Labour federation SAFTU has rejected the two-pot retirement system in its current form. It has taken issue with the limitations imposed on the second pot, arguing that it dilutes the pension reform that workers have been demanding.

SAFTU General Secretary, Zwelinzima Vavi said that the rules mean that a worker who is dismissed, retrenched or who resigns, will not access their pensions in lump sum until they become of retirement age.

“Many workers are confronted with financial hardships and emergencies before that age, and the ability to access a portion of their pension savings can provide much-needed relief.” said Vavi.

In the current version which was passed into law last week workers will have access to a third of their pensions, with a payable withdrawal capped at R30 000.

The rest, over 66%, will be locked away and only accessible once the individual retires or reaches that age. This will then be disbursed in the form of an annuity. Saftu’s has demanded a revised two-pot system.