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By Mayibongwe Maqhina 
1 hour ago
Cape Town – Finance Minister Tito Mboweni announced that changes to the legislation governing retirement funds were expected to allow a limited withdrawal of retirement funds in certain circumstances.
Mboweni said the government is deeply sympathetic to the difficult situation South Africans are facing as a result of the Covid-19 pandemic.
“That is why the government has put in place a series of measures to relieve pressure on workers.
“In addition, as announced in the recent medium-term budget policy statement, the government will introduce the necessary legislative amendments next year to allow limited withdrawals from retirement funds in certain circumstances, but linked to mandatory conservation requirements,” he said .
Mboweni was responding to parliamentary questions from IFP MP Mzamo Buthelezi, who asked him if he had considered accessing unclaimed pension benefits to help alleviate the devastation of the pandemic on workers in vulnerable sectors.
The minister said the government has not considered the use of unclaimed retirement fund benefits as part of relief measures for the Covid-19 pandemic.
“No, since these funds are not centralized or held in a single fund, and neither the government nor any of the financial sector regulators have or manage such funds, so no consideration has been given to using the benefits of the retirement fund. unclaimed as a Covid-19 pandemic related relief measure, “he said.
The minister also said that the unclaimed benefits were no different from any other retirement fund benefits, meaning the benefits belong to the members and beneficiaries.
“Therefore, they are maintained and administered by boards of trustees of these funds, and not by the government. Therefore, the government is not in a position to access or use the unclaimed retirement fund benefits.”
Mboweni also said that three related Supreme Court of Appeals rulings recently have also considered how unclaimed funds can be used under current legislation.
“The use of unclaimed benefit funds should be duly legislated, and the upcoming Financial Institutions Conduct Bill takes the first steps in this direction, but is only expected to be enacted into law by the end of next year.” .
In his response to a separate question, the minister said that the best way to inspire confidence in any government project was to generate economic growth and rid the country of corruption and inefficiency.
He said that people must trust the public servants who manage the projects in which they invest their funds.
“The government does not determine where retirement funds invest. It is the board of trustees of a retirement fund that determines the investment policy for that retirement fund as part of its fiduciary duty to the fund and its members.”
Buthelezi asked Mboweni how he planned to inspire confidence in taxpayers and pension fund managers to invest in the government’s planned infrastructure development projects.
The minister said that the trustees of the retirement funds, like most investors, wanted to invest in a project as long as they have confidence in those who manage those projects in a way that generates the returns that investors expect.
He also said that the recent medium-term budget policy statement outlined the steps the government intended to take to stabilize debt and generate more confidence, investment and economic growth.
Political Bureau
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