- Says “complex” issues are holding back the bill
- Amendment to enable access to funds before retirement age included
- NBFIRA conducting research to add to bill
Members who wish to draw from their pension funds to meet their financial needs will have to wait a little longer because certain complexities have caused a delay in amendments to the Retirement Funds Act, the Minister of Finance and Economic Development, Peggy Serame, has said.
The Act currently allows pension fund members to get their benefits only upon reaching retirement age and thereafter to receive monthly payouts.
It is being amended to allow members to tap into their pension funds even before they reach retirement age for various purposes like servicing mortgages settling medical bills and making investments. Minister Serame was answering a question from the MP for Francistown South, Wynter Mmolotsi, in Parliament this week about when employees will be allowed to encash their pensions to meet their needs. She said the process has proved too complex but the bill will be brought to Parliament. “End of June this year we received the draft bill from the Attorney General’s Chambers and the next step is to present it before cabinet,” Serame told the House, adding that the bill will then be gazetted and brought before Parliament for debate before passing into law.
The minister said tapping into their pension funds before members reach retirement age is one of the predominant issues in the amendment to the Act, the idea being to save many from financial ruin and losing their homes. “One for of the key issues we looked at is for people to use pension funds to pay mortgages or medical expenses and others,” she explained.
She disclosed that the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) is carrying out research whose findings will be added to the bill before end of the year. “The third issue that goes with the amendment is the Income Tax Act Superannuation Regulations of 2001 which we are also reviewing because they also have clauses that are only in regulations but not in law,” Serame said. Reacting to the minister’s response, Mmolotsi pointed out that the minister had at one time indicated that the bill would be brought to parliament in July 2021 but it is now July 2022.
“Do you realise that this delay has caused many people to lose their houses which they have bought but have not paid them off due to loss of jobs during COVID-19?, Mmolotsi protested. “If you do recognise that, don’t you think this is the bill that should have been brought to Parliament on a certificate of urgency?” The minister agreed but noted: “But as I indicated at the beginning, because of the complexity of these issues, we have been going back and forth … I have a draft bill that has circulated in government and it is only left to be taken to cabinet.” She said if Parliament allows it, the bill will be brought to the House during the current session.