The DA welcomes the Minister of Finance’s commitment to amending the Pension Funds Act to enable pension fund members to leverage this asset to their own benefit, as proposed by the DA in September 2020.
My Private Member’s Bill (PMB), submitted last year, made provision for members to access a portion of their benefit as collateral for a loan. The loan would be repaid and the capital invested would, therefore, not reduce. During the public hearings, several stakeholders gave input into how the Bill could include a withdrawal provision that would reduce significant financial pressure now felt by pension fund members in the wake of the ongoing pandemic. Although the financial mechanism differs, the outcome – urgent relief to embattled workers – remains the same.
Given that my PMB is currently still on the table and in the process of being amended to include recommendations made during the Committee hearings, including a withdrawal mechanism is possible. This would significantly speed up the process of enacted the legislation necessary to provide for the much-needed relief.
By withdrawing the funds, members will reduce their capital invested and ultimately receive a lower pension. A withdrawal, with specific conditions on how it would be utilised – such as for debt reduction – would however make a significant impact on the lives of workers hardest hit by the pandemic.