South Africa: Proposal to Access Pension Funds Violates National Credit Act's Affordability Criteria and Will Be Abused, Warns Critic

The DA is about to submit a private member's bill to Parliament, which proposes that individual pension fund members should be allowed to use their private savings as collateral for lending proposes. The banks and unions have come out in support of it, but other industry players remain sceptical.

At present, in terms of the Pension Funds Act, retirement fund members can only use their pension money as surety to obtain a home loan, but according to the proposed Pension Funds Amendment Bill 2020, which was written by the DA's deputy finance spokesperson, Dion George, members will be allowed to do so for all types of loans, and for up to 75% of their fund balance.

"The idea behind it is not a silver bullet to solve everyone's financial woes," says George. "It is a simple intervention for people who are suffering under current economic conditions, and/or who have lost their income or businesses due to Covid-19 lockdown restrictions."

George makes it clear that the bill does not propose any form of withdrawal, as they don't want to see people dilute their retirement savings, but he says that "we are facing the biggest crisis in over a century and it...

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