The Treasury’s undertaking that a pension fund reform bill would be released for public comment later in 2021 did little on Tuesday to stop parliament’s finance committee from proceeding with a DA-proposed bill.Chair Joe Maswanganyi stressed at a committee meeting that the committee had to strictly stick to the legislative procedure in processing a bill proposed by DA MP Dion George, to avoid a possible legal challenge. The parliamentary process could not be stifled, he said.
George agreed to amend his bill to reduce the permissible maximum amount of a loan guaranteed by the member’s pension fund assets from 75% to 30% of the assets as proposed by Cosatu. Another amendment proposed by George was that only one loan per member would be allowed. He dismissed objections to his bill, saying not everyone would take out a loan and not everyone who took out a loan would default on repayment causing a collapse of the retirement industry.
Treasury deputy director-general Ismail Momoniat expressed strong opposition to George’s “seriously flawed” bill, which he said failed to consider the tax implications, lacked technical detail and failed to take into account that the fundamental objective of retirement funds was to get people to save for their retirement.
Momoniat said the Treasury was “pretty confident” that its bill on pension fund reform could be released for comment at the same time as the medium-term budget policy statement later in 2021.