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Controversial social security green paper withdrawn to ‘obtain clarity’ on issues raised

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lindiwezuluBL Premium reports that according to the Department of Social Development, it withdrew the green paper on comprehensive social security and retirement reform so that clarity could be obtained on some of the issues raised.

It plans to release the paper again once those issues have been addressed. The green paper, which was not approved by the cabinet or Treasury, elicited an outcry of opposition from business and trade unions alike. It was withdrawn by social development minister Lindiwe Zulu in a notice in the government gazette on Tuesday, less than two weeks after it was first gazetted. The motivation for the green paper was said to be “systemic weaknesses” in the private retirement system, which excludes millions of workers. The department estimated that 6.2-million workers with formal jobs have been left out of the system. One of the green paper’s more controversial proposals, which drew the ire of trade unions, was the requirement that all employees be mandated to contribute 8%-10% of their qualifying earnings up to R276,000 to a government-run National Social Security Fund (NSSF), which would pool resources to provide retirement, survivor, disability and unemployment benefits. On the release of the green paper, the Treasury insisted that it was not government policy and that its proposals had not been tested against its tax and fiscal policies. Business also pointed out that the green paper had not taken into account the views that it had expressed in Nedlac, which had been discussing social security reform for the past five years.

  • Read the full original of the report in the above regard by Linda Ensor at BusinessLive (subscriber access only)


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