I move, as an unopposed motion—

I second.

Agreed to.

I move—

1. (1) That on Tuesday, 26 March, the proceedings of the House shall be suspended at 6.30 p.m. and resumed at 8.0 p.m.;
2. (2) that on and after Friday, 5 April, Government business shall have precedence after Notices of Questions have been disposed of; and
3. (3) that the House at its rising on Friday, 5 April, adjourn until Tuesday, 16 April at 2.15 p.m.

The first proposal is the one which is usually made so as to have four days of uninterrupted debate on the Budget. Hon. members will also be able to infer from this, of course, that the whole of next week, from Monday to Thursday, will be taken up by the Budget.

With regard to the question of precedence to be given to Government business as from 5 April, I may say that it used to be customary automatically to grant precedence to Government business after the 51st sitting day as soon as questions had been disposed of, but since the rule has been changed it is necessary to pass a formal motion, which is usually done somewhere near the 50th sitting day. I think 5 April will be the 54th sitting day, and this motion is therefore in accordance with the usual practice of Parliament.

The third proposal is that at its rising on 5 April the House will adjourn until Tuesday, 16 April.

I second.

Motion put and agreed to.

I move—

That this House is of the opinion that the Government, as a matter of policy, should urge Industrial Councils to make provision for the introduction of pension schemes for the employees concerned when agreements are entered into or renewed in terms of the Industrial Conciliation Act, 1956.

Many people, not only in our country but in other countries as well, do not appreciate the value of making provision for their old age. They do not realize the value of belonging to a good pension scheme in order to safeguard themselves in their old age or in case of illness. For this reason alone the propaganda value of the idea of having a thorough discussion of the whole question of pensions in this House from time to time is of the greatest importance. The fundamental idea behind an actuarially sound pension scheme is that every person must during his working life put sufficient money aside so that when he retires he can live on that capital and the interest accruing to it until the time of his death. This will enable him to live reasonably comfortably.

We have the phenomenon throughout the world that people are living longer and longer as a result of better health services and if we have no scheme in terms of which a person can build up assets during his working years, the time will come when the State will eventually no longer be able to carry the burden of old-age pensions at all. This holds good not only for our country but for practically all Western countries. There is concern about this development in every country in the world.

Something of this nature can only come into existence if it takes place on a group basis. The individual himself, with few exceptions, cannot do this. In general the fundamental idea is that this must be done on the basis of group co-operation. From this springs the idea of pension schemes. This is at the same time a source of group saving which plays a great role in the formation of capital in the countries in which it exists and in Western countries it is becoming a steadily increasing source of the formation of capital and the building up of capital. In the United States of America, to mention an example, the annual growth of the capital of pension schemes is already between $2,000,000,000 and $3,000,000,000. This is an indication of the scope of this movement. I will have something to say about the position in South Africa later on.

I would not have dared to move a motion of this nature and to request the Department of Labour specifically to co-operate in establishing pension schemes if it were not for all the changes that have taken place since 1956 when legislation was adopted in this House to place pension schemes under proper control. By means of that legislation we introduced specific control over pension schemes. Confidence was built up and a guarantee of security was given to the participating groups. Because of this sound basis I think that we now have the right to expect every individual in the country to give up the idea (those who still have it): “What is the value of a pension scheme?” Such person must consider it a question of honour to belong to a scheme by means of which he makes provision at this stage for himself in his old age and for his dependants. This ought to be the duty of everyone and employers should also consider it their duty to ensure that their employees belong to such a scheme. I will indicate just now to what extent our people have already become pension-conscious over the past few years, so pension-conscious that I hope that we will soon be able to adopt the view that a person who refuses to belong to a pension scheme simply because he wants to live off the taxpayers or off the State in his old age, by drawing the old-age pension, will not receive the particular State privileges to which he is presently entitled because he will be the exception and not the rule. In general that remuneration will no longer be necessary at that stage. It is one of our great ideals to say that in 25 years’ time we will find that old-age pensions have become unnecessary. It is very unfortunate that the older generation is not in the fortunate position of the younger generation to promote this matter and to ensure that each person is assisted by the time he reaches retiring age.

When we came into power in 1948 there was no legislation to exercise control over funds of this nature. There were quite a number of pension schemes in the country but there was no control. Many of these schemes were unsound from a business point of view. Many went bankrupt. I had a case of a pension scheme in Bloemfontein a few years ago where a member of that pension scheme could draw £13 10s. per month and where the contributions were reasonably low. They then asked an actuary to investigate the fund. He reported that they would have to double the contributions and reduce the benefit to £9 per month. The management of that fund lowered the contributions and raised the disbursements to £22 10s. Of course, that fund could not continue to operate and is no longer in existence; it had already ceased to operate before the law to which I referred was adopted. Public confidence was shaken because of the way in which these funds went bankrupt and there was not much incentive to establish pension schemes and to belong to them. This caused great harm to the idea of pension funds in 1956 in this Parliament and I am pleased to have had the privilege of being able to contribute towards framing this legislation in this House and in the Select Committee. This was a most important step in creating order out of what we can call virtual chaos, to create confidence in pension schemes and to establish safe means of livelihood for old people while at the same time bringing about an important source of group saving and capital formation. When we had this Bill before the Select Committee, we also wanted to include under all the provisions of that legislation all pension funds brought into being in terms of industrial agreements, but the Department of Labour objected; they said that industrial agreements were short-term agreements for three years or so and they did not see their way clfear to comply with the actuarial requirements made for those funds, particularly in view of the fact that they were also voluntary schemes. I think that was a mistake. I think that a plan should have been made to allow the pension section of an industrial agreement to continue even though the industrial agreement was no longer in existence. I want now to point out to the Department of Labour how the pension fund legislation led to confidence being shown in this type of scheme in the country and that in the short period of five years since that Act came into operation there has been a tremendous growth in this regard. I want to indicate why I think that the time has now come for us to make provision for industrial agreements under the Pension Funds Act. These agreements must be fully provided for under that Act.

Our law was a pioneer law. I understand that the Western world often inquires from the administration of pension funds about the operation of this law. They want to follow our example. I hope that by means of that legislation we have rendered a service not only to South Africa but to humanity in general.

From the nature of the case experimental legislation covering new spheres must have shortcomings, and this legislation still has shortcomings which we will have to remove. I want to mention just one or two of these shortcomings. One is that it is too easy for a person to resign from his employment if he needs money; his pension contributions are refunded to him and the next day he seeks other employment. You and I know how often this has already happened in regard to railway employees; they often do this sort of thing although it also happens in connection with private pension funds. I hope that we will be able to frame legislation to prevent this and to ensure that the contributions of any person resigning from a pension fund (naturally because he is resigning his employment) will be frozen for a time so that that person will have to think twice before he resigns in that he will only receive his money in one or two years’ time. In this way we will be able to introduce the necessary stability in the life of such persons. As things stand at present, such a person resigns his employment; he receives a considerable lump sum; he spends that money, and when he becomes old, he again becomes a burden on the State and he has to draw the old-age pension. That is what we want to prevent. Another shortcoming which still exists and for which I feel we must make provision refers to what I said just now about industrial agreements and that is that a fund can be liquidated too easily; it pays out its members and the agreements come to an end or else it decides to close down in some other way and it pays out its members. Some years ago a fund having a capital of more than R2,000,000 was liquidated and paid out this sum in cash to its members. Some of them bought cars and those of them who were not too old started four new funds, one for each province. How they are progressing I do not know but from the nature of the case they must still be in their initial stages. Mr. Speaker, this instability must be eliminated and we will have to make a plan to do this in some way or the other. In terms of the Report of the Registrar of Pension Funds, 23 funds were liquidated in 1961, or rather, deregistered.

