Cosatu Welcomes Finance Minister Tito Mboweni's Pension Fund Access Proposal

• On Wednesday, Minister of Finance Tito Mboweni announced that Treasury was working on a proposal to allow workers access to their pensions
• The Congress of South African Trade Unions welcomed Mboweni's announcement and asked him to speed up the process
• Mboweni stated that access to pension funds will be afforded under special circumstances, such as paying off debt

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The Congress of South African Trade Unions (Cosatu) says it welcomes Minister of Finance Tito Mboweni's announcement to allow workers to have access to their retirement funds.

The announcement was made on Wednesday, and Mboweni says the National Treasury has made a proposal for South African workers struggling to pay off their debt to withdraw a portion of their pension to meet obligations, according to Fin24.

Cosatu says allowing workers access to their pension funds could be particularly beneficially to people who have had financial struggles due to the coronavirus pandemic, according to a report by eNCA.

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Currently, individuals can only access their pension funds upon retirement, resignation or when they have been retrenched. With the new proposal by Treasury along with trade unions and businesses, people may be able to make limited withdrawals from their pension funds.

"There is a matter which seems to be stuck somewhere in the system, it has to do with making allowance for workers to have access to a percentage of retirement funds in this time of difficulty," Mboweni said in a quote by eNCA.

Mboweni stated that access to pension funds should be for specific financial issues such as paying off a bond or finalising debt.

While Cosatu welcomes Mboweni's announcement, the trade union would like his ministry to speed up the process of tabling a Bill to Parliament so that workers access their retirement funds sooner rather than later.

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Cosatu also added that workers needed access to their retirement funds because unlike other industries, they had not been offered tax breaks.

"It is critical that workers be allowed access to their retirement savings because companies and the private sector in general [have] been offered various incentives and tax breaks to bail it out, while workers continue to struggle," said Cosatu.

Finance Minister Tito Mboweni says damage to property may amount to R15 billion

In other news, Briefly News reported that Minister of Finance Tito Mboweni says the damage to infrastructure caused during the unrest in KwaZulu-Natal and Gauteng may cost the South African Special Risk Insurance Association (Sarisa) billions of rands.

Sarisa, which is a state-owned short term insurer that covers people, businesses and government entities against financial damages caused by riots, terrorism or civil commotion, could pay anywhere between R15 billion to R20 billion to cover costs incurred by damaged properties, according to SABC News.

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Mboweni stated that Treasury allocated Sarisa R3.9 billion to quell the insurance claims from companies who suffered losses during the unrest.

This funding by Treasury to Sarisa could aid the insurer cover damages since the company only managed to collect more than R2.4 billion in premiums in 2020, according to a report by Moneyweb.

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Source: Briefly News