BL Premium reports that the Treasury was outflanked by ANC MPs on Wednesday over the possibility of salvaging a Democratic Alliance (DA) bill proposing that up to 75% of the value of pension fund savings could be used as security for loans.

The private member’s bill was tabled by DA MP Dion George in response to the dire situation faced by many poor workers as a result of the Covid-19 pandemic. Union federation Cosatu and the Federation of Trade Unions of SA (Fedusa) are in favour of the bill, but Treasury’s deputy director-general Ismail Momoniat is strongly opposed to it, saying it would undermine avings in a country with a very low savings rate. He pointed out that it would also increase the high levels of indebtedness as well as the contingent liabilities of pension funds. Momoniat noted that the Treasury was in negotiations at Nedlac on how to ensure the mandatory preservation of retirement funds and close the loophole that allowed workers to resign to access them, adding that there was room for limited withdrawals within that context. But in an unusual move for ANC MPs to oppose Treasury’s view, ANC MPs Noxolo Abraham and Kenny Morolong said a balanced approach should be adopted rather than the bill being dismissed outright given that there was some support for it and that it would help people. George said he was not prepared to withdraw the bill, but was willing to work on it to address the concerns raised. In his view, the Treasury was being “very insensitive to the plight of the people” and the Nedlac process on retirement reform was taking too long.

• Read the full original of the report in the above regard by Linda Ensor at BusinessLive (paywall access only)

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