But these shortcomings are minor in comparison with the important question. A fact that is beyond all doubt is the security and sound control of pension funds as a result of our legislation and the growing confidence in this idea on the part of the public. The public are becoming pension scheme-conscious in South Africa and we must strike while the iron is hot. It has grown at a far swifter rate than we ever expected it to when we adopted the pension fund legislation in 1956. We have now to show the hon. the Minister of Labour how phenomenal the growth has been so that he can urge his Department to ensure that they co-operate fully in bringing stable schemes into being under industrial conciliation agreements in the future.

The Act only came into operation in 1958, that is to say, five years ago. The Annual Report of the Registrar of Pension Funds shows a phenomenal growth as I shall show later. But unfortunately, it does not include all the pension schemes in the country. There are for example the Public Service and the Railways pension schemes and a variety of other schemes which are excluded from the provisions of the Pension Funds Act. They are excluded for administrative purposes because they are under direct State control. The idea has always been and was at the time we had the Select Committee and passed the Bill, that all these matters should be included in the report of the Registrar and that to this end he should have the co-operation of the Department so that the report of the Registrar could give us a complete picture of the pension position of all existing funds throughout the Republic. I hope that will happen in future.

I want to indicate by means of a few figures the phenomenal growth that I mentioned earlier. At the end of 1958, 2,771 pension schemes were registered with the Registrar. These consisted of 14 industrial agreement schemes with 110,000 workers; 11 State-controlled funds with 1,603 workers; 2,147 underwritten funds (that is to say, underwritten by insurance companies) with 125,587 workers and 599 privately administered funds of which 23 were really not pension fund schemes but registered auxiliary schemes so that the figure of 418,000 workers must be reduced to 285,489. This gives us a total of 542,214 people covered by these schemes. This was only five years ago. In 1961 the figure had already grown from 2,748 schemes to 3,661 schemes with 775,461 workers. The information for 1962 is not fully available as yet but it can already be ascertained that instead of 14 there are now 18 industrial agreement registrations, about 39 foreign funds, 13 State-controlled funds, 3,058 underwritten funds (by insurance companies) and 695 privately administered funds. This gives us a total of 3,834 funds with a total membership of probably no less than 850,000 (the precise figure is not yet known). As regards the financial aspect of the matter I can say that the foreign funds, the State-controlled funds and the privately administered funds (with the exception of underwritten funds and industrial agreement funds) amounted to R384,000,000 in 1958. By December 1961 this amount had already grown to R587,000,000, an increase of more than R200,000,000. The number of funds increased accordingly by 1,000 and the membership by nearly 300,000. In 1958, an amount of R19,000,000 was paid by funds to individual members in some form or other and in 1961 this amount exceeded R33,000,000. To get a complete picture of the position I must mention that the following funds have still to be included in order to reach the total pension fund coverage in the country: The Public Service Pension Fund with 63,000 members, the Railway Pension Fund with 103,035 members, the Permanent Force, Police and Prisons Funds (these are two separate funds) with 41,500 members, the teachers’ funds in the four provinces with 34,650 members, the Public Service Provident Fund with 25,000 members, the Universities and Technical Colleges Provident Fund with 5,800 members (that is to say, in the four Provinces) and the provincial officials’ and nurses’ funds in the Cape and the Transvaal with 9,720 members—I have not been able to obtain the figures for the Free State and Natal but we can estimate them at approximately 3,000 on a conservative basis. If we add this figure to the 775,461 who were already members of registered pension funds at the end of 1961 we find that we already have 1,061,166 persons covered by pension schemes in our country.

The funds available excluding those for which I have not been able to obtain figures—that is to say, those for the provincial officials, nurses, universities and staff of technical colleges—already amount to about R 1,274,000,000 and these funds are growing by between R130,000,000 and R140,000,000 per year. Here we already have a tremendous factor in the process of the formation of capital in the Republic. The position is so bad that some funds are starting to ask where they can invest their money. I hope that as far as this is concerned we will investigate investment possibilities for them to see whether anything can be done in this regard. But this is a matter to which the hon. the Minister of Finance must give his attention and I am sure that he will do so. We have an economic giant there and we can build it up until it eventually embraces the whole nation.

The role which has to be played in this connection by the Department of Labour can be greatly increased. If we consider that there are 95 industrial agreements in existence, according to the statement I received from the Department, which include the following numbers of workers: 156,545 Whites, 78,609 Coloureds, 30,134 Asiatics and 300,618 Bantu, a total of 565,906, then it is not particularly encouraging to note that in 1958 there were pension funds covering 110,000 workers for only 14 of these 95 industrial agreements; that at the end of 1961 this number had only increased from 16 to 18 schemes and the number of workers had only increased by 10,000 to 120,677. If we deduct the steel workers (they are covered by a good scheme) and comprise 43,000 Whites, 7,000 Coloureds and 1,500 Indians, or a total of 51,700, from the 120,000 whom I have already mentioned, we find that there are only 69,000 persons remaining who are covered under pension schemes out of all the workers covered by the Industrial Conciliation Act which includes all races, not only the Whites. Only slightly more than 20 per cent of the persons falling under industrial agreements are covered by pensions schemes. There may be other workers who are covered and who fall under these schemes, persons belonging to schemes which have not been considered under an industrial agreement, but we know nothing about that; neither do I know whether the Department can give us any information in this regard. In any case I doubt whether there can be many of those.

If we consider that 1,060,000 people are already covered by pension schemes, while there are only 120,000 people registered under industrial agreements falling under pension schemes, we must admit that the position is not too satisfactory. It is difficult to determine precisely how many workers there are in the country. I understand from the Office of the Receiver of Revenue that there are more than 900,000 salaried taxpayers. How many of these are White and how many are non-White we do not know, but I think that if we estimate the total number of workers at between 1,700,000 and 1,800,000 this is a fairly high figure for our workers in the country—people who are actually working, with the exception of domestic servants and farm workers. In that case we find that more than 60 per cent of them are covered by pension schemes, and here industrial agreements, compare very poorly with their coverage of slightly more than 20 per cent. I think therefore that the time has come for something drastic to be done to bring those workers who are still not covered by pension schemes under the provisions of pension schemes and to make them aware of the benefit of those schemes and to organize these things for them. Here the Department can play an important role in organizing things and ensuring that these people have the necessary information and guidance when an industrial agreement is entered into. In this connection the Registrar of Pension Funds can be of very great assistance to the Department of Labour because the Registrar of Pension Funds has what one can call a model prospectus for the drawing up of pension funds and I think that there ought to be close co-operation between the Department of Labour and the Registrar to see what can be done to organize this matter properly. I think that it will even be a very good thing if persons are appointed by the Department of Labour or the Registrar of Pension Funds, or jointly, persons who have nothing else to do but to visit the various labour organizations in the country to advertise the fact that people should establish good schemes in order to make provision for their future.

