- Labour federation Cosatu and the Public Servants Association have hit out at Treasury's statement that members of the Government Employees Pension Fund will be excluded from new rules enabling pre-retirement withdrawals.
- Cosatu wants to meet with Finance Minister Enoch Godongwana and National Treasury to address its concerns and ensure all workers can access a portion of their pensions.
- According to Treasury, the GEPF is not regulated under the Pension Funds Act.
Labour federation Cosatu and the Public Servants Association have hit out at National Treasury's statement that members of the Government Employees Pension Fund (GEPF) will be excluded from new rules enabling pre-retirement withdrawals.
Treasury on Wednesday issued a statement on its approach to growing calls to allow members of retirement funds to access part of their savings, as the economic impact of Covid-19 hits household budgets. Cosatu had proposed that members be allowed to access 30% or R30 000 of their savings.
Government has proposed a two-bucket system, allowing one pot of savings to be preserved until retirement and the other to allow pre-retirement access only in emergencies or extraordinary circumstances. These measures would cover pension and provident funds, but another approach on withdrawals is being considered for retirement annuities.
These legislative changes to enable the new withdrawal mechanism are expected to be effective in 2022.
Treasury also noted that withdrawals will not cover members of the GEPF, as it is not regulated under the Pension Fund Act.
"… [H]ence, no Covid-related withdrawals will be allowed," Treasury said.
In a statement, Cosatu national spokesperson Sizwe Pamla said Treasury's announcement was "outrageous" and "unacceptable".
Pamla said Treasury is the "chief bastion of resistance" when it comes to progressive socio-economic policies. "The federation rejects this unwarranted isolation and victimisation of public servants," Pamla added.
Pamla said many government employees were taking on additional jobs in the private sector to supplement their incomes, and that there were high levels of indebtedness in households.
The Covid-19 pandemic worsened their situation, Pamla added.
Cosatu wants to meet with Finance Minister Enoch Godongwana and National Treasury to address its concerns, and ensure all workers will be able to access a portion of their pensions.
Treasury has not yet responded to Fin24's request for comment.
The Public Servants Association (PSA), which also represents public servants who are members of the GEPF, noted that the pension savings of these employees are governed by separate rules in the form of the Government Employees Pension Fund Act.
"… Treasury must equally take note that public servants have also equally been affected by the devastating impact of Covid-19, like other employees in the country. Government and specifically the Treasury, is well aware that public servants are having to make 'ends meet', after not receiving their salary increases for 2020," the PSA said in a statement.
"The PSA can no longer allow that pension monies of public servants only be available for high-ranking politicians and connected individuals, who access these monies through the Public Investment Corporation (PIC), while the owners of the monies are suffering without houses and drowning in debts," the union said.
The PIC is a state-owned investment management company, which oversees over R2 trillion in assets, mostly from the Government Employees' Pension Fund.
The PSA added that the GEPF should not be the sole pension scheme for public servants, and that there must be alternative pension schemes for them to contribute to, and access.