COSATU welcomes progress at Parliament on the Pension Fund Amendment Bill (Two Pot Pension Reforms)
12 March 2024
The Congress of South African Trade Unions (COSATU) welcomes progress at Parliament on the Pension Fund Amendment Bill, which is one of two critical legislative amendments that will enable the long sought Two Pot Pension Reforms to take place on 1 September 2024.
COSATU has been engaging on the Two Pot Pension Reforms with Treasury and Parliament since May 2020. We are pleased that whilst we may not have achieved everything we proposed, that not only have we managed to find consensus on the key matters but legislation providing for it is before Parliament and there is agreement for implementation to happen on 1 September 2024.
Workers are highly indebted due to slow economic growth rates, the rising costs of living and having to support relatives in a society battling a 41% unemployment rate. The current pension laws are excessively inflexible only allowing workers access to their pension funds upon retirement, losing their job or resignation. Consequently, many workers opt to resign to cash out their entire pension funds leaving them unemployed and with no savings left.
The Two Pot Reforms provide a progressive compromise where workers will have access to a portion of their pension funds whilst remaining employed. This will allow workers to access 10% up to R30 000 of their existing savings when the law comes into effect on 1 September 2024 and from then on once a year, access to a third of future savings. Workers will retain access to existing savings. These will enable workers to remain employed, receive the equivalent of a thirteenth cheque on 1 September and once a year going forward and have more savings when they retire.
Whilst COSATU supports the Pension Amendment Bill currently before the National Assembly, it is critical that as agreed with Treasury and Parliament, it be amended to ensure that the Government Employees, Transnet, Post and Telecommunications Pension Funds are included in the Two Pot Reforms and their members enjoy the same access. This must be done now and not deferred to a later date.
The Federation notes proposed amendments by industry to the Bill and that these are fair and where needed, should be incorporated. What is most important is that all amendments to the Bill be fast tracked to ensure both Houses of Parliament can adopt the Bill before rising in April for the May elections. If needs be, Parliament should delay its adjournment to ensure this important Bill is passed before the 2024 elections. This is critical to enable the President to then sign, Treasury to promulgate, SARS to adjust its tax systems and the pension funds to amend their rules and put in place the necessary education and administrative support for workers seeking this relief.
What we cannot afford are any delays to the 1st of September 2024 implementation date. Workers have been waiting for this relief since 2020. We dare not disappoint them.
Issued by Matthew Parks, Acting National Spokesperson, COSATU, 12 March 2024