There are of course certain reasons why there are insufficient pension schemes for these workers under industrial agreements. I think that the most important of these is because an agreement of this kind is of such a temporary nature; that these people enter into an agreement for three years and that after three years that agreement expires and at the same time that pension scheme may also fall away. The result is that there is no stability and consistency. The temporary nature of an industrial agreement is, I think, the most important factor which results in the fact that we do not have the success in this regard that we have in the other sectors of our economic life in connection with pension schemes. I want to suggest therefore that the Department of Labour, when concluding an industrial agreement involving a pension scheme, should ensure that a permanent board of trustees is set up over the pension scheme so that that scheme can continue to operate after the agreement has expired. I think that this is basically of the greatest importance if one wants to be successful in this regard.

There is a second adverse factor and that is, as officials of the Department of Labour have informed me, that if they raise the question of the establishment of a pension scheme, as a part of the industrial agreement, with the trade unions, then these people say no; it merely hampers their chances of being able to draw the old-age pension. I think that this is a state of mind that we can only change by means of education. We must educate these people and we must make full use of the present spirit in terms of which the people are becoming aware of pension schemes. We must educate these people in regard to the value of these schemes, cultivate the necessary self-respect amongst them and make these people feel that if they work at a place which has no pension fund, they will be working for what is virtually an inferior organization. I already know of cases where people refuse to work at places that have no pension schemes. Others boast about the fact that there are such schemes in existence. I think that the time has come to educate these people so that this will be the consensus of opinion throughout the country.

There is a third factor and that is the fact that industrial agreement pension funds do not fall completely under the Pension Funds Act. They are not required to comply with the provisions laid down by the Pension Funds Act. The result is that sometimes a rather slap-dash system is brought into being, and that it simply does not work. These people ought to have schemes which comply in all respects with the law dealing with pension funds and I hope that the Department of Labour will change the view that it adopted in 1955-6 in this connection when it said that it did not want to be covered by the legislation, and that they will agree to the hon. the Minister of Finance amending the law in this respect so that all pension funds brought into being by industrial agreements will also be able to fall under the Pension Funds Act. I am sure that the hon. the Minister of Finance will be prepared to introduce such legislation.

Apart from industrial agreements, the Wage Board also falls under the Department of Labour and the Wage Board has 143 determinations which are of force and effect in the country at the moment and which cover 445,305 persons—120,000 Whites, 49,000 Coloureds, 18,000 Asiatics and 257,500 Bantu. At the same time a quarter of these people fall under industrial agreements and are accordingly partially or completely exempt from their wage determination agreements. The industrial agreements are usually on a higher scale of remuneration than the determinations of the Wage Board. In many of these cases the circumstances are of such a nature and the labour and the working conditions are so unstable that pension schemes will not be practicable for them at this stage, although we hope that they will become practicable eventually. But there are many cases where a fund of this nature will be practicable, and although the motion does not specifically ask for it, I think that the hon. the Minister of Labour ought also to ask the Wage Board, or instruct it, to make such schemes part of Wage Board determinations in cases where it is practicable to have these schemes. I feel that there is also a wide field that can be covered in this sphere and it can only be to the benefit of the country as a whole and of the workers concerned.

Here I want to warn pension funds against a very dangerous thing. We read recently that the Johannesburg Board of Executors, which had been in existence for 70 years, was in liquidation. In that trust organization—and this also happens in other places—there are what they call participating mortgages; in other words, they have a large morgage on a property and a number of different pension funds each contribute part of the capital. That money is then lumped together and one bond is passed in favour of the trust organization concerned. That trust then goes into liquidation, or it goes insolvent, but the bond is not registered in the name of the particular bodies which have advanced the money; it is registered in the name of the trust and the result is that those other people may lose their money. I understand that in this case they will not lose it. There are other factors which will result in their not losing their money. But I want to make an appeal to pension funds to be very careful about this sort of thing and not to issue a bond without ensuring that that bond is registered in their own names. If groups of them join together to issue a mortgage bond, they must float a separate company which may have no other assets or liabilities than merely that one bond. This is the only way to protect themselves. I think that this warning is necessary with a view to the funds that we have in the country.

I want to conclude by making an appeal to the hon. the Minister of Labour to assist us in extending these pension funds as far as possible to all the organizations which work through his Department by way of industrial agreements and Wage Board determinations. Our policy is to extend these matters. At least 60 per cent of our workers are already covered by pension schemes and we can increase this number. It appears to me that the largest field for expansion remaining is the industrial agreements and the Wage Board determinations because there are large numbers of people in this sphere who are not yet covered. I think that we can boast of the fact in South Africa that so many of our people are already covered by pension schemes. There are nearly 4,000 schemes covering more than 1,000,000 people, schemes with a capital of R1,300,000,000 and a growing capital of between R130,000,000 and R140,000,000 per annum. This is something to be proud of. I think that this system is established in our way of life; it has become practically a way of life so that it no longer helps to talk about other schemes like a national contributory pension scheme. One cannot liquidate the great assets that have been built up under these various pension schemes and substitute a cheap, uniform thing for the whole nation, based on the income of the lowly paid groups. I think that it has become part of our way of life that South Africa wants to ensure that every person is entitled to a pension and belongs to a pension scheme which is in accordance with his status in society and his income so that he will be able to receive an equivalent pension one day.

I also want to make an appeal to the workers that where there may still be some of them who say that they do not want to belong to a pension scheme because this will merely hamper their chances of one day drawing the old-age pension, to change their view. The time will come when we may have to force it upon them if they continue to maintain that point of view. The time will also come when they will form a small minority and when they will be the exceptions. We must make an appeal to them and make them understand that they owe it to themselves, to their dependants and to the State to ensure that they make provision for themselves in their old age and for any illness that may befall them while they are working by belonging to a good pension fund. I move.

I second.

If ever we have had an occasion when the policy of the Government has been laid bare before us in respect of pension matters, it is this motion which has been moved this morning. The motion we are dealing with is so restricted that it is only because of your kindness, Mr. Speaker, that the hon. member has been able to make a speech at all. The portion of his speech which dealt with the motion itself occupied only about ten minutes of his time. The rest was outside the scope of the motion, and I want to tell the hon. member that we made an attempt to move a motion which would enable him to have the kind of discussion he wanted, but unfortunately we were prevented by the Rules of the House from moving such an amendment, because it would have widened the scope of the motion. Therefore we are restricted entirely to the question of pension schemes which are under the control of Industrial Council agreements, a very narrow field indeed. But I think that the points made by the mover indicate quite clearly that what he had in mind when he introduced this motion was that there should be a discussion on the whole question of pension schemes and pension funds in respect of all workers in the Republic. That is what he had in mind, but he has defeated his whole object by moving a motion which is most restricted. I think that this is an unfortunate position. We would have liked to have a full discussion of the whole matter, and with a suitable amendment we should have had it, but the hon. mover has defeated this purpose completely by introducing his motion in this restricted form. This motion says—

We cannot go further than that. Any attempt to move an amendment to widen the scope of the debate can only be within the ambit of the Industrial Concilation Act and cannot go any further. I think the hon. the Minister will find, when he makes inquiries from Mr. Speaker, that our position is therefore restricted, as I have indicated. If hon. members opposite can move an amendment which can be accepted, we would be only too happy to debate the whole issue. We have done our best to discover a way of overcoming the narrowness of this motion and we have failed, and therefore we are left in this position.

You have failed in so many things, so why are you worried about this?

