Employee pension and provident fund rights

Abstract

Ideally, every employee is required to retire at some stage in life. Some retire at a relatively early age, whilst others work for as long as is possible. The generally accepted retirement ages are 55, 60 or 65, but vary from company to company as stipulated in the specific company's provident or pension fund rules or policy. Once retired, an individual would rely on social insurance as a source of income in the form of pension or a provident fund. Social insurance, in this regard, refers to the earned benefits of employees and is often linked to formal employment. South Africa, as a middle-income developing country, has incorporated such elements into its social security system. The main aim of a pension or provident fund is to provide benefits for its members when they retire from employment, retrenched, unable to work due to illness and for family in the case a member dies while still working. These forms of social security are key to people’s survival and are referred to as safety nets. benefits. Participation on a voluntary basis by the self-employed is allowed but the take-up has been low Employees’ pension and provident rights under a pension or provident scheme do not arise only under the trusts of the scheme but also as contractual terms of the employment relationship between the employer and its employees. This often takes effect on the date of taking up employment, or on entering into an agreement with the employer. Employment law covers all rights and obligations within the employee employer relationship and covers a range of legal issues such as discrimination, wrongful termination, wages and taxation. Many of these issues are governed by the applicable law. Although the South African retirement fund system is in many respects financially sound and well regulated, several individuals still reach their retirement age with inadequate savings. This occurs for several reasons. For many people, during their working life, the build-up of savings is disrupted, or the costs associated with retirement fund provisioning are relatively high. This problem is not only grave for some workers in the formal sector, but largely for those in the rapidly increasing informal sector. Majority of people still lack effective access to an affordable retirement funding vehicle, for the most part, are completely excluded from social protection schemes, social insurance schemes. The South African retirement fund industry has been heavily influenced by a racially divided past and the parallel existence of developed and emerging components of the economy. In the past, racially discriminatory exclusion from the pension fund or provident fund membership was prevalent. In many cases it was indirect discrimination based on job categorisation, such as the distinction between weekly paid and monthly paid staff. Where the staff complement was racially stratified, people were excluded from membership on the grounds of race. Discrimination in the workplace can deny individuals opportunities and thereby deprive society of what those individuals can and could contribute. This has unfortunately been the case in South Africa’s history, the administration of pension and provident funds being one of many examples