Estimated reading time: 3 minutes
Finance Minister Tito Mboweni is calling for South African workers to have access to a percentage of their retirement fund in times of difficulty.
Mboweni made the plea during a press briefing, in which he and the National Treasury availed the country’s Economic Support Package in the wake of COVID-19 restrictions and the recent public unrest in KwaZulu-Natal and Gauteng. “It is a matter that has been discussed at Nedlac ad Nauseum and I am now determined more than ever before, to ensure that the officials in the National Treasury and other relevant officials speed up this matter.”
The Minister argued that a worker should be able to access portions of their retirement funds during these difficult times.
According to Mboweni, the funds could, among other things, be used to settle bond repayments or assist in resolving the debt positions they might be in. Adding to this, he emphasised, “But I must warn at the same time that people must ensure that they use this facility for purposes of relief and also making better their own situation.”
The package will now be presented to Parliament as per legislative requirements.
Furthermore, he highlighted, South Africa is a constitutional democracy and a law-governed society. With this in consideration, Mboweni stressed there are procedures and processes which have to be followed when money is being appropriated for one purpose or the other, and the Minister of Finance is the official that is tied to the responsibility in terms of the Money Bills Act to pronounce on budgets and financial matters.
“To that extent, we have to approach Parliament as well, in one form or the other, in order for these appropriations to be fairly and fully within the legal system. Fortunately, we’re a democracy and we have the ability to proceed as required in this difficult time. And then finally, there’s a matter which seems to be stuck somewhere in the system.”
He stressed that it was essential to ensure that the package was funded within currently available resources.
The Finance Minister further stated, “We are not going to be going for borrowing, at all. I think that must be clear. This is not in any way going to include or increase our borrowing requirement. We will obviously make sure that, where needs be, in terms of the package of measures.”
While some might be sceptical about this possible change, if approved, South Africa will not be the first country to allow people to access their retirement funds early in facing economic adversity.
As part of its emergency support measures, during the course of 2020, the Australian government announced provisions to allow Australians to draw from their superannuation savings. Chile also allowed active contributors to withdraw 10% of their individual pension funds voluntarily.
What are your thoughts? Do you feel access to your pension funds will assist South Africans from facing further financial difficulties? Or are you against the decision?
Share your views in the comment section below.
RELATED NEWS
