Government will not nationalise retirement funds: Nene - CNBC Africa

Government will not nationalise retirement funds: Nene

Southern Africa

by Trust Matsilele 0

Finance Minister Nhlanhla Nene says government will not nationalise retirement funds. PHOTO:aarp/destinyconnect

Nene in a statement said that employees were allegedly resigning from their jobs in order to cash their pension and provident funds.

(READ MORE: Retirement reforms to protect pension fund members)

“Pension and provident funds are safe, and there is no need for employees to resign from their jobs and cash in their pension and provident funds,” read the statement.

“Government respects the fact that these retirement funds belong to their members. Government has never had, and does not have, any intention to nationalise these funds.”

Nene warned of the risks that comes with cashing in retirement funds.

(READ MORE: S.Africa's retirement fund system in need of saving)

“There can be nothing as risky as people resigning from their jobs to cash in their retirement funds and end up being unemployed and losing their security of an income,” Nene warned.

“Such risks are not worth taking, under any circumstances. Let alone to resign from their jobs when the reasons informing such a decision are false.”

According to recent reports, teachers, health workers, members of our police service have comprise part of the employees who of late have been resigning so as to receive retirement fund.

Nene says, instead of cashing in retirement funds, South Africans should focus more on saving for the future.

“South African households seem to be struggling to save, with our households’ savings rate standing at a worryingly low level of 1.7 percent of GDP in 2013,” he said