Cape Town - Cosatu has welcomed the release of the draft bills for public comment that will allow workers early access to pension funds effective from March 1 next year.
The Draft Revenue Laws Amendment Bill, and the Draft Revenue Administration and Pension Laws Amendment Bill by Treasury, will allow workers the ability to access a limited portion of their pension funds without having to resign from their jobs or cash out their entire pension funds.
The provisions will be binding upon all pension funds, public and private, with all pension funds being required to restructure into a new two pot pension regime.
One third of the pension funds will be deposited into a savings account that workers can access once a year, and another two thirds will be deposited into a preservation account that workers can access in the event that they are retrenched or when they retire.
According to the bills, workers will retain access to their existing funds that were accumulated up to March 2024 in the event of retrenchment, dismissal or resignation.
Cosatu parliamentary co-ordinator Matthew Parks said the release of the bills was a positive agreement and in line with the majority of demands that Cosatu tabled with the National Treasury.
“They will provide relief, including immediate relief, to millions of struggling workers in both the public and private sectors.
“They will provide workers a better alternative to resignation when they are drowning in debt or confronted with a financial emergency and need to access part of their pension funds,” he said.
Parks noted that there were some areas that needed further engagements and refinements with the National Treasury.
He mentioned the 10% cap up to R25 000 from existing savings that could be accessed in March 2024.
“Ideally this should be raised to 30% or R50 000 for example to make it more substantive.
“Second is to ensure that workers who are dismissed and not only retrenched are also included in the category of workers who have access to their preservation pot for future post 1 March 2024 savings.
“Third is what could constitute a fair compromise for workers who are forced to resign to take care of seriously ill relatives or if the family is required to relocate to a different province.
“This will need further thought on the practicalities of this,” he said.
Parks said the National Treasury has committed to further pension reforms engagements in a second phase bill.
The bill will be submitted to Parliament for consideration in August once public comments have been taken into account.
The plan is to have the bills processed and adopted by the end of November.
Once sent for assent by President Cyril Ramaphosa, the SA Revenue Service (Sars) will need to adjust its taxation systems.
Parks said it was critical that the March 2024 implementation date was retained as workers were struggling and have been looking forward to the relief.
“Cosatu will continue to work with the Treasury, Parliament and the Presidency to ensure this relief reaches workers and 1 March 2024 is maintained,” he added.
Cape Times