COSATU applauds Parliament’s passage of the Revenue Laws Amendment Bill (Two Pot Pension Reforms bill)

The Congress of South African Trade Unions (COSATU) applauds excellent progress at Parliament with the National Council of Provinces’ unanimous adoption of the Revenue Laws Amendment Bill today.  The Bill is one of two critical amendment bills (the other being the Pension Funds Amendment Bill) that will enable the long sought Two Pot Pension Reforms to take place on 1 September 2024. 

The Federation is encouraged by the firm commitment by Parliament and the African National Congress and other Members of Parliament that both Bills will be enacted into law before the May 29 elections to ensure the Two Pot Reforms come into effect 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, not only have we found 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 cost 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.

It is critical both Bills are adopted Parliament before rising in April and assented to by the President before the May 29th elections.  Parliamentary passage is key to enabling the President to sign, Treasury to promulgate, SARS to adjust its tax systems and the pension funds to amend their rules and put in place the necessary education and administrative support for workers seeking this relief.

What workers cannot afford are any delays to the 1st of September 2024 implementation date.  Workers have been waiting for this relief since 2020.  We are confident we will meet all deadlines.

Issued by COSATU.

For further comment please contact:

Matthew Parks

Acting National Spokesperson & Parliamentary Coordinator

Cell: 082 785 0687