In demanding that Cyanamid join the national provident fund, the CWIU challenged the way pension funds are administered. Most South African workers are not able to collect the money their employers contribute to pension funds, the union argued. Only upon reaching retirement age are workers able to draw benefits commensurate with the contributions both they and their employers have made to the pension fund. Most workers lack job security, however, and are not able to wait until retirement age before drawing on their pensions. In contrast, provident funds allow workers, upon leaving a company, to draw benefits equivalent to the money contributed by both the worker and the employer, Crompton explained to Multinational Monitor.
Provident funds are also more flexible than pensions.
For example, workers can draw on them for loans. Provident funds also offer workers the option of receiving their benefits as a lump sum. Many of the questions the union raised about pension funds resonate in the United States as well. Crompton wrote in Trustee Digest. Someone is using pension fund money as investment capital and it is definitely not workers.