The finance minister will table a bill in November to allow struggling or highly-indebted workers to have access to up to a third of their pension funds by next year.
JOHANNESBURG – Finance Minister Enoch Godongwana will table a bill in November to allow struggling or highly-indebted workers to have access to up to a third of their pension funds by next year.
Cosatu general-secretary Bheki Ntshalintshali told delegates to the federation’s four-day central committee meeting that Godongwana would make the announcement at his first medium-term budget policy statement (MTBPS) on November 4.
In his secretariat report, Ntshalintshali indicated that Cosatu and one of its affiliates, the Southern African Clothing and Textile Workers’ Union (Sactwu), want the changes to provide relief to highly-distressed workers and to avoid forcing them to resign and cash in their entire pensions.
”The federation, with the support of Sactwu, proposed to National Treasury in May 2020 that workers who have lost wages or are highly indebted should be allowed limited access to their pension funds. This is to provide relief to highly-distressed workers and to avoid them resigning and cashing out their entire pension funds,” Ntshalintshali stated in the report.
According to the report, Treasury initially opposed the plan, but has now come out in support of it.
Ntshalintshali said final details were being engaged upon to achieve consensus.
”A bill will be tabled with the November 2021 MTBPS to provide immediate relief for such workers in 2022,” he stated in the report.
In terms of the proposal, there will also be a later bill where workers will have access to one third of their pensions in a savings pot, and it is hoped that this may encourage more savings – with the knowledge it will be accessible when there is a need.
”The other two thirds will be in a preservation pot. Conditions on when this two-thirds pot could be accessed, for example, in the event of losing one’s job, need to be finalised,” Cosatu stated.
The federation continues to be highly critical of Treasury, accusing the department of disrespecting ANC resolutions taken at its conference in 2017.
”We are also seeing concerted attempts in some quarters of government officials (especially the bureaucracy in Treasury) to reduce the Nasrec resolutions and the election manifesto to unrealistic populist mandates,” Ntshalintshali explained.
Cosatu also believes there are attempts to water down the mandate to review monetary policy, and to open-endedly delay the implementation of the National Health Insurance.
It said Treasury had focused on reducing expenditure to manage the ballooning deficit and debt levels, primarily through imposing a wage freeze for four years on public servants, and that this has weakened public services, demoralised state employees and choked economic growth.
SA Communist Party general secretary Dr Blade Nzimande told the Cosatu gathering that austerity measures were suffocating the country’s economy and had led to the government not honouring the wage agreement to increase public servants’ salaries last year, a dispute which now awaits a Constitutional Court judgment.
”This undermined collective bargaining – not only in the public sector – as capitalist bosses also saw this as an example for them to squeeze workers’ wages further, and sought to weaken collective bargaining in industrial sectors,” Nzimande said.