About 70% of the country’s 630 000 to 690 000 farm workers do not have retirement funds and will be forced to depend on the government’s Social Old Age Grant (SAOG) when they retire. A discussion paper on retirement fund reform, Enabling a better income in retirement, drafted by the National Treasury, makes specific reference to moving existing and future lower-income workers away from dependence on the SOAG in their retirement.
Tom Moodie, of the agricultural union, TAU SA, said the Agriculture Sector Provident Fund (ASPF) had been established jointly by TAU SA and Agri SA. However, membership of and contributions to this fund were voluntary. While the ASPF provided provident fund benefits, including funeral cover costs, membership was low when viewed as a percentage of SA’s overall farm worker numbers.
“Social security for farm workers is important, as it provides for the welfare of workers,” said Elize van der Westhuizen, senior manager of labour relations at Agri SA. “Affordability (of retirement funding products) is one of the major challenges.
As we’ve seen 31 000 jobs lost (in the agricultural sector) due to the 52% increase in the minimum wage this year, the affordability of a statutory fund would also have an effect on current employment.”
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Agri SA added that retirement funds established by government for farm workers would have to take into account the retirement needs of seasonal workers. Dr John Purchase, Agbiz CEO, supported the idea of retirement savings for farm workers. He said that with higher wages and more training, many workers were becoming increasingly valued employees. Farmers could incentivise workers to stay on the farm by co-contributing to their retirement savings.
Financial services company Old Mutual said it had retirement savings products for workers who earned R5 000 a month or more. Old Mutual spokesperson, Lisette Lombard, said that farmers were showing interest in some of the company’s retirement products.
Read more about the ASPF at www.aspf.co.za.
