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The Citizen
6 days ago
- Politics
- The Citizen
Here's why Ramaphosa didn't reshuffle his Cabinet last night
Experts weigh on why Ramaphosa decided to place Mchunu on special leave, and blue tick the Nkabane question While speculation was rife that Cyril Ramaphosa would announce a Cabinet reshuffle on Sunday, experts believe the president's hands may have been tied. Several ministers and deputy ministers have been implicated in controversial scandals over the last few months. On Sunday, Ramaphosa placed the Minister of Police, Senzo Mchunu, on special leave. However, he said little else about the future of Minister of Higher Education and Training, Nobuhle Nkabane, amid reports that she was prevented from travelling to China with a delegation led by Deputy President Paul Mashatile. The Director General in Nkabane's department was sent in her place. Nkabane has been embroiled in several blunders concerning the Sector Education and Training Authority (Seta) boards. Ramaphosa has also not filled the position of Deputy Minister for Trade, Industry, and Competition after he fired the DA MP Andrew Whitfield for going on an unapproved trip to the United States (U.S.). No need to reshuffle Political analyst Sanet Solomon told The Citizen on Monday that a wholesale Cabinet reshuffle may not be the most sensible thing for the President to do at this stage. 'An entire Cabinet reshuffle may not be needed at this point in time as continuity creates the perception of political stability for global markets,' said Solomon. But, she said, the president should consider firing his underperforming ministers and replacing them with more capable ones. 'This would not only improve governance but positively contribute towards this renewal agenda, which Ramaphosa has been advocating,' she said. Ramaphosa's leadership style in the spotlight Solomon said Ramaphosa has become known for being indecisive when faced with tough situations. However, she believes he has made the right decision to put Mchunu on special leave and ground Nkabene from travelling to China. 'His decision to put Mchunu on a leave of absence makes sense. It allows the investigation to proceed without interference, while allowing the Minister to retain his dignity. 'Ramaphosa's decision to prevent Nkabane from going to China is grounded given the controversy that surrounds her decision to appoint ANC-aligned individuals as chairpersons of Sector Education and Training Authorities (Setas),' she said. Prof Dirk Kotze told The Citizen that he believes that a Cabinet reshuffle will be an inconvenience to the GNU. 'I do not think there will be a general reshuffle because it will mean that he has to consult with the various GNU partners, and it will make no sense for him to do that. But the president should appoint a deputy minister of trade, industry, and competition. 'As far as the Minister of Higher Education is concerned, she is compromised, I think she will soon go,' he said. ALSO READ: Senzo Mchunu investigation will take longer to finalise, says Public Protector Is Ramaphosa protecting his comrades? Meanwhile, Kotze said he believes that Ramaphosa did not take strong action against Mchunu because he did not want to face criticism from within his own party. 'He did that so that they do not say he is vexatious and reactive. He has the reputation of being sympathetic towards the party in KwaZulu-Natal. 'KZN remains a very important province to the ANC, Ramaphosa is very careful when dealing with that province,' he said. Some opposition parties accused Ramaphosa of being lenient to ANC ministers to save his political career. But Kotze believes that Ramaphosa still runs the party. 'He is still strong, and I do not think that there is anyone who really threatens his position,' he said. The ANC's top seven is expected to meet on Monday to discuss the latest developments in Cabinet. NOW READ: DA brands Ramaphosa's decision to suspend Mchunu an illusion of reform'
IOL News
11-07-2025
- Politics
- IOL News
The Global South Fights Back in Bogotá
The mass mobilisation of people against the genocide in the West has been critically important. So too has South Africa's case at the International Court of Justice, writes Imraan Buccus. Image: UN Photo/ICJ-CIJ/Frank van Beek Imraan Buccus The decision by the United States to sanction Francesca Albanese, the UN Special Rapporteur on the situation of human rights in the occupied Palestinian territories, is a direct attack on international law and multilateralism. The world is in a perilous place. The ongoing genocide in Gaza, as well as recent unlawful military strikes on Yemen, Syria, Lebanon, and Iran, are a profound threat to peace, justice, and the integrity of international law. In this context, some of those who have taken a stand for international law have, like Albanese, faced