayers cough up even more of their hard-earned income.

"There were far too many wide-ranging and negative impacts that just talking about was going to have on the economy," Duvenage said.

The idea of a state-run government pension and social security fund created widespread anxiety and raised concerns about whether the investments would be managed properly and whether workers would actually benefit.

Cosatu’s Sizwe Pamla said that they also believed that government should have consulted more.

"You have to make sure you have your social partners or stakeholders fully engaged. We don't want to shoot the entire thing down."

The green paper was gazetted without Cabinet's approval.

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