There are a fair number of reasons why I don't like bargaining councils. The main thrust of which is I just don't see the incentive for business, particularly smaller businesses. The big winner is labour, and after that the big businesses in the relevant sector. For small business it's lose, lose, lose.
I probably need to go into more depth if anyone is really interested, but here is a whole new reason to get pretty fidgety about these councils:
Judgment sets stage for industry pensions plunder
The Supreme Court of Appeal has opened the way for employers that are members of industrial councils to get their hands on billions of rands held in bargaining (industrial) council retirement funds.
And leading pension funds lawyer Jonathan Mort, the director of retirement fund specialised services at Edward Nathan Sonnenbergs, says that if nothing is done to counter the effects of the judgment, the way could be opened for another massive Fidentia-type plundering of retirement savings.
The judgment removes about 1.5 million members and hundreds of billions of rands of bargaining council retirement funds from the protection of the Pension Funds Act. This loss of protection includes:
- The regulatory protection of the FSB; and
- The right of fund members to take complaints to the Pension Funds Adjudicator.
Mort says the judgment will result in retirement fund members losing the massive protection they currently enjoy in terms of the Pension Funds Act because:
- The funds may not need actuarial valuations unless the provisions establishing the funds require them;
- The assets of the funds could be administered as part of the general assets of an industrial council (including its operational funds and other provisions entirely unrelated to these funds);
- The assets will not be subject to prudent investment regulation;
- The Department of Labour, which becomes the regulatory body overseeing these (and other similar) funds, does not have the specialist actuarial and legal resources that the FSB enjoys;
- There is no statutory requirement that the funds must have member-elected trustees;
- There will be no regulatory supervision of transfers between such funds, in contrast to the regulations that govern retirement funds that are subject to the Pension Funds Act; and
- The minimum benefit provisions and minimum pension increase provisions of the Pension Funds Act do not apply.
The court found in favour of various employer trustees that the Engineering Industries Pension Fund and the Metal Industries Provident Fund are established in terms of the Industrial Conciliation Act and are thus not subject to the the Pension Funds Act's provisions.
full story from Personal Finance here