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Business Report writes that pension fund legislation is expected to take the centre stage in the Medium-Term Budget Policy Statement (MTBPS), which will be tabled on 4 November.
The MTBPS will set out the policy framework for the February Budget, update National Treasury's economic forecasts, and adjust the budgets of government departments. Alexander Forbes chief economist Isaah Mhlanga on Friday said that over and above the realities of the constrained fiscus over the medium term, “we expect a clarification of the social security and pension fund reforms, which the National Treasury has been championing for many years”. The Treasury has already rejected a number of proposals in the Pension Fund Amendment Bill of 2020, which proposed to allow workers to access a portion of their retirement savings immediately. Treasury has so far preferred an arrangement that would allow people to make withdrawals from pension funds with a limit of a third, or up to 20 percent, under certain conditions, in three to five years. Finance Minister Enoch Godongwane is set to announce the pension reforms after the Treasury proposed a “two pot” system that would allow small withdrawals while having preservations. “The two-pot system, which was suggested just before the now withdrawn Green Paper from the Department of Social Development is a sensible one that can increase savings, preservations while providing access to a portion of savings to deal with short-term economic shocks such as Covid-19,” Mhlanga commented.
- Read the full original of the report in the above regard by Siphelele Dludla at Personal Finance
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