The Congress of South African Trade Unions (COSATU) welcomes the excellent progress rolling out the long sought Two-Pot Pension Reforms since 1 September last year.  We have been heartened by the response of workers to these progressive reforms with millions submitting their applications for relief from their pension and provident funds.  We are pleased that over R57 billion has been paid to more than 3.5 million workers. 

These pension fund reforms are amongst the most transformational since the democratic breakthrough of 1994.  Funds reported unprecedented numbers of calls and applications from workers.  Whilst some funds’ systems were initially overwhelmed, most coped well with COSATU and its Affiliates intervening where workers experienced challenges. 

COSATU has been deeply angered by over 7700 employers who through this process of providing relief to workers, have been exposed for having failed to pay workers’ pension contributions.  The largest numbers of such cases have been reported in the municipal, security and cleaning sectors.  This is fraud and theft and must be dealt with by law enforcement.  COSATU with Treasury and the Financial Sector Conduct Authority continues to intervene with such delinquent employers to ensure this criminality is dealt with.

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

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 able to access 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 of their funds.

COSATU applauds the steadfast support we received from our allies, the African National Congress and the South African Communist Party, in government and Parliament during these processes.

These hard-won reforms are the first step of a journey to place workers’ needs at the centre of this discussion and to ensure 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 challenges and no shortage of confusion on social media.  These will dissipate as these reforms reach millions of struggling and highly indebted workers.  COSATU will continue to engage Treasury, Parliament and pension funds to ensure workers’ needs are addressed.

Issued by COSATU

Matthew Parks(COSATU Parliamentary Coordinator)

Mobile: 082 785 0687

Email: matthew@cosatu.org.za