New pensioner rule changes planned for South Africa
Social Development minister Lindiwe Zulu has tabled the Older Persons Amendment Bill in parliament, introducing new age requirements and further protections for the country’s elderly.
Among the fundamental changes is the proposal to reduce the definition of ‘older person’ to 60 years of age – opening the door to further regulatory protections for older South Africans at a younger age. Under the current regulations, a person is considered an ‘older person’ from 65 as a man and from 60 as a woman.
“The proposed new definition ensures that all persons who are 60 years and older are equally entitled to the benefits and protections afforded to older persons in the principal Act, irrespective of gender,” the department said in its explanatory memorandum.
The bill also offers additional rights and responsibilities for pensioners, including protection from physical and emotional abuse, from both family and caregivers.
A significant portion of the bill also strengthens regulations around caregivers at home and retirement villages to ensure that older people are correctly taken care of.
The bill comes as the country plans to introduce significant changes to its pension and retirement system in the coming months. The National Treasury has proposed introducing a two-bucket retirement system that will give struggling South Africans access to their retirement savings, could reduce immediate hardships and perhaps encourage a greater willingness to utilise retirement funds.
The proposal envisages a ‘two-pot’ system under which members would be allowed to access up to a third of their net retirement fund contributions and accrue investment returns on an annual basis to provide short term financial relief.
This will be accompanied by the requirement that the remaining two-thirds are preserved over the long term, which will improve retirement outcomes for the majority of fund members relative to the status quo.
Treasury is also in the process of amending pension fund regulations to allow for more significant infrastructure investment.
In March 2021, the Treasury published its draft amendments to Regulation 28 of the Pension Funds Act for public comment, detailing the projects in which South African pension funds could soon invest.
Treasury said that the proposed review of Regulation 28 is informed by calls for increased investment in infrastructure given the current low economic growth climate.