The Congress of South African Trade Unions (COSATU) welcomes Treasury’s release of two Retirement Reform Discussion Papers for public comment. The release of these papers is a response to COSATU’s May 2020 call to allow financially distressed and highly indebted workers some access to their pension funds.
These Discussion Papers were developed after extensive engagements between Treasury, COSATU and Organised Labour and they represent a positive step forward in making the goal of allowing distressed workers some access to their pension funds possible.
It is important that workers who are struggling financially are permitted some limited relief from their pension funds. This will help them to survive and take care of their families and it will also help reduce the temptation by workers to resign from their jobs to cash out their entire pension funds as the law currently permits.
The Discussion Papers contain useful proposals to provide workers some relief whilst also seeking ways to incentivise them to save for when they retire. It is critical that the intended relief is given to both the private and public sector employees.
The economy is bogged down in the deepest recession in living memory and many workers are struggling to keep up with the cost of living and their debt payments.
It is also important that we find means to incentivise and encourage workers to save for when they retire. Currently only 6% of workers can afford to retire, and these forces millions of retired workers to depend on the state or their relatives for survival.
The Federation will be engaging its affiliated unions and members in general on how to approach these discussions in a responsible and efficient manner.
We look forward to engaging on the Discussion Papers at Nedlac and they’re being drafted into an Amendment Bill(s). It is critical these Amendment Bill(s) be tabled at Parliament by April 2022 to ensure that Parliament can pass these into law by the end of 2022 and that they come into effect by the beginning of 2023. Workers simply cannot afford any further delays.
Issued by COSATU
For further information please contact: Matthew Parks– COSATU Parliamentary Coordinator- Cell: 082 785 0687 Email: firstname.lastname@example.org