BUSI MAVUSO: Growth is essential as pension rule changes are only short-term fix
Accessing pensions before they are due, to pay off debt, will only leave more out of pocket when that eventual retirement date does come
The interventions of finance minister Tito Mboweni and the Treasury to support ailing businesses and the most vulnerable in the wake of the third wave of the Covid-19 pandemic, as well as criminality in the protests of July, must be welcomed. What is even more pleasing is that debt wasn’t raised to fund the support package as increased tax proceeds from our mining sector in particular continue to come to the country’s aid.
However, we would like to urge caution with one of the measures that looks likely to be introduced by Mboweni to support employees that have felt the effects of tough economic conditions since the pandemic came into being last March. The idea to allow partial withdrawals from their pension funds to help under pressure workers may come with some dire consequences if one considers that only 6% of South Africans retire with enough savings, according to Treasury estimates...