The Congress of South African Trade Unions (COSATU) welcomes progress made in preparation for the 1 September two-pot pension reforms implementation.  The Federation is pleased our struggles over the past five years are finally coming to fruition.

Millions of workers have been waiting for this day and are looking forward to being able to access a limited portion of their pension funds on 1 September when they can access 10% up to R30 000 and a third of future savings once a year. 

Negotiations inevitably involve a give and take and compromises.  Whilst COSATU was not able to achieve everything we had hoped for, we are pleased that the majority of our demands were secured. 

Workers from 1 September will no longer need to resign from their jobs in order to access some relief from their savings.  Workers will retain access to their existing savings as well as to a third of future savings.  This will for the first time provide workers choices, including accessing relief when in need whilst simultaneously boosting savings in the long term to reduce the number of workers retiring in poverty.

COSATU has been working closely with Parliament, Treasury, SARS, the Financial Sector Conduct Authority (FSCA) and the pension funds to ensure all systems are ready for 1 September.  Both legislative amendment acts have been passed and signed into law.  Pension funds and the FSCA are working around the clock to ensure their rules are amended and systems are in place to enable workers to apply for and receive their monies. 

We are however deeply angered by how some immoral pension funds have chosen to impose unjustifiable and shameful administrative feeds upon workers opting to withdraw their funds.  This is beyond scandalous.  COSATU has raised this sharply with the pension funds and their umbrella body as well as the FSCA to demand that these pension funds immediately reverse such attempts to profit at the expense of struggling workers.  The FSCA has equally appealed to pension funds to only charge reasonable administrative fees.  COSATU is engaging worker representatives on pension fund boards to similarly intervene with management.  We will also be tabling at Parliament the need to amend the law to enable government to set caps on the administrative fees that pension funds can charge.

This is the first round of reforms and the most significant in many years.  Engagements will soon commence with Treasury on further reforms.  COSATU has made proposals to Treasury to lower the tax burden on low-income workers, allow workers greater financial relief in future, enable workers access to their full savings in the event of losing their jobs and allow workers to utilise their pension funds to cover the costs of education.

These reforms provide workers for the first time choices on how their funds can be used to improve their lives.  They lay the foundation for further reforms that will help lift millions from poverty before and during retirement.

Issued by COSATU

Matthew Parks(COSATU Parliamentary Coordinator)
Cell: 082 785 0687
Email: matthew@cosatu.org.za