The point is what the hon. mover has indicated in this motion. He is indicating that the Government has no policy in regard to industrial councils and pension funds. He urges them in the motion as a matter of policy to do something which the trade unions and the workers themselves and their employers have been doing for years, indicating that as far as the Government is concerned they have no policy in this regard, and that they have failed to take cognizance of their responsibilities in this regard. The motion itself is an admission of the failure by the Government to face up to this issue, and it is necessary now for the hon. member by way of the motion to ask the Government as a matter of policy to do something which has been done for years by employers and employees under industrial council agreements.

However, I want to come back to some of the points made by the mover of the motion and analyse just what it means. He has said quite clearly that he favours compulsion. He would like to see the Minister of Labour refuse to sign an industrial council agreement unless that agreement provides for a compulsory pension fund. Here I think I should draw the attention of the House to the confusion which exists in the mind of the mover in regard to the distinction between a pension fund and a pension scheme. He has dealt with the report of the Registrar of Pension Funds for the period ended 31 December 1961, and he has based his whole case on the fact that at the end of 1961 there were only 18 funds established in terms of industrial council agreements, dealing with pensions. But if he had gone to the trouble of ascertaining what the facts are, he would have discovered that out of the 95 industrial council agreements which there are in the Republic at the moment, in respect of 65 of them pension schemes are already included.

You are including the medical schemes, and they are not pension schemes.

I am speaking of pension schemes as distinct from pension funds. A pension fund, in terms of the powers of the Registrar of Pension Funds, is a fund which is actuarially sound and must be registered, and there are only 18 of them registered with the Registrar. But my information is that in respect of the 95 industrial councils, 65 of them have pension schemes.

That is not correct. I got my information from Labour itself.

So did I. When the Minister replies, he will state the position, because included in the report of the Registrar is Chapter 5, which deals with underwritten pension funds, and there we find that there are a considerable number. We find, e.g., that of the underwritten funds there are 2,768 registered, and these include group insurance funds. The underwritten funds include many of the type of schemes which are now included in industrial council agreements, in respect of group schemes. Therefore, when we deal with this question of the number of industrial councils which has already taken the initiative in respect of pension schemes, we must not be misled by the report of the Registrar of Pension Funds when he deals with this question of the number of funds. Those are funds which we understand to be actuarially sound, and which have been registered, hut they are not to be confused with the schemes which the mover has in mind in his motion. I would remind you, Sir, that the mover does not refer to pension funds but to pension schemes, and there is a considerable difference between the two. That is why he has fallen into this error of assuming that pension funds and pension schemes are one and the same thing. I hope that when the Minister replies on this question he will do his best to clarify the position.

Another point made by the mover of the motion is that he wants legislation to prevent persons who resign from their employment from withdrawing their pension contributions. Well, here we are up against a very difficult problem and I hope that we will get further information from hon. members opposite when they take part in this debate, because if you on the one hand ask for legislation preventing persons from withdrawing their contributions from a fund, because you want them to have a pension when they retire, and then on the other hand you suggest that industrial council agreements which are only of three years’ duration at most should be so amended as to give continuity, you will find that you are up against the very problem which we as a party have foreseen, and that is that you have so many individual funds where you have workers going from one industry to another, and how can you obtain continuity of payments of contributions so that they can obtain a pension when they retire? That is a major problem; it is a major administrative problem. But if we had a national compulsory contributory scheme it would be possible for the very things which the mover has in mind to be achieved. I am convinced, after listening to the hon. member for Pretoria (Central) (Mr. van den Heever) that he has made out a case for the establishment of a national compulsory contributory pension scheme. Why I say that is this. He says that the weakness of the present system, firstly, is the short life of industrial council agreements. There can be a break in the continuity, and secondly, that workers are not keen on making contributions to a pension fund because they depend on the old-age pension which they will qualify for if they have no other means. Fourthly, he said that the Wage Board should also be included, although it is not mentioned in the motion. I cannot even discuss Wage Board agreements or the possibility of that being considered by the Minister because it is outside the scope of this motion, but the mover of this motion did say that Wage Board agreements should also include provisions for pension funds or pension schemes. Well, the Wage Board, when it makes determinations, covers a tremendous number of employees as well as a large number of employers, and one can imagine how difficult it would be to organize a fund for pension purposes, or a pension scheme, in respect of so many employers where in many cases such employers have only one or two employees in their employ. Therefore the question whether we should have, as is indicated in this report, in the summary—there are now 17 industrial council funds, 36 provident funds, State-controlled funds, 15, and underwritten funds. 2,768, and private funds, 674, making a total of 3,510 funds—here we have a tremendous duplication of administrative work in respect of the administration of all these funds and schemes and the amount now involved in maintaining the records must be enormous. In the place of all this we have asked for a national contributory pension fund, but we cannot put the case and we are therefore compelled to deal with the motion as it stands.

What do we find? We can divide the motion into three parts. The first is what the Government should do as a matter of policy. It is no surprise to us, but I think it is a surprise to many workers in the country, and possibly to hon. members opposite also, that the Government has no policy in this regard, and that they now as a matter of policy have to urge their own Government to take steps in regard to industrial council agreements and pension funds. I find this most amazing, because of what has been said in the past. I am convinced that when the mover worded this motion he was thinking in terms of what he knows of workers in his own area, and how they are continually appealing to him for some form of pension fund which will enable them to make provision for their old age. He has now thought it advisable to bring pressure to bear upon the Government by introducing this motion and asking it to take steps to urge industrial councils to do so as a matter of policy. So all I can see is that a lot of people throughout the Republic have been under a misapprehension in regard to the policy of the Government in connection with this very important matter of pension funds and industrial council agreements.

Secondly, the motion says that the Government should as a matter of policy urge industrial councils to make provision for the introduction of pension schemes—not funds. I say that if the Government is to be urged as a matter of policy to do that, surely we on this side of the House are not going to oppose a motion of this sort. We introduced the Industrial Conciliation Act and we placed no restrictions on industrial councils in regard to providing pension schemes or pension funds in respect of their workers. It is an accepted part of United Party policy to have them. But at the same time we do not want to see any Government interference with the basic principle of that Act, and that is in regard to collective bargaining. I think the Minister should tell us how it is possible for him to interfere with the industrial councils in a way which will enable them to do what the mover of the motion wants. How can he urge the industrial councils to do something which they themselves are not keen on doing? As I have indicated, 65 out of the 95 have already done something about it, so what does this motion mean? Seventy per cent of the industrial councils have already done what the motion asks for, but the mover only thought that 18 out of the 95 industrial councils had moved in the direction he has in mind. You see, Sir, in moving a motion and dealing with pension schemes and not pension funds, he has put himself in a most invidious position. He has presented a case to the House and now finds that his premises are completely wrong and that his conclusions are completely wrong. But the third part of this motion says that the Government should urge industrial councils to make provision for the introduction of pension schemes, and to whom is this to apply? It is to apply to employees covered by wage determination under the Industrial Conciliation Act but nowhere else. There is no reference to the Wage Board which he dealt with. It is only to apply to those who are covered by the Industrial Conciliation Act. Well, this narrows down the figure considerably in respect of whom we should now be considering. But in view of the fact that 65 out of the 95 have already introduced schemes, including the establishment of funds, it does appear that 70 per cent of the workers are already covered in some way or another, and therefore what the mover is really agitated about is the 30 per cent who have not yet been covered. But we do know that a considerable number of workers have already made their own arrangements by a combination of groups, and that sort of thing, to make provision for the time when they can no longer be gainfully employed. In trying to support a motion of this sort, the United Party finds itself in this position that what is being asked for here is what we have always accepted as natural and normal, and here we find the hon. member for Pretoria (Central) pleading with his Government, as a matter of policy, to do what we have accepted as the normal thing. But we would be wrong if we did not support the motion. It is our duty to assist the hon. member in urging the Government to do something in respect of the workers, and for that reason we are going to support this motion.

