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By Anita Dangazele
- The union says government employees are withdrawing their pension savings over and over again just to survive rising daily expenses.
- Food, transport and electricity prices keep going up faster than salaries, trapping desperate public workers in a damaging debt cycle.
The Public Servants Association (PSA) has sounded the alarm as government workers increasingly turn to the new Two-Pot Retirement System to pay off mounting everyday bills.
With the price of food, transport, and electricity skyrocketing, and salaries failing to keep up, the union admits it understands why workers are cracking open their retirement nest eggs. However, they are warning of a future financial catastrophe for retirees.
The union says salaries have not grown fast enough to match the rising cost of living. This forces government employees to stretch their pay cheques just to cover basic monthly needs.
Because of these pressures, many workers see the Two-Pot system as a quick fix. But the union is alarmed by reports of middle-income earners making repeat withdrawals to clear their debt.
The union warns that this creates a dangerous cycle. Workers use their pension to pay off debt, only to fall back into debt and raid their savings again. This wipes out their future investment growth and leaves them with much smaller pensions when they retire.
The union says workers must look for other ways to survive before touching their pensions. It tells employees to get financial advice, check their monthly spending, and ask creditors to lower their debt repayments.
Workers should only pull money from their pensions if they have a real, pressing financial need.
The union blames the government and employers for the crisis. It says the state must pay decent salaries and make living costs affordable. Workers should not have to raid their retirement funds just to stay alive.
Pictured above: A worker holds South African rands.
Image source: File
