COSATU should continue to support the private member’s bill to allow workers to access a portion of their pension funds, says the federation’s general secretary Bheki Ntshalintshali, adding that the final details are being engaged upon to achieve general consensus.
Ntshalintshali was reporting back to members of the COSATU central committee during the federation’s four-day meeting this week and said the federation’s proposal was already before Parliament.
“A bill will be tabled with the November 2021 MTBPS to provide immediate relief for such workers in 2022,” he stated in the secretariat 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.
Ntshalintshali said National Treasury has engaged COSATU and agreed to the federation’s proposals.
He said they committed to tabling an amendment bill with the budget in February in Parliament.
This bill will provide for workers to be able to withdraw limited portions of their pension funds as an economic relief measure.
“COSATU has proposed that workers be allowed to choose cash withdrawals as well as loan options,” said Ntshalintshali.
“The agreement with Treasury is that this bill should be prioritised and passed by Parliament by June so that it can come into effect on 1 October 2021. However, this has not happened.
The 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.
The federation continues to be highly critical of Treasury though, accusing the Department of Finance 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 said.
In May 2020, COSATU and SACTWU made proposals to Treasury and Parliament on the need to allow workers who have lost wages to access a portion of their pension funds.
Several engagements have since taken place between COSATU and Treasury to discuss this.
However, it took months for National Treasury to respond and agree to these engagements.
COSATU made two proposed options on how this could be done, that is through a Ministerial Direction allowing access for emergency purposes or through an expansion of the existing home loan option for pension fund holders.
Treasury initially indicated that it is opposed to COSATU’s proposal on the basis that it does not believe it is necessary, that workers can seek relief from the UIF and that it undermines the sustainability of pension funds.
Treasury had initially stated that it does not believe that either option proposed by COSATU is legally possible.
“Workers are likely to ask why government and the private sector are allowed to benefit from workers’ pension funds and how they are invested, but when workers and unions ask that they be invested and utilised to benefit workers, then they are told no,” said Ntshalintshali.
“A Private Member’s Bill has since been drafted by a DA Member of Parliament in response to and in support of COSATU’s pension funds proposal.”
He said it does not matter whether the Private Member or Treasury’s bill is passed in the end, as long as one is passed, and it contains COSATU’s proposals and it comes into effect in 2022.
Last month, Cosatu and the Public Servants Association hit out at National Treasury’s statement that members of the Government Employees Pension Fund (GEPF) will be excluded from new rules enabling pre-retirement withdrawals.
Treasury had advised members of retirement funds not to withdraw funds – unless they are retiring, resigning or retrenched – as the law to enable these pre-retirement withdrawals is not yet enacted.
- Inside Politics