intense pressure. But the tide is now clearly turning. The mass mobilisation of people against the genocide in the West has been critically important. So too has South Africa's case at the International Court of Justice. It was met with widespread international acclaim by progressive forces across the world and many governments in the Global South — but also considerable hostility from the United States. After months of threatening talk, punitive tariffs have now been imposed on South Africa by the US home, South Africa's position at the ICJ has won wide support from within society, including popular organisations outside of the ANC like NUMSA, Abahlali baseMjondolo, and SAFTU, as well as the ANC-aligned trade union federation COSATU. The ANC's support is in steep decline at the polls, but its principled position on Palestine places it in tune with the sentiments of the vast majority of South Israel and the United States have received vociferous support from a small but strident white-dominated pro-Western lobby at home. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ That lobby has attempted to isolate and smear those who have stood up for justice. There have been character assassinations of a number of decent people, and considerable peddling of conspiracy theories, such as the entirely un-evidenced claim that Iran bribed the ANC to take Israel to the ICJ. With growing pressure abroad and an aggressive pro-West lobby at home, South Africa needed a smart and effective diplomatic strategy to ensure that it could hold the line on its principles without being isolated. In January, South Africa convened the first meeting of what is now called the Hague Group — a new bloc of states committed to the defence of international law. That meeting brought together nine countries from across the Global South, including Asia, Africa, and Latin America, that share a deep concern about what is now widely termed the genocide in Gaza. One of the most important immediate consequences of South Africa's ICJ action has been the widespread uptake of the term 'genocide' to describe what is happening in Gaza. For months, this word was taboo in diplomatic settings. Now, it is shaping how states and publics frame the conflict. That linguistic shift marks an increasingly effective challenge to the Western domination of the moral and legal Colombia and South Africa are co-convening the next high-level meeting of the Hague Group in Bogotá on 15–16 July. This is a major diplomatic coup for both countries. Colombia, under the leadership of Gustavo Petro, is home to one of the most progressive governments in the world. Together, these two countries are building a new axis of international cooperation, rooted in justice, legality, and human rights. The countries that have already confirmed participation in the meeting in Bogotá include: Algeria, Bangladesh, Bolivia, Botswana, Brazil, Chile, China, Cuba, Djibouti, Honduras, Indonesia, Iraq, Lebanon, Libya, Malaysia, Namibia, Nicaragua, Oman, Portugal, Qatar, Serbia, Spain, Türkiye, Saint Vincent and the Grenadines, Uruguay, and Palestine. More countries are currently discussing participation. The Hague Group is not simply reacting to the crisis in Gaza. It is attempting to build the institutional foundations for an enduring Global South capacity to intervene in multilateral processes. It is the crowning achievement of what has been an extraordinarily successful diplomatic strategy by South Africa. While our country is confronting serious domestic challenges — unemployment, mass impoverishment, crime, and out-of-control corruption — its stance in the international sphere has shown that a principled foreign policy, rooted in the traditions of the anti-apartheid struggle, still has the power to resonate globally and to win global support. As Ronnie Kasrils recently argued, the Hague Group carries the spirit of Bandung into the 21st century. In 1955, leaders of newly independent Asian and African nations gathered in Indonesia to affirm their commitment to sovereignty, non-alignment, and cooperation outside the Cold War binary. That historic conference laid the foundation for the Non-Aligned Movement. From the 1960s onwards, newly independent states sought to use the UN system to push for economic redistribution, anti-colonial enforcement, and disarmament. That effort was eventually thwarted by Western powers. But the memory of that unfinished project remains—and informs this new the end of the Cold War, the moral and legal authority of the international system set up after World War II has been held hostage by a small group of powerful states. The Hague Group insists that international law must apply consistently—to all countries, regardless of their power. It is this insistence that rattles Washington and its allies. The same international legal system that was brazenly ignored by the West during