Mashatile says the two-pot system will benefit debt-ridden workers.
Deputy President Paul Mashatile has appealed to South Africans to be wise when accessing the two-pot pension system.
Mashatile gave the keynote address at the opening of the National Economic Development Labour Council (NEDLAC) summit in Johannesburg on Friday.
NEDLAC was established as a vehicle for forging partnerships between South Africa’s main social partners in order to jointly rebuild a post-apartheid country.
This was the 29th summit since NEDLAC was established.
ALSO READ: Two-pot retirement system: South Africans, unions unhappy about Sars’ tax deductions
Mashatile hailed the new system which came into effect on 1 September, noting how it is a milestone which will assist burdened workers struggling with debt.
Be wise with the pots
However, he warned South Africans not to abuse the funds they withdraw.
“We urge South Africans to be wise in accessing their savings. Please only take it if there is a desired need,” he said.
The two-pot retirement system allows South Africans to access a portion of their retirement savings for emergencies.
One-third of retirement funds are preserved in a savings component that can be accessed before retirement, while the remaining two-thirds are reserved for retirement, ensuring financial security.
Government’s intention with the two-pot system is to help South Africans manage financial stability and flexibility.
Those who need emergency funds can partially withdraw while protecting most of their savings for retirement.
Mashatile said NEDLAC had contributed towards the formation of various government policies including the Employment Equity Act, Labour Relations Act and the Basic Conditions of Employment Act.
He said governments partnership with NEDLAC was important for creating social compacts aimed at alleviating poverty.
ALSO READ: Two-pot system: a hearty meal for some and just bones for others
“We appreciate the collective in NEDLAC that has always been critical in engaging government in response to socio-economic challenges, hence we are of the view that we must continue to strengthen NEDLAC as a critical player in building strong social compacts,” he said.
Mashatile said the government of national unity (GNU) was concerned about the high unemployment in the country.
He said there were discussions about a new social compact that would help South Africans out of poverty.
