Retirement reforms initiated by government have fuelled a rumour that plans are afoot to nationalise pension and provident funds. This has led to an increase in resignations by members who fear a loss of their investments and is a cause for concern claim experts in Human Resource and Human Capital Management (HCM).

In a Parliamentary Statement on Retirement Reforms, the Minister of Finance Nhlanhla Nene stated that “Government respects the fact that these retirement funds belong to their members. Government has never had, and does not have, any intention to nationalise these funds. Rumours to this effect are a blatant lie.”

The Statement also debunked rumour which suggested Government has altered laws on preservation before retirement. “Employees still have the right to cash their pension and provident funds when they resign their jobs.”

HR and HCM professionals believe that the scenario is a cause for concern and will impact both the HR and payroll functions in business. “It will also have an influence on the economy and labour in general, which will then have a knock-on effect on the business environment and confidence,” explains Nicolette Nicholson, Head of Legislation, CRS Technologies.

The direct implication for business is on recruitment and placement. “If people are resigning, albeit as a result of decisions based on erroneous information, it will force businesses to take a reactive stance when it comes to sourcing talent and filling vacancies. This is not the ideal considering the general processes and procedures that take place within recruitment and people management in business,” Nicholson adds.

As a leading local provider of HR & payroll services and solutions, CRS Technologies is focused on HCM functions within the business and the internal and external factors that influence effective application of Human Resources.

Nicholson says Minister Nene has raised an important point stating that the inability of South African households to save and rising levels of debt are underlying reasons for people leaving their jobs.

“The rising cost of living and negative economic trends have weighed heavily on the consumer…it has become difficult for the average household to save. In order to ‘make ends meet financially’, people have looked increasingly to loans and other credit facilities. This obviously impacts on the employment sector and job market in general,” Nicholson continues.

According to leadership at CRS Technologies a great deal more dialogue is required between all stakeholders in order to first eliminate rumours, reinforce the truth and educate the market at large.