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Controversial pension rule law passes first amendment

Mar 15 2016 20:30
Jenni Evans, News24

Cape Town  The government had no intention of nationalising pension money through new pension withdrawal rules, Finance Minister Pravin Gordhan said in the National Assembly on Tuesday.

Gordhan was replying to concerns raised during a debate on the Revenue Laws Amendment Bill.

The Bill was referred to the National Council of Provinces on Tuesday in the first step towards amending some provisions of the Taxation Laws Amendment Act after an outcry from unions over new pension withdrawal rules.

Unions were upset by government's plans to use the Act to prevent workers from withdrawing their pension money to pay off debt.

The idea of the new rules was that people would not retire broke and end up relying on the state for a pension.

Instead, when employees resigned, they would have had to invest it in a fund that would give them a monthly payment when they retired.

Mass action

The Congress of SA Trade Unions (Cosatu) promised mass rolling strikes and protests if employees could not access their pension money when they wanted.

The trade union federation claimed government employees were resigning in their droves to get all their pension money before the new law was introduced on March 1 2016.

The amendments proposed to postpone the annuitisation requirement for provident funds for two years until March 1 2018.

Gordhan told the National Assembly this was to reach consensus on the Act instead of proceeding while people were opposed to it.

There were consultations on the Act but it had become clear more discussions were needed.

ANC MP, Thandi Tobias, rejected suggestions by the Democratic Alliance and the Economic Freedom Fighters that the Act's real purpose was to be able to use government pensions to fund a possible R1 trillion nuclear build programme.

"That is absurd," she said.

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