COSATU celebrates Parliament’s historic passage of the Pension Funds Amendment Bill (Two Pot Pension Reforms)

The Congress of South African Trade Unions (COSATU) celebrates Parliament’s historic passage of the Pension Funds Amendment (PFA) Bill, one of two progressive amendment bills that will enable the long sought Two Pot Pension Reforms to take place on 1 September 2024.  The PFA Bill which was amended by the NCOP, will now go to the President, Cyril Ramaphosa for assent.

The other Bill, the Revenue Laws Amendment Bill, has already been adopted by both Houses of Parliament.

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, that not only have we reached consensus on the key matters but legislation providing for the reforms has been adopted by Parliament and there is agreement between government, Parliament, COSATU and the pension funds for implementation on 1 September 2024. 

We welcome the continuous support we have received from Members of Parliament, in particular from the African National Congress and the Chairpersons of the Parliamentary Committees on Finance, Joe Maswangayi and Yunus Carrim as well as the Minister and Deputy Minister for Finance, Enoch Godongwana and David Masondo.  Without a doubt, workers have a firm and reliable ally in the ANC.

Workers are highly indebted due to slow economic growth, the rising costs of living and having to support relatives in an economy 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 and fair balance 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.

COSATU welcomes critical amendments made to the Bill by Parliament to ensure all workers, public and private sector, are included in the Two Pot PensionReforms. 

What is critical now is for Parliament to ensure the President receives the Bills as a matter of priority enabling him to assent to them shortly.  This will then allow 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 measures for workers seeking this relief.

We are confident we are on track and all deadlines will be met to ensure implementation on 1 September 2024.  Workers have been waiting for this relief since 2020.  We will not disappoint them.

Issued by COSATU.

For further comment please contact:

Matthew Parks

Acting National Spokesperson & Parliamentary Coordinator

Cell: 082 785 0687