Government has no intention to nationalise people’s pension (or provident) funds, or prevent them from accessing their money, says the Department of Basic Education.
This after rumours alleged that government would take away people’s hard-earned pensions, and prevent them from accessing their funds.
The department says the rumours were based on a misunderstanding of government’s proposals.
Instead, the department says government has proposed retirement reforms, which will protect employees when they retire.
“The retirement reforms, including those relating to preservation of savings, are aimed at ensuring that pension fund members are better protected and can retire comfortably. Government is proposing important measures to lower charges on the pension funds of workers, to ensure that they maximise their pensions,” the department said.
Employees are encouraged to keep their savings until they retire and to convert some of their retirement savings into income at retirement.
The department said currently, only an estimated 6% of citizens are able to maintain their lifestyle and replace their income fully at retirement.
The department also said that the proposals have not yet been put into law.
“National Treasury is currently consulting widely on these proposals through several fora, including with labour unions, industry and engagements with the general public. It will take government at least two years before the proposals are made into law,” the department said.
According to the department, the proposals seek to encourage pension fund members to preserve their money in their own funds (with old or new employer), or with a financial institution when they change jobs, and to