They need a lot of urging.

We should have liked to have had a much wider discussion on this whole question, with a suitable amendment if it had been permitted. We therefore find ourselves in this unprecedented position that we support a motion moved by the hon. member for Pretoria (Central), a motion which, if accepted, will give effect to United Party policy, and we find that the hon. member pleads with and urges the Government to help us to establish something that is desirable in the interest of the worker. This whole policy of pension schemes for the worker has long been accepted by the United Party as the desirable way in which provision can be made for those who retire as the result of advanced age. Provision is already made for it in the law. We have encouraged trade unions and not only trade unions but employers to take steps in this direction. The hon. mover finished his speech by appealing to the Minister to do something about this and then he appealed to the workers but he forgot to appeal to the employers, and in terms of our industrial conciliation machinery collective bargaining between employer and employee is the main component, but he forgot about the employers.

I did mention them.

Oh, did they get an honourable mention? Well, that amazes me. In any case, I think we have demonstrated quite clearly that this motion is so narrow but yet deals with something which has been accepted by us as the normal thing, that we have no alternative but to give our support to a Government member who comes along at this late stage in 1963 and urges the Government to do something which we have always accepted as the normal thing.

I think the next point which the mover made ties up with this question of compulsion. He wants to bring about a measure of compulsion, so that once a person has made a contribution to a pension fund, his contributions will remain there until he is too old to work. That, of course, is one of the basic principles of a national contributory pension scheme. The principle is that no matter where a person works it should be possible for him to continue making his contribution to such a national fund and to get the benefits when he reaches the retiring age. Sir, you will remember that when we had brought forward specific motions dealing with this subject in the past, the main objections put forward by the Minister of Finance had been the difficulty in collecting the contributions in respect of a national contributory scheme. I do not propose to pursue that, but we must remember, of course, that we now have the P.A.Y.E. system which would make it extremely easy to collect the contributions. You see, Sir, the mover realizes that the case that he presented outside of this motion was really in favour of a national contributory scheme.

Do not be silly.

He also realizes that such a scheme is possible now that we have the P.A.Y.E. system in operation because it will now become so much easier to collect the contributions. As far as we are concerned we have no way of widening the scope of this motion. We want to support it because we do feel that the Government should as a matter of policy be urged to take a greater interest in this matter, and for these reasons we are going to support the motion and I do hope that it will also have the support of other hon. members on the other side.

One really has to smile when one hears the hon. member for Umhlatuzana (Mr. Eaton) trying to split hairs regarding the restricted scope of the motion and trying to suggest that the Government actually has no policy in regard to this matter. I think that the National Government’s policy is very clear in this respect. We have expressed our opposition to a national pension scheme over the years in this House. The hon. member for Umhlatuzana and the hon. member for Yeoville (Mr. S. J. M. Steyn), the great protagonists of a national pension scheme, know that the National Party Government has expressed itself against a national pension scheme. We have particular reasons—reasons which under the circumstances I am not able to state here to-day—but I want to point out that a few years ago the National Government sent a one-man commission overseas to make a study of the various systems in the various countries. Upon his return that person reported adversely upon national pension schemes. He said that the advantages to be derived from those schemes did not justify the expenditure on the part of the State. On the contrary, he said that many countries were sorry that they had ever started national pension schemes. I do not want to deal with this matter in too great detail because it falls outside the scope of this motion but I do want to say that the National Government’s policy is to have every productive person in this country covered under a pension scheme as far as possible and the Government has taken the first step in that connection. In the first place legislation has been placed on the Statute Book to ensure sound control over pension funds and to get a picture as to the legal and practical position in connection with pension funds in the country. To-day, now that that law has been in operation for four years, we can form a picture of the position in respect of pension funds in the country. Besides this the Government has made tax concessions in respect of contributions to pension funds and in its latest Budget the Government has made a further concession in order further to encourage pension schemes.

I just want to say something about the difference that exists between the hon. members for Pretoria (Central) and Umhlatuzana in regard to the question of numbers. It is true that a larger number of industrial council agreements make provision for various kinds of pension funds, but some of those pension schemes are in the form of mutual aid funds. Then we have our group schemes but there are only 18—at the moment there may perhaps be more—which are covered by the provisions of the Pension Funds Act. We want a sound control of pension schemes. The Act lays down certain requirements. At the moment there is a limited number of funds which comply with these legal requirements, and that is the whole issue here.

But the motion makes no reference to it.

I am sorry that the Opposition are trying to make a certain amount of capital out of this matter. I want to start by saying that I am grateful to the hon. member for Pretoria (Central) for having introduced this motion.

So are we.

Our intention is eventually to have the whole population covered by pension funds. That is the great ideal that we are striving to achieve and this motion of the hon. member is a further step which is designed to have another section of our industrial workers covered by pension funds. The hon. member has already referred to the large number of workers who are covered to-day. It is a good thing to note— and the hon. member for Umhlatuzana pointed this out—that this motion is permissive. We cannot introduce a legal obligation in respect of industrial councils because industrial agreements and even industrial councils are voluntary institutions. An industrial agreement is a voluntary agreement between employer and employee and therefore one would actually be acting to the detriment of collective bargaining if one made it compulsory by law that an industrial agreement should make provision for a pension fund. If one did so, one might perhaps destroy such an agreement because it may very well happen that no agreement can be reached between employer and employee on this one point while agreement is reached on all the other points. That is why I say that it is not possible to make this compulsory and that is why the hon. member is also correct in asking the hon. the Minister and his Department to try to use their influence to persuade industrial councils to make provision for pension funds under industrial council agreements.

As I say, it is true that there are certain problems connected with this motion, but those problems are not insurmountable. The hon. member pointed out that an industrial council is sometimes a temporary body; it can be dissolved and then re-established, and the question is what is to become of the pension fund when an industrial council is dissolved and then re-established? I want to point out that provision is made in industrial agreements in regard to the manner in which such a fund is to be administered when an industrial council ceases to exist. There are certain possibilities; for example, trustees may be appointed from the employers’ and employees’ organizations to act as a controlling body to control these funds. There is another problem and that is that industrial councils sometimes consist of a very large number of employers’ and employees’ organizations and one finds that some of the employers’ organizations have their own pension funds. The hon. member for Pretoria (Central) referred to the Iscor pension fund. There are as many as 30 or 32 employers’ organizations connected with the industrial council for the iron, steel and engineering industry. Here we have a large institution like Iscor which already has a pension fund for its employees. In other words, a section of the employees falling under the iron, steel and engineering industrial council are already covered and the others are not covered. If one resorts to the establishment of a pension fund under that industrial council, it will mean that duplication may arise and that some employees will be asked to contribute to two funds. Even this is not an insurmountable obstacle because one can leave it to the employee himself to decide to which of the funds he wants to contribute. He does not necessarily have to contribute to both funds. I do not think that this is an insurmountable obstacle. I think it is a good thing therefore for the Department of Labour to use all its influence and energies to persuade industrial councils to establish pension funds. There are indications, as has already been shown by the hon. member for Pretoria (Central) and the hon. member for Umhlatuzana, that the institution of pension funds is becoming popular to-day. There are indications that there is a desire for pension funds to form part of industrial council agreements. Mr. Speaker, I shall be pleased if the hon. member for Yeoville will listen. He is an authority on labour matters. As I say, there appears to be a desire on the part of the worker that industrial councils should make provision for some kind of pension scheme or another. There is therefore no reason why we cannot continue in this way to see whether we cannot have all the industrial workers in the country covered by pension schemes.

