The Standing Committee on Finance was briefed by the National Treasury yesterday on the Pension Funds Amendment Bill, following its re-introduction to the National Assembly on 30 January 2024.

In his 2022 Budget Speech, the Minister of Finance, Mr Enoch Gondongwana, announced for the first time the government’s plan to fundamentally restructure the retirement system to allow for greater preservation and partial access to funds through a “two pot” system.

Mr Godongwana said: “Consultations are proceeding following the release of a discussion paper last year (2021) and the draft legislation on these amendments will be published for comment in the middle of the year (2022).

In 2023, the National Treasury then introduced the draft Bill to the National Assembly together with other tax and revenue law amendment Bills, which were subsequently referred to the Standing Committee on Finance for further processing. Afterwards, the National Treasury briefed the committee on the draft Bill.

Following the briefing, the committee published the draft Bill and invited interested individuals and stakeholder organisations to submit written comments, which were followed by oral proposals on 19 September 2023.

On 25 October 2023, the National Treasury briefed the committee on a revised Bill, which considered the public comments. However, the Bill was subsequently withdrawn to obtain Cabinet’s approval and certification by the Office of the Chief State Law Adviser. These processes have since been finalised.

According to the National Treasury, the Pension Funds Amendment Bill seeks to address two primary concerns regarding the current design of the retirement system. These are the lack of preservation of retirement funds before retirement and a lack of access to funds, even in cases of an emergency.

It is against this backdrop that the Pension Funds Amendment Bill is proposing a reform to the retirement saving regime. The committee wants the new reforms to be implemented from 1 September 2024.

 Justice Molafo
7 February 2024