The National Treasury is moving ahead with a ‘two-pot’ system to allow for easier access to employee pension funds, but this will take some time to get off the ground
01 September 2022 - 05:00
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In your article “Will Treasury’s New ‘Two-pot’ Plan Save SA Pensioners?” dated August 4 2022, Jaco Visser writes: “It’s all systems go for the new retirement system, which allows employees to draw from their pension funds without the same penalties as before.” But the Government Employees Pension Fund informed employees at the department of correctional services that this information is not accurate. This is a bit confusing.
Thembinkosi Jethro Nokai
The Treasury’s response:
The amendments enable South Africans to save for non-retirement purposes (for example, emergencies) via their retirement funds, while preserving more of their savings for retirement. These amendments aim to encourage members to preserve their retirement savings by making it more flexible to accommodate unforeseen pressures that members face during the span of their working life.
It makes it possible for workers to not have to resign from their employment merely to access their retirement funds and would have assisted members during a crisis like the Covid pandemic, when many employees faced reduced salaries or were not paid at all.
The process for enacting any amendments following publication involves taking public comments. After receipt of written comments, the Treasury normally engages with stakeholders through public workshops to discuss the written comments on the draft bill.
The standing committee on finance and the select committee on finance in parliament are expected to make a similar call for public comment and convene public hearings on the 2022 draft bills before their formal introduction.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
READER LETTER OF THE WEEK
YOUR MONEY: Confusion over two-pot plan
The National Treasury is moving ahead with a ‘two-pot’ system to allow for easier access to employee pension funds, but this will take some time to get off the ground
Dear Editor
In your article “Will Treasury’s New ‘Two-pot’ Plan Save SA Pensioners?” dated August 4 2022, Jaco Visser writes: “It’s all systems go for the new retirement system, which allows employees to draw from their pension funds without the same penalties as before.” But the Government Employees Pension Fund informed employees at the department of correctional services that this information is not accurate. This is a bit confusing.
Thembinkosi Jethro Nokai
The Treasury’s response:
The amendments enable South Africans to save for non-retirement purposes (for example, emergencies) via their retirement funds, while preserving more of their savings for retirement. These amendments aim to encourage members to preserve their retirement savings by making it more flexible to accommodate unforeseen pressures that members face during the span of their working life.
It makes it possible for workers to not have to resign from their employment merely to access their retirement funds and would have assisted members during a crisis like the Covid pandemic, when many employees faced reduced salaries or were not paid at all.
The process for enacting any amendments following publication involves taking public comments. After receipt of written comments, the Treasury normally engages with stakeholders through public workshops to discuss the written comments on the draft bill.
The standing committee on finance and the select committee on finance in parliament are expected to make a similar call for public comment and convene public hearings on the 2022 draft bills before their formal introduction.
Send us your questions to yourmoney@fm.co.za
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