FEDUSA Welcomes Commitment by Minister Mboweni to Fastrack Pension Funds Access

30 July 2021

The Federation of Unions of South Africa (FEDUSA) welcomed the public announcement of Finance Minister Tito Mboweni that National Treasury is drafting enabling legislation to allow workers limited access to their pensions.

FEDUSA calls on National Treasury to waste no time in drafting legislation to allow workers access to a portion of their pensions under limited conditions. We acknowledge the economic hardships suffered by workers in both the private and public sectors due to the poor economic climate and the negative impact of the COVID-19 pandemic. This limited access to pensions will assist workers to reduce levels of indebtedness and eliminate the need to access retirement savings through harsh measures such as resignations. FEDUSA further calls on government to allow this limited access to pensions tax free so that workers have more disposable income to cover debts such as bond repayments, amongst other commitments.

As FEDUSA we are mindful of the low saving culture in our country and therefore call on government to allow a once off limited access to pensions tax free. Workers could then have the option of speeding up the repayment of their partial withdrawals by making additional contributions permissible under the Pension Funds Act. Alternatively, they maybe allowed to treat the partial withdrawals as an interest free loan payable over a reasonable period of time.

Any notion of taxing this emergency provision will be seen as double jeopardy and an insult to those workers who have endured the hardships.

We trust that workers will use access to their funds in a responsible manner, mindful of their retirement savings goals and call on retirement funds to increase products that promote a savings culture, especially towards retirement for all South Africans.

 

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(283 Words)

For interviews please contact:

Ms. Riefdah Ajam

FEDUSA General Secretary

079 696 2625

Mr. Ashley Benjamin

FEDUSA Deputy General Secretary

083 258 4433