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Union takes legal step to stop Eskom pension plan

Solidarity wants the GEPF and the PIC to reject the Cosatu plan.

South African labour union Solidarity began a legal process to block plans to use the state pension fund to help debt-stricken power utility Eskom.

The action adds to opposition from other employee groups resisting a proposal by the Congress of South African Trade Unions, the nation’s biggest labour organisation, to cut Eskom’s debt by R254 billion. Cosatu had expected to reach a pact with business on the idea before President Cyril Ramaphosa presents his state-of-the-nation address on Thursday, but has pushed back that timeline.

Read: No labour, business pact in time for Sona

Solidarity said it wrote to the Government Employees Pension Fund and the Public Investment Corporation, which manages the fund, demanding that they reject the Cosatu plan.

“If Solidarity does not receive such a guarantee, or if a decision is made to implement the controversial Eskom plan, Solidarity will take further legal action, which may include urgent legal assistance,” the labour union said in a statement.

Eskom’s inability to provide sufficient power is hindering growth in Africa’s most industrialised economy. The loss-making business has R454 billion of debt and is relying on government bailouts to make interest payments.

Earlier this week, the Federation of Unions of South Africa, which counts public servants among its more than 515,000 members, rejected the Cosatu plan and called for Eskom to be placed under a local form of bankruptcy protection. Cosatu has about 1.8 million members, while Solidarity has 140,000.

© 2020 Bloomberg

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The labour unions should be made acutely aware that their ‘social investment’ will earn a great % bond yield (to the envy of the developed world which has near zero bond yields)

What’s not to like? Am I under mistaken impression that a ret fund desires inflation-beating returns?

Ladies, chill. PIC have not received such a request yet. I think the unions are just looking for brownie points. Like they always do.

Isn’t democracy supposed to satisfy the majority and not necessarily the highest intelligence?

To take govt pensions to fund Eskom – WITHOUT CUTTING JOBS – is sheer lunacy. The money will disappear, simply kicking the can down the road. Then because govt employees have ‘defined benefits’, the govt will have to get money from the taxpayer. But according to the latest SARS figures, 97% of all income tax is provided by fewer than 3 million South Africans (out of 58 million). These few simply cannot be squeezed for much more cash. So govt employees will lose their pensions. QED. How does Cosatu not see that?

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