Numsa swaps risk money spinning with smart retirement funds

By Celeste Ganga
04 February 2008

The National Union of Metalworkers of South Africa (Numsa) are switching from smaller, private, pension funds to much bigger pension funds that are controlled industry-wide for each sector.

“The advantage of doing that, for example in the Steel and Engineering industry, there’s one fund which we have consolidated in the Auto (industry). One which amounts to almost R10 billion and in the Motor and Retail industry,” says Numsa National spokesperson, Mziwakhe Hlangani.

Hlangani explains that the aim of getting single funds for each industry is to ensure that their members get high returns for the value of their contributions.

“What has happened in the past is that in these smaller pension schemes, more than half of the employees’ monthly contributions have been taken away by the high fees that were charged by the fund administration. So we are doing away with the fund administration. We will be doing self-administration which will be conducted by the bargaining councils,” adds Hlangani.

Hlangani says that their target is if one member goes onto pension, he/she will be able to at least get almost R1 million in pension money so that they can continue living their life in the same manner as when they received a salary.