Editorial Note: This story has been corrected to better clarify the two-pot retirement system Bill proposal. SABC News incorrectly implied that the Bill was passed.
The Congress of South African Trade Unions (COSATU) has welcomed the decision by Parliament’s Standing Committee on Finance to adopt proposed legislation that would give retirement members access to a portion of their funds, through a proposed two-pot system.
If passed by both Houses of Parliament and signed into law by the President, members of the fund would be able to withdraw one-third of their savings from March 1, 2024. Two-thirds will be kept in another pot, until retirement.
Despite National Treasury’s proposal to further postpone the implementation to 2025, the parliamentary committee responsible for the Bill decided that it should not be delayed any further.
COSATU spokesperson Matthew Parks acknowledged that there is still much work to be done before the implementation date, but he emphasised that the new system will provide much-needed relief to workers struggling with debt.
Two-Pot Retirement System explained:
“Parliament needs to pass the legislation before the recess in a few weeks’ time. The President needs to sign it, there needs to be regulations promulgated by Treasury, the South African Revenue Service (SARS) must put in some system adjustments, and the pension funds too must also put in place their work,” says Parks.
He adds that despite the tight timeline, the two-pot retirement system is a necessary and popular measure that will help preserve pension funds in the long term while providing workers with limited access to their savings when they need it most.
Below is Parks’ full interview on SAFm’s Sunrise programme: