For the first time, from 1 September 2024, South African workers who contribute to a retirement fund will be able to withdraw a portion of their retirement savings. This was made official by the Minister of Finance, Mr Enoch Godongwana, during his budget vote speech delivered to a joint sitting of the National Assembly (NA) and National Council of Provinces at the Cape Town City Hall on Wednesday afternoon.
Minister Godongwana said: “Progress has been made on the two-pot retirement system since I last addressed you during the Medium Term Budget Policy Statement. From 1 September 2024, the first cash withdrawals could be made from the savings pot.”
He also announced that contributions to retirement funds would be split, with one-third going into a “savings component” and two-thirds going into a “retirement component”. This initiative, according to Mr Godongwana, would ensure that the government strikes a balance between preserving contributions to safeguard a better retirement for members, while addressing the plight of the people by allowing them to access some of their retirement funds to help ease their financial burdens in times of distress.
Mr Godongwana’s official announcement confirms a presentation made by the National Treasury (NT) to the Standing Committee on Finance on Tuesday, 6 February 2024, in which the NT was briefing the committee on the Pension Funds Amendment (PFA) Bill. The presentation was necessitated by the re-introduction of the Bill to the NA on 30 January 2024.
The PFA Bill was first introduced to the NA in 2023 together with other tax and revenue laws amendment Bills. Speaker Nosiviwe Mapisa-Nqakula then referred the Bills to the Standing Committee on Finance for further processing. Subsequently, the committee published the PFA Bill and invited interested individuals and stakeholder organisations to submit written comments.
On 25 October 2023, the National Treasury briefed the committee on a revised Bill, which had considered the public comments. However, the Bill was subsequently withdrawn to obtain the Cabinet’s approval and certification by the Office of the Chief State Law Adviser, and these processes have since been finalised.
Justice Molafo
21 February 2024
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