Proposed Pension Funds Amendment Bill could put pension funds at risk - Treasury
The private members bill by the Democratic Alliance (DA)'s Dion George proposes that South Africans in financial difficulty use their pensions as surety to access loans from banks.
CAPE TOWN - National Treasury said that the proposed Pension Funds Amendment Bill could put the country’s pension funds at risk.
The private members bill by the Democratic Alliance (DA)'s Dion George proposed that South Africans in financial difficulty use their pensions as surety to access loans from banks.
The bill came under discussion before Parliament’s Standing Committee on Finance on Tuesday.
A survey conducted on the proposal found that 77% of participants said that they did not support the Pension Funds Amendment Bill.
Before Tuesday’s meeting, the bill had gone through a public hearings process where a number of organisations and Treasury took part.
Senior Treasury official, Ismail Momoniat, expressed his concerns about the proposed legislation, saying it was lacking in technical details.
"Certainly as a treasury we think this would pose a great risk to the retirement system and we think that there’s a lot of abuse that’s already happening because many funds do allow loans for mortgages and they don’t use it for mortgages, they use it for other things," Momoniat said.
George said that Treasury did not fully understand his proposal.
"Annual fund money never gets touched. So to equate there is a loan that comes out the fund and wobbles the whole system is technically wrong," George said.
The bill will now be processed further, with changes expected to be made.