Absa emphasises support for workers fund

Absa, South Africa’s leading retail bank by customer numbers, has supported Finance Minister Pravin Gordhan’s establishment of a provident fund for domestic and farm workers as this will help protect vulnerable workers. The labour department aims to estab

Cobus Strydom, Head of Consulting: Absa Consulting and Actuaries, has welcomed the step and believes it will lead to greater compliance with labour legislation.

“Absa believes this fund will be based on the principle of social solidarity, which means the risk will be shared right across the work force. This will also lead to less exploitation of workers and more savings for retirement, which ultimately is of benefit to the country”, added Strydom.

Strydom has emphasized the Minister’s call for increased retirement savings as a number of members of provident funds risk outliving their savings. “This is a major concern for Government as some employees often withdraw their retirement savings when moving to another employer without transferring their retirement savings to the new employer. Provident funds as planned by the Minster will ultimately help in fostering a culture of saving for retirement”.

Strydom added that Absa has an existing product, The Absa Home Employees Provident fund, aimed specifically at domestic workers. “The Minster has exposed the need for sufficient retirement savings and our product is geared to addressing this issue. The Absa Home Employees fund has been very successful in recent years, with 3 400 members contributing to more than 7 500 workers,” added Strydom.