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As the world celebrated International Workers’ Day on Tuesday, when people around the world focus on individual workers’ rights for the day, it is worth reminding ourselves that financial transformation that made little to no difference to the vast majority of people would be a rather empty victory.
The national labour strike underlines the pressing need in South Africa to make economic transformation at worker level a reality.
Broader economic participation continues to be a hot topic at the highest levels in politics and business; at the ordinary worker level it is given a lot less airtime.
In February, in keeping with the tradition of budget speeches, then finance minister Malusi Gigaba reiterated the government’s commitment to social and economic transformation. Before outlining national spending plans for the year, which included an increase in VAT, Gigaba said government remained committed to addressing the triple challenges of poverty, inequality and unemployment through the implementation of radical socioeconomic transformation.
Impressive words and honourable commitments indeed, although practical ideas about how this would be achieved at the grassroots level are always quite thin on the ground.
It is not something that workers often consider until it is too late to do anything about it, but one area where South African workers are getting a terrible deal is on their retirement savings.
South Africans pay among the world’s highest fees for the management of their retirement savings. They pay these high fees to an industry that confuses them with a huge selection of complicated and complex products, many of which seem to be designed to serve the industry rather than the savers themselves.
10X was founded as an alternative to this complex industry, with one objective: to give people the single best investment strategy for their long-term savings that will help them to retire adequately.
We have entered into joint venture agreements with trade union-controlled companies, Numsa Financial Services and BIG Employee Benefits, which is majority owned by Fawu (the Food and Allied Workers Union). These partnerships advance economic empowerment in general, as well as achieving very practical immediate benefits such as skills transfer and development.
In the retirement industry everyone seems to focus on where all the money is, on the assets, but for us it is really about who is delivering better value to retirement fund members, and who is looking after those retirement fund members.
If you look at it from a Numsa or Fawu perspective, they are saying: “We are concerned about the high cost of investing that causes our members to retire poor”.
Their anxiety is well-founded in the context of South Africa’s dismal retirement figures: according to National Treasury only 6% of South Africans can afford retire with some level of comfort.
What the unions are saying is: “We would rather get better value for our provident fund savings so that our members retire with more money and have more dignity at retirement”.
Our formal agreements with Numsa and Fawu structures mean that we go collectively to those funds. The unions participate in the value creation as they can earn a percentage of the revenue their members are paying for administration and investment management services, which goes back to the members. There is also training and skills transfer under the joint ventures.
We are sharing knowledge and upskilling our union partners in terms of investments, the impact of fees, employee benefits consulting … and the members are getting better value for their money.
This is broader economic participation and skills transfer at the worker level.
• Steven Nathan is chief executive of 10X Investments