Hear, hear!

I just want to point out that industrial councils which are of a temporary nature are actually assisted to some extent once they have a pension fund. The Department of Labour assures me that once an industrial council has a pension fund, that has the effect of stabilizing the industrial council. There are very few industrial councils which dissolve once they have established a pension fund. This is actually a factor which keeps industrial councils together and the Department of Labour assures me that once the fund is strong and is of great importance to the workers, it becomes a factor which makes it easier for an industrial agreement to be reached when negotiations take place. That is why I say that even the purpose of creating stability amongst our industrial councils will be promoted by means of pension funds. This will also create stability in our industrial life if we can give more stability to our industrial councils which to-day form the basis of our labour and industrial pattern by giving them something of a permanent nature in the form of a pension fund. This can only have a salutary effect upon labour relationships and can only tend to stabilize industrial councils in the country. I think that in this connection the Department of Labour welcomes this motion. There is also another reason why this forms a stabilizing factor and that is that experience shows that the worker who makes provision for his family and his old age is a more stable worker. In other words, once one can get him so far as to contribute to a pension fund, he has a feeling of security which has a very good effect upon that worker and his family. It helps to create vested interests which will keep him in the industry in which he is employed.

This motion of the hon. member for Pretoria (Central) amounts to a plea that we should use every possible means—amongst others, this means of industrial council agreements—to have our people covered by pension schemes. This is a very important point because the problem that we are faced with in this country is growing daily. It is wrong for us to expect the State to do everything. It undermines the feeling of independence of our workers; it undermines their initiative and their backbone. If a person does not make provision for his old age and for the future of his family it undermines his self-respect and his backbone. That is why I say that we must encourage the workers to make provision for their old age themselves. In this connection I recently read an interesting report dealing with a speech which Lord Beveridge, that well-known advocate of the so-called Beveridge Plan of the ’forties, made in 1958 to the International Association for Social Security. In that speech Lord Beveridge said that he adhered to his original idea that the State should do something for the individual but that the State should not do everything; in other words, even Lord Beveridge admitted that he had never considered that the State should do everything in regard to the care of the aged. He said further that social security was assuming such proportions that it was almost impossible for many people, and even for him, to have clarity in regard to the various aims. In other words, even this great advocate of social security schemes admits that national pension schemes have increased out of all proportion and that it is not practicable to continue with them. I say that the sense of responsibility of the individual to make provision for his old age must not be undermined by State assistance. State assistance must also encourage the individual not to withdraw his labour from the labour market too soon. In this scheme which is now being proposed the intention is to give stability to the worker and to encourage him to stay in the labour market as long as he can in order by so doing to build up the benefits for which provision is being made for him under the pension scheme. I want to point out that the problem that we are faced with to-day, the problem of having our people covered by pension schemes, in connection with which we have to make use of every possible means to find a solution, as do the industrial councils, is that the percentage of older people is becoming larger and larger in relation to the percentage of younger people amongst our population. In other words, while the percentage of older, unproductive people is growing, the percentage of productive people who are employed is becoming smaller, and this means that a smaller percentage of the population has to carry a greater burden. I want to point out that it has a very good psychological effect, upon them if people feel that they can look after themselves. If we can keep a person within his own sphere as a useful worker for as long as possible, it means that we give him a realization of his own value in his old age. It is a tragedy when old people get the idea that they no longer have a task to perform and a function to fulfil in society. That is why I believe that if we encourage these pension funds under industrial councils in the labour sphere, people will remain in service longer and will retain that feeling of usefulness. I want to point out, if you will permit me to do so, Mr. Speaker—and I want to express my gratitude in this regard—that the hon. the Minister of Finance has seen his way clear in his latest Budget to make further concessions in connection with contributions to pension funds for tax purposes. I just want to refer here to an interesting fact that the hon. member for Pretoria (Central) did not mention. A few years ago the hon. the Minister of Finance made a concession in respect of self-employed persons in regard to the deduction of contributions to pension funds for tax purposes, and it is interesting to note that to-day we already have 21 funds for these so-called self-employed persons. There are 17 underwritten funds and 7 private funds. I want to point out that even workers can make use of this concession made by the Minister by contributing to a pension fund under an industrial council scheme. These contributions may be deducted for tax purposes.

I want to conclude by saying that we hope that we will soon reach the stage where the percentage of people in the country not covered by some pension scheme or other will be so small that we will be able to make the establishment of pension funds compulsory for everybody. The motion of the hon. member for Pretoria (Central) has one purpose and that is to contribute towards the complete coverage of everyone by means of pension funds· I say again that this is an attempt to have all industrial workers, particularly those falling under industrial council agreements, covered by pension schemes, and I hope that the hon. the Minister will see his way clear to comply with this request.

It is a pleasure for me to support this motion because the introduction of pension schemes under industrial agreements can take place on a voluntary basis, it is not being made compulsory. If it had been compulsory, I certainly would not have been able to support the motion because there are certain disadvantages attached to it. One may find that the employer and employee agree on all points but that in regard to this one point—the introduction of a pension scheme—they cannot reach agreement, and the result will then be that such an agreement will fail. It may also be that such an agreement is of very short duration and then it will not be practicable to make such a pension scheme compulsory. Another shortcoming is that a worker may perhaps already be a member of some pension fund or other and if this is made compulsory, it will mean that he will have to belong to two pension schemes which will be very expensive and quite impracticable.

I find it very strange that the Opposition have not moved an amendment to-day and I also find it very strange that they say to-day that they support this motion. When the Opposition say “Yes”, one must always think of a bee; it does have honey in its mouth, but it also has a sting in its tail, and we have learnt to be careful in our dealings with the Opposition. I want to put it this way, that if we do not have a voluntary pension scheme then the alternative will be a State-aided scheme. That is the policy that has been advocated by the Opposition for some time but when they were in power they were too weak to do anything for the pensioners in this country. Under no circumstances were they ever prepared to do anything for the worker in South Africa, and because the worker of South Africa realized that the National Party was the party looking after his interests, he put the National Party Government into power. The Opposition now plead for the workers of South Africa merely for the sake of political gain. Nevertheless we are very grateful for the crumb which has fallen from their table for the worker and for the fact that they are prepared to support this motion to-day. If we are going to have a State-aided scheme—that is the alternative—we will find that it is impracticable; we will have discrimination then. The young people of to-day will have to pay for the older generation then. The position is not that the young man will only start his own pension scheme if the State makes a start to-day with the introduction of such a scheme.

Order! The hon. member must keep to the motion.

