This comes as the two-pot retirement system takes effect today.

Monoge says the limitation that workers can make on the withdrawals through the system is too low.

She says the 10% or R30 000 ($1,68) limit will not make a dent in household debt.

Monoge says, “Only 6% of SA will retire comfortably. So, if members of pension funds continue to resign to have access to their retirement funding, it places them in the 94% of people who will not retire comfortably.”

“So it is a very difficult situation because people are under a lot of financial stress. Most South African households, on average the amount of household debt that they have is about R100 000 ($5.6), so $1.68 does not really even assist in any way, in helping them to relieve that stress. “

South African Federation of Trade Unions General Secretary Zwelinzima Vavi says the majority of workers end up depending on grants from the South African Social Security Agency (Sassa) even after contributing to pension funds.

Vavi says, “Of the five million people who are on pension about 73% percent of them end up in the Sassa offices queuing for old age pension because they finish off their small contribution. Part of the reason why they are finishing it off is because it was small in the first place because of the low wages.”

“But thirdly, is because they would have deducted that money through the current rules of their pension and provident funds and to the point that by the time they get into a pension, there is absolutely nothing left,” he adds.

--SABC--