Cabinet notes retirement savings proposals

Friday, September 21, 2012

Pretoria - Cabinet has taken note of National Treasury's release of proposals to help South Africans save for retirement.

"Cabinet noted the overview paper titled 'Strengthening Retirement Savings: Overview of the 2012 Budget proposals', released for public comment by the National Treasury on 14 May 2012, and will be followed by several technical papers to be released soon for public comment," acting Cabinet spokesperson Phumla Williams said on Friday.

The aim of the proposals, which the public were given the opportunity to comment on, is to assist and incentivise South African households to save more, particularly for their retirement, and to better preserve and grow their pensions.

Cabinet also noted that some specific papers (e.g. on preservation) will be submitted to Nedlac for further discussion to facilitate greater consensus between key stakeholders.

"Final proposals will only be made after the consultation processes are completed, and will also consider how best to protect vested or accrued rights of current retirement fund members. These urgent interim retirement reform measures will complement the more fundamental and comprehensive social security reforms," said Williams.

As Treasury released the proposals for improving the country's retirement savings, Finance Minister Pravin Gordhan said only about 10% of South Africans have been able to maintain their standard of living once they retire, adding that government is looking at ways of lowering retirement fund costs.

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