/ 21 August 2021

Teacher begs treasury to rethink excluding public servants from pension withdrawals

Maditsi Cornelius Sebothoma
Teacher: Cornelius Sebothoma says being able to access funds from his pension would be a great help. (Lucas Ledwaba/Mukurukuru Media)

Cornelius Sebothoma, now in his late fifties, has been a teacher for 20 years. He is disappointed that the treasury will not allow government employees, who belong to the Government Employment Pensions Fund (GEPF), to make emergency withdrawals from their pensions.

Speaking to the Mail & Guardian, Sebothoma said such withdrawals would have helped his family, and many others.

“I was really happy and excited when [Tito] Mboweni said we could withdraw some of our pension money. It was going to help me settle my debts, and uplift our standard of living. I was going to pay school fees upfront and pay up the bond,” the father of two said. “It would also cover all the other costs. It was going to be cash in my pocket. I was going to manage to have my own savings, which I cannot right now.” 

In July, former finance minister Tito Mboweni announced that the treasury is having discussions with the National Economic Development and Labour Council about workers who had been hit hard by the Covid-19 pandemic being allowed to withdraw part of their pensions. Mboweni said he had also had discussions with unions and the business community about this proposal.

However, last week the treasury clarified that the withdrawal process would not cover the Government Employees Pension Fund (GEPF), because it is not regulated under the Pension Funds Act. A separate legislative effort will have to be undertaken to amend the GEPF law and allow civil servants to withdraw from their retirement funds.

All government workers who fall under the Public Service Act are members of the GEPF. According to treasury data, in the 2019-20 financial year there were 1.33-million public servants, 830 000 of whom had been working for the government since 2010.

In its statement that no Covid-19 withdrawals would be allowed, the treasury said that the government has been holding discussions with trade unions, retirement funds and other stakeholders about how to increase savings, improve preservation and allow limited withdrawals, without creating investment risks.

According to section 5 of the GEPF governance charter, withdrawals from the fund should be approved by the minister of finance, with the concurrence of the board.

Democratic Alliance MP and labour lawyer Michael Bagraim said allowing workers to withdraw money from their retirement funds will likely help them to survive Covid-19’s economic onslaught.

Bagraim said that because workers cannot currently withdraw money from these funds, many resort to resigning, “so they get access to all the money”. 

“They then use all the money and then get offered a job back with the complicity of their employer. That is incredibly destructive. It is happening all across the country,” Bagraim said. “If you don’t give a person a legitimate way to actually take some money from the retirement funds, you are forcing them to do that.”

This is a practice that happens across the board, Bagraim said — even among public servants. “People are desperate and it has become much worse because of the pandemic.”

Civil servants have the same problems as everyone else, Bagraim said. “They might be earning a little bit more and they might be more secure, ​​but their families have been affected by the pandemic.”

Bagraim added: “It is a disaster from all sides. Why treat public service workers differently from other workers? It makes no sense at all.”

Sebothoma has been a teacher for the past 20 years; he currently works at the Millennium Combined School in Polokwane. He is also the chairperson of the Public Servants Association of South Africa in Limpopo. 

The father of two said he began contributing to the GEPF in 2002. “I only earn R25 000 a month and all of this is attached to commitments: it’s the only income in our household. My wife is unemployed. I have to do bond repayments for our house, since I was forced to extend the matchbox house I had,” Sebothoma said. 

“I am paying my eldest son’s university fees and also have school fees for my son in primary school. On top of all this, I have municipal fees and life policies as well.”

Sebothoma said the announcement by the treasury is a blow for teachers, especially because their salaries had not been increased as promised in 2020.

“My policy premiums and municipal rates went up and, since the pandemic started, we had an additional cost of buying personal protective equipment and multivitamins in the house. We were forced to even take money out of our family savings,” he said. “My wife had a clothing  shop in town and she was forced to close down due to the pandemic.”

Sebothoma said that he could not manage to pay his domestic worker and the man who helped him with gardening, and that he had to let them go for good.

Unions have rubbished the treasury’s position, stating that public servants have also been negatively affected by the pandemic. 

Trade union federation Cosatu has slammed the decision and said that it would not allow the treasury to ill manage the economy.

Cosatu national spokesperson Sizwe Pamla said: “We have written to the new minister of finance and requested a sit-down with him to discuss this issue. We disagree with the treasury, because there is no merit to this. These are public servants’ wages: [they] have nothing to do with the government, and the government bureaucracy has no business with their money.”