Finance minister Enoch Godongwana says a draft legislation that proposes partial access to retirement funds, while encouraging a preservation of a bulk of individual retirement savings, will be published by mid-year.<\/p>\n
The minister said this when he tabled his Budget Speech at a sitting of Parliament in Cape Town on Wednesday.<\/p>\n
\u201cGovernment has also proposed a fundamental restructuring of the retirement system for individuals to allow for greater preservation and partial access to funds through a \u201ctwo-pot\u201d system.<\/p>\n
\u201cPart of this proposal includes the possibility of short-term access, which would be dependent on the approval by trustees of each fund,\u201d he said.<\/p>\n
Godongwana said consultations are proceeding following the release of a discussion paper last year and the draft legislation on these amendments will be published for comment in the middle of the year.<\/p>\n
The discussion paper, titled Encouraging South African Households to Save More for Retirement, was published in December 2021.<\/p>\n
It outlines a set of reforms to enable pre\u2010retirement access to a portion of one\u2019s retirement assets, while ensuring that the remainder is preserved for retirement.<\/p>\n
Proposal to use retirement funds for investment in infrastructure<\/p>\n
Godongwana said retirement funds play a critical role in channelling savings into productive investments.<\/p>\n
He said Regulation 28 of the Pension Funds Act sets out the criteria through which these funds may make investments.<\/p>\n
\u201cChanges have been proposed to these regulations to enable greater investment in infrastructure by these funds.<\/p>\n
\u201cAfter consultation on these changes, the amendments will be gazetted next month.\u201d<\/p>\n