the invasions of Iraq, Libya and the bombing of Yugoslavia is now being invoked by the Global South to demand accountability and role in this process should not be underestimated. Once a key ally of US regional strategy in Latin America, Colombia has undergone a dramatic realignment under President Gustavo Petro. As I wrote in the Mail & Guardian earlier this year, Petro's government, which brought together students, workers, environmentalists, and Indigenous communities, is one of the most progressive in the world today. It has been outspoken in its support for Palestinian rights, regional peace, and climate justice. By co-convening the Bogotá meeting, Colombia is placing itself firmly in the camp of internationalist, law-based diplomacy. This marks a departure not only from past governments, but from the cynical realism that still defines so much of Hague Group's credibility also rests on the fact that it is not just the product of elite diplomacy. In South Africa, Colombia, and many other countries that are participating in the meeting in Bogotá, there is tremendous popular support for Palestine. This alignment between state policy and popular movements is rare—and it gives the group an authenticity that cannot be dismissed as political posturing. Moreover, the Hague Group has been warmly received by many Palestinian organisations, who see it as a rare and concrete gesture of solidarity in an era of global abandonment. Inevitably, the Arab states that have 'normalised' ties with Israel have been conspicuously silent, but others—like Iraq, Lebanon, and Qatar—have chosen to engage. Taking this stance is not without risk. Countries that challenge the West's narrative have faced the threat of aid withdrawal, diplomatic isolation, and investment flight. South Africa, Colombia, and many other countries that are taking a stand in support of international law and justice have pro-West blocs at home that do all they can to escalate the sense that standing up for principle is risky.
IOL News
11-07-2025
- Politics
- IOL News
The Global South Fights Back in Bogotá
The mass mobilisation of people against the genocide in the West has been critically important. So too has South Africa's case at the International Court of Justice, writes Imraan Buccus. Image: UN Photo/ICJ-CIJ/Frank van Beek Imraan Buccus The decision by the United States to sanction Francesca Albanese, the UN Special Rapporteur on the situation of human rights in the occupied Palestinian territories, is a direct attack on international law and multilateralism. The world is in a perilous place. The ongoing genocide in Gaza, as well as recent unlawful military strikes on Yemen, Syria, Lebanon, and Iran, are a profound threat to peace, justice, and the integrity of international law. In this context, some of those who have taken a stand for international law have, like Albanese, faced intense pressure. But the tide is now clearly turning. The mass mobilisation of people against the genocide in the West has been critically important. So too has South Africa's case at the International Court of Justice. It was met with widespread international acclaim by progressive forces across the world and many governments in the Global South — but also considerable hostility from the United States. After months of threatening talk, punitive tariffs have now been imposed on South Africa by the US home, South Africa's position at the ICJ has won wide support from within society, including popular organisations outside of the ANC like NUMSA, Abahlali baseMjondolo, and SAFTU, as well as the ANC-aligned trade union federation COSATU. The ANC's support is in steep decline at the polls, but its principled position on Palestine places it in tune with the sentiments of the vast majority of South Israel and the United States have received vociferous support from a small but strident white-dominated pro-Western lobby at home. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ That lobby has attempted to isolate and smear those who have stood up for justice. There have been character assassinations of a number of decent people, and considerable peddling of conspiracy theories, such as the entirely un-evidenced claim that Iran bribed the ANC to take Israel to the ICJ. With growing pressure abroad and an aggressive pro-West lobby at home, South Africa needed a smart and effective diplomatic strategy to ensure that it could hold the line on its principles without being isolated. In January, South Africa convened the first meeting of what is now called the Hague Group — a new bloc of states committed to the defence of international law. That meeting brought together nine countries from across the Global South, including Asia, Africa, and Latin America, that share a deep concern about what is now widely termed the genocide in Gaza. One of the most important immediate consequences of South