I am actually dealing with the motion specifically, Mr. Speaker. I must put the alternative position in order to prove that this is the correct thing to do; that if this motion does not go through, then the alternative scheme will have to be introduced and if the alternative scheme comes into being, it will be disastrous. I can only prove the soundness of this motion by indicating the disadvantages of the disastrous scheme which the Opposition want to advocate. If one makes it compulsory to save for one’s old age … [Quorum.] If we are going to have the alternative system and not this motion that we are discussing, it will simply become a political plaything in South Africa. It will become the political toy of the various political parties at every election and the National Party is not prepared to allow that to happen. We would rather be criticized than allow that to happen. This alternative system of a compulsory State-aided scheme is also far too expensive administratively. Under a scheme of this nature we will not be able to assure our workers of a good standard of living.

Order! The hon. member is now discussing the alternative scheme. The hon. member must discuss the motion.

If we carry out this scheme we are going to find that by means of voluntary savings, because the people will be saving voluntarily, they will be able to save sufficient to be assured of a good standard of living in their old age.

Mr. Speaker, we must also consider the form of government that we have to-day. We have a capitalist form of government and not a socialist form of government. If we want to continue as a capitalist State we cannot bring schemes into being which will tend to bring about or actually bring about a socialist form or pattern of government. Under our form of government the position is that we want to restrict the freedom of the individual as little as possible. We do not want to interfere with his freedom of trade, speech, religion and so forth. The purpose of this scheme, Sir, is also to ensure that our people introduce voluntary pension schemes under these industrial council agreements in order by so doing to create some security for themselves in their old age.

Mr. Speaker, I want to stress the following point briefly. If we put this alternative system into practice, we are going to have Socialism in our country, and Socialism is actually the first step towards Communism. The Opposition are swinging away from capitalism towards socialism which is the first step towards Communism. That is why it is vitally important for us in South Africa to-day, in dealing with these pension schemes, to ensure that we encourage the workers of South Africa to move in this direction voluntarily, to save voluntarily, and to join a pension scheme voluntarily.

Because you will not permit me to discuss the alternative system, Mr. Speaker, I just want to say this in conclusion. To-day we have 95 industrial agreements involving 565,906 persons. There are 19 agreements covered by provident or pension schemes, according to the latest figures of the Department of Labour, and of these … [Quorum.] I just want to repeat that 565,906 persons are covered by 95 industrial agreements and that there are 155,897 persons covered by provident or pension schemes. We have only 19 provident and pension schemes and this number is not adequate. We must ensure that sound pension schemes are brought into being, schemes which will be properly controlled by the Registrar of Pension Funds.

We have recently found in the case of certain institutions in South Africa that there are certain persons who try to exploit and, one might almost say, rob them. We must ensure that the worker in South Africa who works hard and who earns his bread by the sweat of his brow, puts something aside at an early stage for his old age by way of pension schemes, and that these schemes are properly controlled. At the moment I must say that we can rest assured that these 19 schemes that I mentioned are properly supervised and properly controlled. But we do not know whether the other schemes are as sound as they ought to be. I do not say that they are unsound, but we do not know whether that is the case or not. Apart from that, Mr. Speaker, although we do not want the State to make it compulsory for every employee to belong to a pension scheme, we want in any case to ensure that it is made compulsory for all schemes to be properly controlled so that when a person reaches retiring age he will receive what is his due to him, what he is entitled to, so that he will not suffer as a result of a deficit in that fund because something went wrong and the scheme became insolvent.

If we in South Africa are not going to have these voluntary contributions, we are further going to undermine the spirit of our people. They will then retain the idea that when they are old the State must pay them an old-age pension. That is detrimental to and destructive of the spirit and character of the citizens of the country. If we do not educate these people timeously, as the previous speaker said, we will have the position in this world, which is becoming more and more corrupt in certain respects, that the people of South Africa who are to-day so fundamentally sound, will also become corrupted in the years which lie ahead. By doing educational work and avoiding corruption, the time will come when our people will be proud to be called South Africans.

In the first place I propose to confine myself to the motion as it reads. I am sorry for the Opposition that they did not have the ingenuity to frame an amendment to this motion if they wanted an opportunity of discussing their national pension contributory compulsory scheme.

That would have been out of order.

My hon. friend, the Chief Whip, did not hear what I said when I started. I said that I was sorry they did not have the ingenuity …

You try.

It is not necessary for me to do so.

We are not contemptuous of the Rules.

Mr. Speaker would say whether you were contemptuous of the Rules or not. What I say, Sir, is this that if the Opposition had wanted the opportunity to propound their policy of a national contributory compulsory scheme they may have had the opportunity to do so. [Interjections.] I think the hon. member for Umhlatuzana (Mr. Eaton), in the course of his speech, said that perhaps some member on this side of the House could frame an amendment. All I propose to do is to discuss, as I have said, the motion as it stands.

You have prepared the wrong speech.

The hon. member will find when I have spoken that that is not so. I want to deal, in the first instance, with one or two points which the mover of the motion made. He made the point that the Government should consider including in the Pensions Fund Act a provision making it compulsory for any industrial agreements to come under the purview of that Act.

Provided they have a pension scheme.

Yes, provided that they have a pension scheme. According to the record I find that when the Pensions Fund Act was passed, No. 24 of 1956, there was a special exemption in regard to these schemes under the Industrial Conciliation Act. Section 2 states—

That is the law as it stands. I personally am not convinced that that law should be changed. I believe that the administration of the provisions of the Industrial Conciliation Act in regard to pension funds has been quite satisfactory. I may tell the hon. the mover, in reply to another point he made, viz. the question of liaison between the Department of Labour and the Registrar of Pension Funds, that there is the closest collaboration between the Department and the Registrar.

The second point that I just want to dispose of is the other suggestion made by the mover that the Wage Board should include provisions for pension schemes in wage determinations. I want to tell the hon. member that I think that suggestion is quite impractical because, as hon. members know, the Wage Board deals principally with unorganized industry. These unorganized industries often have no trade unions and sometimes they have no employers’ organizations. I think the hon. the mover will agree with me when I say that pension schemes can really only be applied to organized industries which have the administrative machinery to deal with such schemes.

I think I must now deal with the motion as it stands which I might tell hon. members I am going to accept. They will probably be quite glad to hear that. The motion reads—

If we look at private industry we find that there are 96 industrial councils spread throughout the country to-day and there are no fewer than 47 of them which operate either pension schemes or sick or provident funds. In some cases they operate all these projects together. These 96 industrial councils cater for just over 260,000 White, Coloured and Asiatic workers. The total number who stand to benefit from the various funds is about 200,000, i.e. just over 75 per cent. In addition, Mr. Speaker, there are 55,000 Bantu workers who will also benefit under these schemes. I think hon. members will agree with me that this is quite a praiseworthy effort. It may also be of interest to hon. members to know that the first fund of this kind in industry was established in 1921 and the second in 1930. It was not until 1946 that there has been annual additions to the list. For the past ten years the figure has been growing by 4.7 per cent per annum, until today we have a total of 73 of such industrial council schemes.

But, Sir, that is not all. I have only mentioned so far the Industrial Council funds. The Registrar of Pensions informs me that there are 3,713 private pension funds registered in his books. Of these no less than 1,000 have been registered since 1958, that was when the Act came into operation, representing an increase in the assets of these funds of more than R137,000,000.

