Johannesburg – The Public Servants Association (PSA) on Friday said it was disappointed that the National Treasury was proposing a year-long delay to the “two-pot retirement system” that would enable workers to access their pension funds while still employed.
The union, which represents more than 240 000 public-sector employees, has urged the National Treasury to reconsider the proposition.
The PSA said it was reacting to media reports that said the National Treasury was suggesting a delay in the implementation of the system to 1 March 2025 to provide the investment industry time to implement necessary systems to administer the proposed changes.
Earlier this week, the Daily Maverick reported that: “After assimilating feedback from public and industry, National Treasury – together with the South African Revenue Services (Sars) – has chosen to push the proposed implementation date of the ‘two-pot retirement system‘ one year later to 1 March 2025″.
The report added: “The new proposed two-pot system (technically three pots) is aimed at allowing retirement fund members the flexibility to access one-third of their savings before retirement while preserving the other two-thirds for retirement.”
Commenting on the matter on Friday, the PSA said the reasons put forward by the National Treasury for this proposed delay were the “same old reasons provided by the industry last year”.
The union added: “A further delay to March 2025 will be catastrophic and disastrous for workers. The proposed delay is entirely out of touch with reality and is inconsiderate of the dire financial challenges faced by the majority of workers.”
The PSA said any further delay in the implementation of the “two-pot” retirement system would only benefit the investment industry, which the union stated had “already benefited for many years from the pension savings of workers”.
The union said under the current financial difficulties, workers were “forced to explore riskier options such as borrowing money from loan sharks that charge exorbitant interest”.
The union said some hard-pressed workers were resigning – out of desperation – from their jobs to access their pension savings.
Meanwhile, the National Treasury was said to be proposing an increase in the amount that workers can access from their pension savings from R25 000 to R30 000.
The PSA said it regards the proposed amount as completely inadequate and was unlikely to alleviate the financial pressures faced by workers.
“Pensions are workers’ hard-earned savings, and they should have access to a reasonable portion of their savings,” the PSA said.
“Current limitations on what workers can access from their pension savings will not change the grim reality faced by many workers of losing their cars, houses, and possessions owing to being over-indebted.”
The PSA urged the National Treasury to “reconsider its proposal in consideration of the plight of workers who are in desperate need of financial relief by not delaying the implementation date beyond 1 March 2024”.
The PSA said it was also eagerly anticipating the mid-term budget speech and hopes to hear confirmation from the Minister of Finance on the implementation of the “two-pot” system next year at the beginning of March.
