The Azanian People’s Organisation (AZAPO) has slammed President Cyril Ramaphosa’s decision to sign into law, the Pension Funds Amendment Bill, which amends pension-related legislation to allow for the implementation of the recently legislated two-pot retirement system geared towards bolstering retirement savings.
According to reports, the requirements for the two-pot retirement system are set to take effect from September 1 following Ramaphosa’s decision to sign the Pension Funds Amendment Bill into law on Sunday.
The new Pension Funds Amendment Act amends the Pension Funds Act of 1956, the Post and Telecommunications-Related Matters Act of 1958, the Transnet Pension Fund Act of 1990, and the Government Employees Pension Law of 1996.
This recently amended law provides for the introduction of the savings withdrawal benefit; the appropriate account of a member’s interest in the savings; retirement and vested components, and the deductions that may be made.
According to the president’s office, the Act also requires pension funds to amend their rules, adjust their investment portfolios and prepare administrative systems for pension fund members to apply to access portions of their pension funds from September 1.
Reacting to the decision by Ramaphosa to sign this Bill into law, AZAPO said while the reasons to allow this amendment to be plausible, the amendment will affect workers and their pensions negatively.
“The Pension Amendment Act is nothing but a pacifier and a moment’s pleasure at the expense of everlasting treasure. Workers who access the portion of their pension now will soon realise when the time for retirement comes that they have nothing to fall back on and may be forced to continue working to make ends meet.
“Whatever challenges workers face must be addressed through decent salaries and better benefits that include safe working conditions. It is criminal for employers to reap maximum profits and favourable tax concessions whilst workers are forced to tighten their belts,” AZAPO.
On Tuesday, Independent Media also reported that the South African Federation of Trade Unions (SAFTU) also did not approve of the two-pot retirement system.
The federation said the system could have been progressive if it were not for the rules applicable to the second pot, which only allows workers to access their money on retirement.
Saftu spokesperson, Trevor Shaku, said the fact that workers would be able to access a portion of their pension savings would provide much-needed relief under the financial hardships facing workers.
“This can help individuals to address their immediate financial needs, such as medical expenses, education costs, or debt repayment, without jeopardising their long-term financial security. The retirement pot, on the other hand, will preserve two-thirds of the contributions made to a pension fund,” he said.
The Star