The two-pot system
Effective date: 1 September 2024
The two-pot system allows members to withdraw a portion of their retirement savings without needing to leave their job or retire.
As of 31 August 2024, 10% of your total fund value will be transferred to your savings pot, up to a maximum of R30,000.
You can withdraw a minimum of R2,000 from your savings pot per tax year, provided there are sufficient funds available.
Please note that each withdrawal will be subject to charges, including income tax and administrative fees.
Why do we need the two-pot system?
These changes are needed because many members struggle financially before they retire and are also not saving enough for retirement. Currently, members often withdraw their retirement savings in cash when they change jobs. Because of withdrawing from their retirement savings, they don’t have enough to live on once they retire. The two-pot system will help members keep their savings invested for their retirement.
Vested Pot:
No new contributions will be invested in this pot after 31 August 2024.
Savings Pot:
1/3 of all contributions received from 1 September 2024 will be allocated to the Savings Pot.
Retirement Pot:
2/3 of all contributions received from 1 September 2024 will be allocated to the Retirement Pot. The amount in the retirement component is preserved until the retirement.
What will happen to my existing retirement savings?
Before 1 September 2024, your retirement savings will not be affected by the new two-pot system. You can only withdraw cash from these savings if you leave your employer or retire.
After 1 September 2024, a small amount of your existing retirement savings will be moved to your new savings pot.
Some of your existing retirement savings will be moved to your new savings pot
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Members 55 years and older as at 1 March 2021 will have a choice to opt into the new system or stay in the current system.
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10% of total fund value as at 31 August 2024 will be seeded to the savings pot.
PLEASE NOTE
The information provided is accurate as of the date of publication and will be reviewed and updated on a regular basis to reflect any changes in legislation.