Africa's ICJ action has been the widespread uptake of the term 'genocide' to describe what is happening in Gaza. For months, this word was taboo in diplomatic settings. Now, it is shaping how states and publics frame the conflict. That linguistic shift marks an increasingly effective challenge to the Western domination of the moral and legal Colombia and South Africa are co-convening the next high-level meeting of the Hague Group in Bogotá on 15–16 July. This is a major diplomatic coup for both countries. Colombia, under the leadership of Gustavo Petro, is home to one of the most progressive governments in the world. Together, these two countries are building a new axis of international cooperation, rooted in justice, legality, and human rights. The countries that have already confirmed participation in the meeting in Bogotá include: Algeria, Bangladesh, Bolivia, Botswana, Brazil, Chile, China, Cuba, Djibouti, Honduras, Indonesia, Iraq, Lebanon, Libya, Malaysia, Namibia, Nicaragua, Oman, Portugal, Qatar, Serbia, Spain, Türkiye, Saint Vincent and the Grenadines, Uruguay, and Palestine. More countries are currently discussing participation. The Hague Group is not simply reacting to the crisis in Gaza. It is attempting to build the institutional foundations for an enduring Global South capacity to intervene in multilateral processes. It is the crowning achievement of what has been an extraordinarily successful diplomatic strategy by South Africa. While our country is confronting serious domestic challenges — unemployment, mass impoverishment, crime, and out-of-control corruption — its stance in the international sphere has shown that a principled foreign policy, rooted in the traditions of the anti-apartheid struggle, still has the power to resonate globally and to win global support. As Ronnie Kasrils recently argued, the Hague Group carries the spirit of Bandung into the 21st century. In 1955, leaders of newly independent Asian and African nations gathered in Indonesia to affirm their commitment to sovereignty, non-alignment, and cooperation outside the Cold War binary. That historic conference laid the foundation for the Non-Aligned Movement. From the 1960s onwards, newly independent states sought to use the UN system to push for economic redistribution, anti-colonial enforcement, and disarmament. That effort was eventually thwarted by Western powers. But the memory of that unfinished project remains—and informs this new the end of the Cold War, the moral and legal authority of the international system set up after World War II has been held hostage by a small group of powerful states. The Hague Group insists that international law must apply consistently—to all countries, regardless of their power. It is this insistence that rattles Washington and its allies. The same international legal system that was brazenly ignored by the West during the invasions of Iraq, Libya and the bombing of Yugoslavia is now being invoked by the Global South to demand accountability and role in this process should not be underestimated. Once a key ally of US regional strategy in Latin America, Colombia has undergone a dramatic realignment under President Gustavo Petro. As I wrote in the Mail & Guardian earlier this year, Petro's government, which brought together students, workers, environmentalists, and Indigenous communities, is one of the most progressive in the world today. It has been outspoken in its support for Palestinian rights, regional peace, and climate justice. By co-convening the Bogotá meeting, Colombia is placing itself firmly in the camp of internationalist, law-based diplomacy. This marks a departure not only from past governments, but from the cynical realism that still defines so much of Hague Group's credibility also rests on the fact that it is not just the product of elite diplomacy. In South Africa, Colombia, and many other countries that are participating in the meeting in Bogotá, there is tremendous popular support for Palestine. This alignment between state policy and popular movements is rare—and it gives the group an authenticity that cannot be dismissed as political posturing. Moreover, the Hague Group has been warmly received by many Palestinian organisations, who see it as a rare and concrete gesture of solidarity in an era of global abandonment. Inevitably, the Arab states that have 'normalised' ties with Israel have been conspicuously silent, but others—like Iraq, Lebanon, and Qatar—have chosen to engage. Taking this stance is not without risk. Countries that challenge the West's narrative have faced the threat of aid withdrawal, diplomatic isolation, and investment flight. South Africa, Colombia, and many other countries that are taking a stand in support of international law and justice have pro-West blocs at home that do all they can to escalate the sense that standing up for principle is risky.
