The Congress of South African Trade Unions (COSATU) welcomes excellent progress in rolling out the long sought Two Pot Pension Reforms since 1 September.  We have been heartened by the response of workers to this long-sought reform with thousands submitting their applications for immediate relief from their pension and provident funds.

These pension reforms are amongst the largest and most transformational since the democratic breakthrough of 1994.  Funds are reporting unprecedented numbers of calls and applications.  Whilst some funds’ systems have been overwhelmed and even temporarily crashed, most have coped.  We appeal to members to be patient in such instances.  COSATU is working with the various funds to ensure their systems can cope and issues are addressed speedily.  Members should contact their funds and unions or COSATU when experiencing challenges so these can be resolved.

We are pleased that many workers have already received their immediate relief and the efforts undertaken by funds and the South African Revenue Service to expedite claims. 

COSATU is dismayed by reports of some callous funds having yet to amend their rules to allow workers to access their relief.  We are intervening with Treasury, the Financial Sector Conduct Authority and these funds to ensure this unacceptable behaviour is dealt with and those workers can exercise their legal right to access relief from their funds. 

Whilst welcoming the Two Pot Pension Reforms and the relief of 10% up to R30 000 are bringing to millions of workers, as well as access to a third of future savings for workers when in need, COSATU has submitted proposals for the next round of reforms to Treasury to provide further relief to workers and their families.  These include granting access for further relief to workers from their existing savings, reducing the tax burden on low-income workers, ensuring workers retain full access to all their savings when losing their jobs and enabling workers to use their pension funds for education fees.

The Federation appreciates that whilst we were not able to achieve all of our demands in the first round of pension fund reforms, workers are for the first time able to access a portion of their savings without having to resign from their jobs or cash out their entire savings.  Simultaneously whilst workers are provided access to relief once a tax year, higher rates of savings will be achieved in the long term as workers will now have an alternative to resignations and depleting all their savings.

These hard-won reforms are the first step of a journey to place workers’ needs at the centre of this discussion and to ensure that pension and provident funds support workers during their careers and in retirement.  As with any transformational change improving the lives of millions, there will be critics and confusion on social media.  These will be resolved as this change filters down to millions of struggling and highly indebted workers.  COSATU will continue to engage Treasury and funds to ensure workers’ concerns are addressed.

Issued by COSATU

For further information please contact:

Matthew Parks(COSATU Parliamentary Coordinator)

Cell: 082 785 0687

Email: matthew@cosatu.org.za