South Africa: Govt Drags Its Feet On Retirement Benefits Reform

analysis

Last week, National Treasury and Cosatu officials met for the third time since April to consider giving retirement fund members access to their savings to mitigate the loss of income due to the Covid-19 lockdown and subsequent economic downturn. However, there is still no consensus.

June was the last month in which employers and employees could access the Unemployment Insurance Funds' (UIF) Temporary Employee/Employer Relief Scheme (Ters) benefits, and Cosatu is expecting more employers to retrench workers now these benefits can no longer be accessed. Yet, the government continues to drag its feet in adopting retirement benefit reform proposals that have been in the pipeline for years.

Andrew Crawford, director at Seshego Benefit Consulting, says all parties, including the departments of labour, social development and finance, have agreed that the social security floor is incomplete and that retirement benefits should be made accessible once unemployment benefits run out.

He says this has been on the agenda of Nedlac and the Interdepartmental Task Team (IDTT) for over a decade, but has not come to any conclusion.

Business Maverick reported in June how pension and provident funds can lawfully amend their rules to provide for the payment of "special relief benefits" to...

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