BL Premium reports that the National Treasury has proposed a “two-pot system” for withdrawals from pension funds, with one-third being accessible before retirement and two-thirds being locked into compulsory preservation for retirement.
The debate over access to retirement savings by those in distress advanced last week, with comments by Finance Minister Tito Mboweni on Wednesday that the matter had been “stuck in the system for too long”. He has instructed officials to act on it with haste. For more than a year, business, labour and the government have been in discussions in Nedlac on a proposal to allow withdrawals due to hardship brought about by Covid-19. But no draft amendment bill has emerged. Parliament has begun debating the issue in the form of a private member’s bill from Democratic Alliance (DA) MP Dion George, which is being discussed in the standing committee on finance. Treasury deputy director-general Ismail Momoniat said in an interview on Thursday: “The approach is for a limited system of withdrawals together with mandatory preservation. It will allow some form of withdrawal but then you will not be able to take out the rest of it before retirement. There has to be greater preservation.” Momoniat also said the Treasury wanted to make it compulsory for everyone who worked to contribute to retirement savings “including people such as Uber drivers and contract workers”.
- Read the full original of the report in the above regard by Carol Paton at BusinessLive (paywall access only)
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