On September 1, the SA democratic government finally introduced the two-pot system to pension funds after more than 10 years in the making. The objective of this system is to allow employees access and to withdraw from their pension funds.
According to Cosatu, the two-pot system is its brainchild. The biggest union federation in Africa says the system will prevent workers resigning from their jobs to access their pension funds. They can only withdraw money once in a financial year.
On the other hand, police union Popcru is vehemently opposed to the two-pot system. Popcru, a Cosatu affiliate, said the system won’t benefit its members. A few days before September 1, the police union urged the government not to implement the system. However, its plea fell on deaf ears.
Financial experts are discouraging workers from dipping into their pension funds. Their advice is that workers should only withdraw money if they really need it. Their concern is that workers might deplete their savings. When they retire, they might be left with nothing in their savings pot.
Interestingly, Sars is benefitting handsomely from the two-pot system withdrawals.
The pertinent question is: How is the two-pot system beneficial to the workers? It’s not beneficial at all. Some, if not most, workers are going to retire with only a few hundred rand in their savings pot.
The government should reconsider this system before it's too late.
In the past, the system allowed workers to withdraw from their pension funds. However, they paid back the money they had withdrawn without interest. This was a good and ideal system. The government should revert to it.
Thabile Mange, Mogale City
READER LETTER | Two-pot system to impoverish workers
Image: Freddy Mavunda
On September 1, the SA democratic government finally introduced the two-pot system to pension funds after more than 10 years in the making. The objective of this system is to allow employees access and to withdraw from their pension funds.
According to Cosatu, the two-pot system is its brainchild. The biggest union federation in Africa says the system will prevent workers resigning from their jobs to access their pension funds. They can only withdraw money once in a financial year.
On the other hand, police union Popcru is vehemently opposed to the two-pot system. Popcru, a Cosatu affiliate, said the system won’t benefit its members. A few days before September 1, the police union urged the government not to implement the system. However, its plea fell on deaf ears.
Financial experts are discouraging workers from dipping into their pension funds. Their advice is that workers should only withdraw money if they really need it. Their concern is that workers might deplete their savings. When they retire, they might be left with nothing in their savings pot.
Interestingly, Sars is benefitting handsomely from the two-pot system withdrawals.
The pertinent question is: How is the two-pot system beneficial to the workers? It’s not beneficial at all. Some, if not most, workers are going to retire with only a few hundred rand in their savings pot.
The government should reconsider this system before it's too late.
In the past, the system allowed workers to withdraw from their pension funds. However, they paid back the money they had withdrawn without interest. This was a good and ideal system. The government should revert to it.
Thabile Mange, Mogale City
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Two-pot withdrawals to expose dodgy employers
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