IOL News
04-07-2025
- Business
- IOL News
Minister Tau defends controversial IDC board appointments amid budget backlash
Trade, Industry and Competition Minister Parks Tau says the board of the National Gambling Board will be appointed soon and the National Gambling Council will meet next week. Image: GCIS Trade, Industry and Competition Minister Parks Tau on Friday defended the appointment of ANC-aligned individuals to the board of the Industrial Development Corporation (IDC). This was after his department came under criticism when he presented the 2025/26 budget in the National Assembly. 'It is disingenuous to simply suggest that capability is limited by the fact that you are affiliated with the ANC. It is not true. It is an anomaly to think that way,' Tau said. There has been outrage after former ministers Ayanda Dlodlo and Sydney Mufamadi, as well as former KwaZulu-Natal premier Nomusa Dube-Ncube, were named among those appointed to the IDC board. Now, there is a push for Tau to appear before the Trade, Industry and Competition Portfolio Committee to explain the appointment process for the board. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ During the budget vote debate, the EFF described the IDC board as being filled with ANC loyalists while the DA questioned whether Tau was serious to believe that Dlodlo and Mufamadi were anything other than ANC deployees instructed to do the party's work. In his response, Tau said it was a problem in Parliament to suggest that Mufamadi, who is an industrial economist, simply because of his affiliation to the ANC, was not eligible to serve on the IDC board. 'He is an industrial economist and lectures on this subject. You can't say a person who served on the World Bank, Ayanda Dlodlo, is not eligible. You don't take advantage of the skills created by the country and experience of the people of your country,' he said. Tau earlier told the parliamentarians that the department's R11 billion budget signalled a pivot from crisis management to enabling growth. 'At its heart lies the simple conviction that when government, business, labour, and communities co-create solutions, we unlock exponential impact,' he said. Tau said as part of the growth agenda, they were committed to an industrial policy that would improve the competitiveness of South African manufacturing, support investment in new industries, and build on South Africa's mineral and resource endowments. 'Our industrial policy promotes local economic activity, and its review will be guided by opportunities in diversification, decarbonisation, and digitalisation.' ANC MP Mzwandile Masina lamented the exporting of jobs because minerals were not processed in the country. 'We are unable to capitalise on them (strategic resources) because we are obsessed with pit-to-port, which has not yielded much economic growth in our country,' Masina said. He said the country's economic industrial policy should be anchored on innovation, research, and development. Masina also said the issues of transformation require a rethink by the country. 'The government was correct to look into the issue of Broad-Based Black Economic Empowerment (B-BBEE) and score cards, which must include owner management control and its development. However, ownership and management control have not moved in the way we have expected,' he said. MK Party Mzikayise Ntshingila said the budget failed to address the urgent realities. 'We find the budget of the Department of Trade, Industry and Competition deeply inadequate and misaligned with national priorities and out of touch with everyday struggles of our people,' Ntshingila said. EFF MP Chumani Matiwane said the department was marred by scandals and patronage under Tau, including the questionable awarding of the lottery operator licence. 'We doubt if this department can be trusted with even a cent under his stewardship,' said Matiwane. Rise Mzansi's Makashule Gana took a swipe at Tau for his inaction when the gambling operators were operating with impunity, when there was no national Gambling Board, and the National Gambling Council had not met for years. 'We face a gambling crisis. It is not a minor issue; it is an emergency. No country has ever gambled its way to prosperity,' Gana said. In response, Tau said they were working to address transformation issues. 'We have been working on stemming the tide. We have been addressing a number of challenges in particular sectors and sectors of concern.' Tau said the board of the National Gambling Board will be appointed soon and the National Gambling Council will meet next week. 'The board appointment is under way and will be taken to Cabinet.' He committed to ensure to subject the lottery operator licence was subjected to 'increased scrutiny and further accountability'.
