COSATU statement correcting inaccurate media article predicting delays in implementation of the Two Pot Pension Reforms appearing in this weekend’s City Press
25 March 2024
The Congress of South African Trade Unions (COSATU) notes with disappointment a substantially inaccurate article in this weekend’s City Press predicting delays in Parliament passing the Two Pot Pension Reforms legislation and their subsequent coming into effect on 1 September 2024.
The Federation assures its members and workers at large, as well as pension funds, that the article is woefully ill informed, and that Parliament will soon pass the two Amendment Bills and the implementation date of 1 September 2024 remains on track. It is a pity that the columnist chose to write an article of such sensitivity to workers and make unfounded predictions. The author would have done well to contact COSATU, Treasury or Parliament who have collectively with industry, worked on processing the Bills to enquire if such a prediction of a postponement is likely. She would have been assured that it is not.
Treasury has tabled two Bills providing for the Two Pot Pension Reforms, namely the Revenue Laws Amendment Bill and the Pension Fund Amendment Bill, at Parliament. The Revenue Laws Amendment Bill was adopted by the National Assembly on 21 February and is due to be passed on 26 February by the National Council of Provinces (NCOP). The Pension Fund Amendment Bill was amended and adopted by the Standing Committee: Finance on 22 March and is due to be passed by the National Assembly on 27 March. It will then go to the NCOP for concurrence and is scheduled to be adopted by the second week of April and before rising for the May 29th elections.
The Bills will then be submitted to the President for assent. Once this has been done, Treasury will promulgate the Bills. These steps will enable the South African Revenue Service to adjust its tax systems as well as the pension funds to amend their rules accordingly in coordination with the Financial Sector Conduct Authority.
These are the time frames and road map agreed to between Parliament, Treasury, COSATU and industry. We have made excellent progress in processing the Bills through Parliament and will soon be done. This will allow government and the pension funds to roll out implementation from 1 September.
We are pleased that the Two Pot Pension Reforms first tabled by COSATU in May 2020, have managed to secure support from and achieve consensus with Treasury and Parliament, Members of Parliament from the African National Congress and other political parties as well as the pension funds themselves.
Workers are looking forward to the implementation of the Two Pot Pension Reforms on 1 September as these will provide relief to workers without having to resign from their jobs as the law currently requires. Workers from 1 September will be able to immediately access 10% up to R30 000 from existing savings, retain access to savings accumulated by 1 September and have access to a third of future savings once a year. Whilst these may not, in most circumstances, be enough to settle large debts like home or car loans, they will be the equivalent of 13th cheques and can be used to ease the financial hardships of workers by settling credit card and short-term debt, home or car repairs, medical bills and school fees. Overtime they will help heal workers’ financial pains whilst boosting savings and reducing the number of workers retiring in absolute poverty and offer workers an alternative to resigning.
Whilst COSATU is pleased with the positive progress made, much remains to be done. We are confident that we are on track to achieve the 1 September 2024 implementation date. Workers have waited for this relief since 2020. We simply cannot afford to delay this long-sought relief any further.
Issued by Matthew Parks, Acting National Spokesperson & Parliamentary Coordinator, 25 March 2024
