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.