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The Congress of South African Trade Unions (COSATU) welcomes the excellent progress rolling out the long sought Two Pot Pension Reforms since 1 September. We have been heartened by the response of workers to this long-sought reform with millions submitting their applications for immediate relief from their pension and provident funds.
These pension fund reforms are amongst the most transformational since the democratic breakthrough of 1994. Funds are reporting unprecedented numbers of calls and applications. Whilst some funds’ systems were initially overwhelmed, most coped well and COSATU and its Affiliates are intervening with funds experiencing challenges. Members should contact their funds, unions or COSATU when experiencing problems.
We are pleased that nearly R35 billion has been paid to over 2.2 million workers. This number will continue to rise as large pension funds, including the Government Employees Pension Fund, the Post Office amongst others who experienced initial delays, have begun to disperse payments to workers.
COSATU has been deeply dismayed by some callous funds who dragged their feet to amend their rules to allow workers to access their relief. COSATU with Treasury and the Financial Sector Conduct Authority continues to intervene with such delinquent funds to ensure this unacceptable behaviour is dealt with and their workers can exercise their legal right to access relief from their funds. COSATU is working to ensure Telkom’s pension fund’s delay is resolved as is South African Municipal Workers Union with regards to challenges experienced by some municipal workers.
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Whilst welcoming the relief the Two Pot Pension Reforms and the 10% up to R30 000 are bringing to millions of workers, as well as access to a third of future savings when in need, COSATU has submitted proposals for the next round of reforms to Treasury and Parliament to provide further relief to workers and their families. These include granting access to additional relief for workers from existing savings, reducing the tax burden on low-income workers, ensuring workers retain full access to all their savings when losing their jobs, enabling workers to use their pension funds for education fees, and setting caps on fees funds can charge members.
The Federation appreciates that whilst we were not able to achieve all of our demands in the first round of pension fund reforms, workers are for the first time able to access a portion of their savings without having to resign from their jobs or cash out their entire savings. Simultaneously, whilst workers are provided access to relief once a tax year, higher rates of savings will be achieved in the long term as workers will now have an alternative to resignations and depleting all their savings.
COSATU applauds the steadfast support we received from our allies, the African National Congress and the South African Communist Party, in government and Parliament during these processes.
These hard-won reforms are the first step of a journey to place workers’ needs at the centre of this discussion and to ensure pension and provident funds support workers during their careers and in retirement. As with any transformational change improving the lives of millions, there will be critics and confusion on social media. These will dissipate as these reforms reach millions of struggling and highly indebted workers. COSATU will continue to engage Treasury, Parliament and pension funds to ensure workers’ needs are addressed.
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