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BL Premium reports that workers in financial distress hoping for early access to a portion of their retirement savings while still employed won't be able to do so until at least 2022.
In a statement on Wednesday that sought to clarify a proposal to allow partial pre-retirement access to pensions during emergencies or extraordinary circumstances, Treasury also said that the Government Employees Pension Fund (GEPF) would be excluded from the proposal. But the exclusion of the GEPF, which will rule out its 1.2-million members who are mostly public servants, has been roundly condemned by labour federation Cosatu, which said that the proposed reform should apply to all workers “whether they are in the public service or the private sector”. The question of how to allow individuals early access to their money following the Covid-19 onslaught which saw millions of workers either lose their jobs or suffer pay cuts gained impetus after former finance minister Tito Mboweni said the Treasury was moving to expedite an issue that had been “stuck in the system for too long”. The Treasury has been working on overhauling the retirement savings framework to create “a two-bucket system” that will allow limited withdrawals, together with mandatory preservation — including preventing withdrawals when changing jobs as currently allowed — and wider coverage. The Treasury advised further on Wednesday: “Any consideration for early access will require legislative and fund rule amendments because the current law and policy prohibits any pre-retirement access to retirement savings unless an employee resigns or is retrenched. It is expected that the earliest that any changes would become effective for a new withdrawal mechanism is 2022.” It added that “redesigning the retirement system to allow for limited withdrawals with mandatory preservation is complex and requires thorough consultations.”
- Read the full original of the report in the above regard by Lynley Donnelly at BusinessLive (paywall access only)
- Read too, Treasury reiterates retirement savings withdrawal considerations, legal requirements, at Engineering News
Get other news reports at the SA Labour News home page