The Citizen
03-07-2025
- Business
- The Citizen
Two-pot pension system disburses billions, but concerns linger
The two-pot system has two components – one for savings and the other for retirement. Many concerns over the two-pot retirement payouts have not yet been addressed, even as the system forges ahead with almost R60 billion disbursed to claimants since September last year. Prof Lucien van der Walt, director of Neil Aggett Labour Studies Unit at Rhodes University, said the system is a positive development, but it allows a small amount to be accessed annually. 'Given the situation that many working-class people face, it's better than being trapped in a downward spiral of financial instability and losses,' he said. Small annual access seen as both a benefit and limitation 'Previously, many people quit their jobs so that they could access their retirement funds, often leaving them broke later, and on the small government old age pension system.' Van der Walt also highlighted as one of the negatives of the system the fact that the money would be taxed on withdrawal at the usual tax rate. 'You will lose some of the money, even though it is your money. This is not the same as withdrawing cash from an ATM,' he said. However, trade union federation Cosatu described the pension fund reform as 'among the most transformational since the democratic breakthrough of 1994'. More than R57 billion has been paid to more than 3.5 million workers since the roll-out of the two-pot pension system. 'Fund operators reported unprecedented numbers of calls and applications from workers. While some funds' systems were initially overwhelmed, most coped well, with Cosatu and its affiliates intervening where workers experienced challenges,' said Cosatu's parliamentary coordinator Matthew Parks. Cosatu praises system rollout but slams employer defaults While the ANC-aligned federation praised the 'excellent progress' made in the system payouts, it objected to some employers and municipalities that had failed to pay over workers' pension contributions. ALSO READ: Two-pot retirement system: Almost 4 million withdrawals close to R57 billion Parks said some 7 700 employers had been fingered as culprits, with the largest numbers of such cases reported in the municipal, security and cleaning sector. He said Cosatu was 'deeply angered by over 7 700 employers who, through this process of providing relief to workers, have been exposed for having failed to pay over workers' pension contributions'. He said this is fraud and theft and must be dealt with by law enforcement agencies. 'Cosatu, with National Treasury and the Financial Sector Conduct Authority, continues to intervene with such delinquent employers to ensure this criminality is dealt with,' said Parks. Saftu raises alarm over lack of access before retirement But the South African Federation of Trade Unions (Saftu), while welcoming the system, rejected the rules surrounding the second pot – the retirement component. 'The two-pot pension reform could have been progressive if it were not for the rules for the second pot, which require workers to access it only at the retirement age,' said Saftu in a statement. 'This means a worker who is dismissed, retrenched or who resigns, will not access their pension fund in a lump sum until after they reach retirement age.' How the two-pot system works The two-pot system has two components – one for savings and the other for retirement. This meant 33% of the contributions would go into a savings pot and be accessible for withdrawal once a year, while 66% would go into the retirement pot, where it would be kept in the fund until the employee reached retirement age. ALSO READ: Poor financial literacy about retirement costing SA and consumers millions This is designed to ensure employees will be able to access their retirement savings to provide some financial relief, according to the fund operators. 'Reduced standard of living' Some regard this as a great idea in light of the ongoing economic crisis and financial strain that is burdening workers. The African Christian Democratic Party had cautioned workers that withdrawals from the savings pot should only be made for emergencies. 'It should also be noted that this withdrawal will be subject to tax and other administrative costs, resulting in one receiving less than what was applied for,' said the party. 'Additionally, a withdrawal from the savings pot will reduce the final total amount available at retirement and may result in a reduced standard of living.' Fund operators and watchdogs urge caution Last year, retirement fund operator Allan Grey told its clients that the idea behind the new two-pot retirement savings system is to promote the preservation of retirement fund investments until members retire. While Old Mutual, in one of its myth-busting explanations, said the system would be automatic for all retirement fund members. But Corruption Watch cautioned about the potential for fraud and corruption related to the two-pot retirement system, particularly regarding cybersecurity vulnerabilities and the risk of scams. The corruption buster encourages vigilance, reporting suspicious activities, and verifying communications from retirement funds. NOW READ: Dipping into retirement funds could cost more than you think
