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National Assembly adopts draft law delaying retirement reforms by 2 years

Currently, provident fund members can cash in all their savings when they resign or retire.

FILE: Legislation making it compulsory for provident fund members to convert at least two thirds of their savings into an annuity when they retire was due to come into effect this month. Picture: Thomas Holder/EWN.

CAPE TOWN - The National Assembly has adopted a draft law that provides for a two-year delay in the implementation of new retirement reforms.

Legislation making it compulsory for provident fund members to convert at least two thirds of their savings into an annuity when they retire was due to come into effect this month.

But following an outcry from trade unions, the government announced it would introduce a Bill to postpone the commencement date to March 2018 to allow for further discussions.

The Congress of South African Trade Unions (Cosatu) had threatened to embark on a general strike and warned it would withdraw support for the African National Congress (ANC) during the looming local government elections.

WATCH: Vavi calls for mass protests over new pension laws

The National Assembly has adopted the Revenue Laws Amendment Bill, despite an objection from the Democratic Alliance (DA).

Finance Minister Pravin Gordhan says it's not true that the government wants to nationalise pensions.

"The money that is in provident funds and pension funds belongs to the workers and others who contributed to the funds. Government has no intention to nationalise this money."

Democratic Alliance Member of Parliament (MP) David Maynier says the move to delay the implementation of retirement reforms shows the ANC gives in when Cosatu turns on the heat.

"Cosatu threatened to strike; and as usual, the ANC shivered and caved in to Cosatu's demand."

Currently, provident fund members can cash in all their savings when they resign or retire.

The Bill will be sent to the National Council of Provinces for concurrence.

If adopted, it will be sent to the president to sign into law.