National Social Security Fund

From the office of the Principal Executive Officer - It was recently confirmed that Government intends to push forward with the introduction of a National Social Security Fund (NSSF). This centrally managed public fund is aimed at providing pensions, death, disability benefits and unemployment benefits and will operate on a defined-benefit basis. All employers and employees will be required to contribute at a combined rate of 12%, inclusive of a 2% UIF contribution, of qualifying earnings. 

Impact of the NSSF on existing contributory funds

The first 10% of all workers’ retirement contributions on earnings up to the NSSF ceiling [R178 464] will go to the mandatory fund rather than to their present retirement arrangements (with the 2% unemployment insurance contribution as before). As a result, existing funds will only receive the contributions over and above the contributions (12%) to the NSSF.

Vested rights

Where these proposals change conditions and the benefit design of retirement funds, the rights of current members who have accumulated funds or benefit entitlements under current rules will be assured. Members of retirement funds may be granted the opportunity to transfer accumulated retirement savings to the NSSF, should they wish to do so, but will not be required to undertake any actions related to accrued benefits.

Implementation

The draft paper was released in November 2016. The proposals for the NSSF are currently being negotiated at the National Economic Development and Labour Council (Nedlac) and it can take up to three years before the National Social Security Fund is implemented.

NFMW members can be assured that the fund will, as always, keep you informed of any further developments. It is also important to note that the above are merely proposals and no definite decisions and/or agreements have been concluded.