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BusinessLive reports that on Tuesday parliament’s finance committee proceeded with consideration of a DA-proposed bill, notwithstanding Treasury’s undertaking that a pension fund reform bill would be released for public comment later in 2021.
The DA bill would allow for loans to be taken out against a guarantee provided by a pension fund. Chair Joe Maswanganyi stressed that the committee had to strictly stick to the legislative procedure in processing a bill proposed by DA MP Dion George, to avoid a possible legal challenge. The committee has already held public hearings on the Pension Fund Amendment Bill. As proposed by Cosatu, George agreed to amend his bill to reduce the permissible maximum amount of a loan guaranteed by a member’s pension fund assets from 75% to 30% of the assets. Cosatu supported the principle of pension-fund members being able to borrow against their pension funds to assist them in a situation of financial crisis precipitated by the Covid-19 pandemic, but believed a 75% limit would result in the depletion of funds. Another amendment proposed by George was that only one loan per member would be allowed. Treasury deputy director-general Ismail Momoniat expressed strong opposition to George’s “seriously flawed” bill, which he said failed to consider the tax implications, lacked technical detail and failed to take into account that the fundamental objective of retirement funds was to get people to save for their retirement. Momoniat said the Treasury was “pretty confident” that its bill on pension fund reform could be released for comment at the same time as the medium-term budget policy statement later in 2021.
- Read the full original of the report in the above regard by Linda Ensor at BusinessLive
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