Cosatu pushes for major two-pot retirement reforms

A YEAR after the implementation of the two-pot retirement system, as lawmakers iron out technical issues so that laws line up, trade federation Cosatu is suggesting several major changes to help workers in financial distress.

- NICOLA MAWSON

AMID scrutiny of South Africa's newly launched two-pot retirement system, trade federation Cosatu calls for significant reforms to better support financially distressed workers.

While National Treasury is willing to consider some of Cosatu's proposals, it's made clear it won't compromise on the system's fundamental purpose: ensuring South Africans have enough money to retire on.

The tug-of-war played out during a recent report back by the Select Committee on Finance on the Revenue Laws Amendment Bill for 2025, with the first iteration of this law having passed in 2023 to provide the legal framework under which the Two-Pot retirement system could come into effect.

The Bill itself is fairly dry stuff technical changes to align the Income Tax Act with the new retirement system. But the written representations from trade union federation Cosatu revealed a much bigger conversation about what workers should be allowed to do with their retirement savings.

Since the two-pot system launched in September 2024, it's already made waves. Your retirement contributions are now split into a savings pot you can dip into before retirement, and a larger retirement pot that stays locked away until you stop working.

According to the Reserve Bank of South Africa, the reforms have even boosted tax revenue. And the South African Revenue Service indicated that, as of the start of this year, R43.42 billion after tax had been paid out under the new regime to 2.4 million South Africans.