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South Africa proposes a mandatory pension system

Minister of Social Development, Lindiwe Zulu, has published a Green Paper on comprehensive social security and retirement reform for public comment.

It includes a mandatory pension and insurance system among the proposals.

Read also Warning over major retirement change for South Africa

The department said that the absence of a statutory arrangement providing pensions and insurance is the most obvious gap in South Africa’s social security system.

Read also European Union: Putting A “PEPP” In The Step Of European Pension Providers?

“Such an arrangement must be mandatory, should provide adequate but affordable benefits, and should pool risk across the workforce. It should be designed to interact with non-contributory social assistance as well as contributory arrangements, both statutory and voluntary,” it said.

The department said that the design of a new social security system must consider the varying needs and risks of different groups during the life cycle, including death, loss of income/ support due to old age, disability and long-term unemployment.

“Consideration should be given to the changing world of work and experiences of informally employed and informal sector workers – and those in an atypical work environment such as gig economy and platform workers.”

The Green Paper notes that those who live long beyond their salary-earning years need an adequate income in retirement, but those who die young require assurance that their dependents will be provided for.

Read more @Business Tech

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