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Borrowers To Be Affected As ANC Makes Big Move Against Pension Fund Amendment Bill

Several members of the House Permanent Finance Committee objected to the pension fund amendment bill, which aims to give the public access to their funds through credit. The bill was passed last year by DA committee member Dr. Dion George took the initiative to amend the Pension Fund Act to give pension fund members access to some of their pre-retirement funds as loan collateral.

Currently, Article 19 of the Pensionskassengesetz allows Pensionskasse members to have access to loans where the Pensionskasse assets serve as collateral for the loan to obtain a home loan. However, the law does not allow pension fund members to obtain loans for other purposes.

Opinion

According to George, the outbreak of the Covid-19 pandemic has had a serious impact on the country's economy and has left many South Africans in financial trouble. The amendment explains that the bill aims to amend the law to allow pension fund members to obtain loans backed by guarantees from registered pension funds to reduce financial stress in an emergency such as the Covid-19 emergency or to alleviate other emergencies, similar to a pandemic.

In addition, it states that the insured then has access to secured loans and can use investments in his pension fund before retirement without compromising his provisions for possible retirement. This will fall back on credit institutions that provide pension fund member loans at competitive rates and for longer or deferred repayment terms, provided the loans are fully guaranteed.

Stakeholders who submitted proposals to the committee in August included the National Treasury, Cosatu, Fedusa, South African Savings and Investments Association, Batseta Pension Fund Council, Institute of Pension Funds in Africa (IRFA), South African Institute of Certified Public Accountants (SAICA), Association of South African Banking (BASA) and Distinguished South Africa Campaign.

The Commission has received a letter from George asking him to amend the bill to limit the percentage of guaranteed loans from pension funds to 30% instead of the 75% originally proposed in the bill.

The four members of the ANC committee who did not support the law included Jim Skosana, Kenneth Morolong, Dorothy Mabileca, and Zanele Ncomo. The majority of interest groups supported the bill's goal of easing pension fund members temporarily experiencing financial difficulties due to the current pandemic, generally supporting, but rejecting the bill.

Conclusion

Chairman Joe Maswangani said the committee found that while stakeholders sympathized with the bill's goals, they felt it was inadequate and did not fully address the issue. Mabiletsa said the commission's job was to represent the country's people.

Source: IOL.ZA

FF Plus MP Wouter Wessels said the bill was imperfect but added that, according to the party and with some amendments, it would be a good reason to allow pension funds to use their funds as collateral for personal loans in accordance with their respective fund rules. . The bill will be submitted to the National Assembly.

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ANC Covid-19 DA House Permanent Finance Committee Pensionskassengesetz

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