The two-pot pension system, designed to allow early withdrawals, poses a significant risk of indebting workers, much like the pervasive alcohol and gambling adverts that continually target the working class and the poor, entrapping them in a cycle of debt.

For many black South Africans, this echoes the struggles of previous generations who laboured tirelessly for minimal wages, only to be left without the means to provide a better future for their children. Now, by offering the working class the option to withdraw from their pensions early, we risk leaving even less for their children’s future.

The historical imbalances have not been adequately addressed, and Black Economic Empowerment (BEE) initiatives have fallen short of rectifying these disparities. This two-pot system threatens to marginalise the poor further. For instance, in the case of workers versus Akani, under the MEPF (Municipal Employees Pension Fund), there are allegations that pension funds, purportedly invested in properties worth millions, have not provided workers with the promised returns. Despite being taxed, retiring workers do not receive the full amount owed to them. Corruption and nepotism within certain pension funds, such as Akani, further exacerbate this issue, with examples like CEO Letjane paying his late wife, former MEPF principal officer Margaret Le Grange, R22 million over five years. This, alongside hiring the same marketing manager for both Akani and MEPF, suggests a conflict of interest and raises concerns about the manipulation of pension funds.

The government stands to gain significantly from the tax implications of this system. For example, if an employee withdraws R30,000 and is taxed R6,000, with an average workforce of 6 million, the government could collect R36 billion from taxpayers. Meanwhile, workers continue to be short-changed by corrupt pension funds, receiving far less than they are owed.

COSATU and its structures need to scrutinise this two-pot system and push for amendments to ensure that it does not become yet another tool to exploit the working class and the poor. The system must be reformed to protect workers’ future savings and ensure fairness in the distribution of pension funds.