COSATU welcomes the National Assembly’s passage of the Revenue Laws Amendment Bill enabling the Two Pot Pension Reforms to come into effect on 1 September 2024

21 February 2024

The Congress of South African Trade Unions (COSATU) welcomes the National Assembly’s passage of the Revenue Laws Amendment Bill yesterday.  This is a key moment towards enabling the Two Pot Pension Reforms comes into effect on 1 September 2024.

It will provide comfort to millions of highly indebted workers who have justifiably grown sceptical and frustrated with the continuous delays in implementation and that the long sought Two Pot Pension Reforms will become a reality on 1 September.  To ensure this happens, it is critical that the National Council of Provinces move with speed to pass the Revenue Laws Amendment Bill and that both House of Parliament pass the Pension Funds Amendment Bill before rising for the 2024 national and provincial elections. 

Once Parliament has passed these laws, the President will need to assent to these Bills, the South African Revenue Service needs to adjust its tax systems and pension funds need to amend their rules and put in place the necessary education, customer assistance and funds to ensure a smooth implementation of the reforms on 1 September.

It is critical that Parliament, Treasury, the South African Revenue Service and the pension funds move with speed and surgical efficiency to ensure the remaining legislative and administrative steps are expedited to ensure no further delays occur.  The 1st of September 2024 must be the final date of implementation.  No further delays dare be entertained. 

The two pot pension reforms initiated by COSATU, will provide badly needed relief to millions of highly indebted workers, in both the private and public sectors, who will soon be able to access limited portions of their pensions without having to resign from their jobs nor cash out their entire funds.

These engagements have been taking place since COSATU first tabled them at Parliament in 2020.  Workers are drowning in debt due to a struggling economy, a 41% unemployment rate, rising costs of living, brutal repo rate hikes and callous employers who pay workers peanuts.  The current pension laws only allow workers access to their pension funds when they retire or in the event of losing their job or resigning.  Consequently, many workers opt to resign and cash out their entire pension funds leaving them to retire in poverty. 

The two pot reforms offer a positive balance where workers will be able to access 10% of their existing savings up to a maximum of R30 000 when the law comes into effect and from then on to access one third of their future annual contributions once a year.  They will no longer need to resign to have some access to their pension funds. 

Whilst these amounts will not be sufficient to settle home or car loans in most instances, they will be the equivalent of a thirteenth cheque for most workers and help settle short term debt and other urgent financial pressures.  Overtime these thirteenth cheque equivalents will help heal workers’ financial wounds.

These reforms will help boost savings in the longer term as workers will no longer be resigning to cash out their entire pension funds but will rather access their savings pot instead.

In order to ensure that this long-sought and badly needed relief takes place on 1 September 2024, Parliament must move with speed to conclude its remaining processes in the National Assembly and the National Council of Provinces in order to allow the President to assent to the Bill and for the remaining administrative processes to be undertaken by Treasury, SARS and the pension funds in time.  Workers cannot afford nor accept any further delays.

Issued by COSATU

For further information please contact:
Matthew Parks
Acting National Spokesperson & Parliamentary Coordinator
Cell: 082 785 0687