There is, of course, in our country an obvious awareness and particularly a growing awareness in industry of the necessity of making provision for the workers. I am confident that the great majority of our workers will in due course reap the benefit of a private provident and pension fund. As their numbers grow naturally the necessity for a State-aided contributory scheme will diminish. Private schemes, as hon. members know, have the advantage that they serve the important purposes of self-care and self-support thereby creating a sense of independence and self-respect in the individual, eliminating the moralizing tendency of always having to look to others for assistance. In other words, it preserves their independence.

I now want to deal shortly with the motion which I have read to the House. I personally am glad, despite the criticism from the Opposition as to the wording of this motion, that it is worded in this way, namely, that the Government should urge the Industrial Council to make provision for pension funds. The motion, perhaps, could easily have asked the Government to insist on the introduction of such schemes, i.e. to make it compulsory, in which case we would have been placed in a very difficult position. Mr. Speaker, as hon. members know, industrial councils are bodies corporate and as such they manage their own affairs. The members of the industrial councils represent both employers and employees and there is nothing to prevent the employees from making demands in respect of a pension fund. In fact, our experience is that they do so whenever they feel that they are entitled to some improvement in their working conditions, be it a matter of wages or hours of work or annual leave. They have at their disposal, as the law stands, the necessary machinery to force the employer to accede to their demands, provided, of course these demands are reasonable. Fortunately for us in South Africa the majority of our trade union leaders are responsible people and while they are always pressing for improved conditions of employment which, of course, is one of their prime functions, they know when and where to call a halt. That is one of the main reasons, I think, why we have enjoyed such a long period of industrial peace in this country.

It follows, therefore, that where workers in an industry, without any pension or provident facilities, feel that the industry is strong enough to stand the impact of a worthwhile pension scheme and that they themselves can afford to make the necessary contribution, they have the necessary means at their disposal to make their demands.

Section 24 of the Industrial Conciliation Act specifically states that an agreement may make provision for the establishment of a pension fund. Now as hon. members also know an agreement only acquires the force of law after the Minister has approved of its publication in the Government Gazette. These agreements usually contain a variety of provisions for the benefit and the protection of the employees in the ordinary course of their work. If I were to refuse to publish an agreement merely because it did not provide for a pension fund scheme, it would be a serious matter because the workers would be deprived of the benefits and the protection which they would otherwise have enjoyed.

The establishment of a pension or a provident fund is not something, as we know, which can be decided upon on the spur of the moment. There are numerous important factors which have to be considered. These are shortly, the size and the stability of the industry, the number of workers who will be affected, whether the nature of their work is such as to afford more or less permanent employment, whether the scheme will be sufficiently sound from an actuarial point of view and so on. Obviously if it is an industry where there is a substantial turn-over of staff, for instance, the scheme will be doomed to failure right at the start. And if the number of permanent workers is small, as the hon. mover showed in a particular case, their subscriptions may have to be so high as to make the scheme completely ineffective or unsuccessful, and it is doomed to failure. The hon. mover gave an example of such a case that took place in Bloemfontein some years ago. If the factors which I have mentioned are not favourable, an industry is not likely to get any assistance from the underwriters in respect of their scheme, and it may not be able to finance such a scheme from its own resources. Again if an industry is unwilling or unable to establish a fund voluntarily, but under threat of non-publication of an agreement is forced to do so by the Minister, the onus could be thrown on my Department not only to negotiate suitable and acceptable terms for the underwriters of the scheme, but also to administer the fund, which of course would be a practical impossibility.

Mr. Speaker, I mention these matters, merely to show the establishment of a pension or a provident fund is not as easy as it looks. Nevertheless, I am satisfied that as our industrial expansion continues and there is competition for the right type of workman, and that competition increases, employers will be obliged to offer better and better facilities, in order to attract and to hold the best quality of workers. Towards this end the employer with the best offer is obviously bound to get the best man, and I can hardly think of a more attractive condition of employment as to ensure security for the worker’s old age. Mr. Speaker, while there may be some industrial councils, however, which by virtue of their size or their youth may not yet be in a position to embark upon their own pension schemes, I am satisfied that there are some which can now start contemplating the introduction of some sort of pension scheme, and I want to give the House the assurance that where I consider it possible, or practicable, industrial councils will be urged to establish such schemes, for their workers. In other words, there will be a full investigation in every case where an industrial agreement is submitted, and if I, or the Minister concerned, is satisfied that the industry can carry such a scheme, I will not hesitate to urge upon that industry that it should introduce such a scheme.

Mr. Speaker, the hon. mover also in the course of his speech raised the question as to what would happen to pension funds which have been established under industrial agreements upon expiration of those agreements entered into by the parties to such councils. Now in the normal course of events, the position is of course that only the larger and well-established industrial councils make provision for benevolent or pension schemes and whereas ordinary agreements which control wages and hours of work, etc., are usually entered into for a period of about three years, it is customary to publish pension fund agreements for a period of five years. Experience has shown us that industrial councils are very particular about such agreements, and while it has happened in the past that parties to councils have not been able to negotiate fresh agreements on the score of wages, and so on, and there was accordingly a break in wage regulation, I cannot find any record of any occasion where an industrial council failed to apply in good time for the renewal of an existing provident or pension fund agreement or for its replacement by a new agreement. Although it is possible for a pension fund agreement to lapse altogether before its expiration, it is most unlikely to happen. But should it occur, then the parties to the agreement are amply covered as far as their funds are concerned, as the hon. member knows. Section 34 of the Industrial Conciliation Act states specifically that pension funds do not form part of an industrial council’s general funds, and that the assets of pension funds shall upon the expiration of the agreement be disposed of in accordance with the provisions of the constitution or the agreement under which they are established, or if the constitution or agreement does not contain any provision in regard thereto, then the assets must be disposed of in accordance with the directions of the Industrial Registrar.

It is for this reason that my Department has for many years now insisted upon the inclusion in benevolent or pension fund agreements of special machinery to meet such contingencies in the form of management committees which operate of course according to the approved rules. These committees are not only responsible for administering the funds normally, but also for their winding up and their liquidation in the event of their dissolution, In other words the management’s committees go on. It does not necessarily follow, of course, that such funds automatically come to a standstill upon the expiration of an agreement. I find that the Provident Agreement for the clothing industry in Natal for instance provides that where the agreement expires, the Management Committee shall continue to administer the fund for a period of two years, and the fund shall only be liquidated after that period if no agreement has been negotiated in the meantime. It provides further that when it does become necessary to dissolve the fund, the assets shall be liquidated and paid into the general fund of the Industrial Council, and if the Industrial Council has already been wound up, the funds shall be distributed as in the case of an industrial council which is to be wound up. While it is a pity that the benefits payable to individual employees under such pensions or benevolent funds should come to an end in certain circumstances, it is nevertheless some consolation to know that the parties to a fund do not forfeit their contributions altogether, and that wherever an industrial council is wound up, at least two-thirds of the assets are refunded to them. The remaining amount is deposited with the public debt commissioners and can be paid over to any similar fund which may be established within two years. If it is not so paid over, it is surrendered to the Consolidated Revenue Fund.

I think I have indicated in the time at my disposal what the general machinery is in regard to these industrial agreements which include pension schemes, and as I said, when I started, I can give the House the assurance that my Department after full investigation will urge upon the industrial councils to include pension schemes for their workers. Therefore I accept the motion of the hon. member. I now want to move—

I second.

Agreed to; debate adjourned.