Two-pot retirement system
On 1 September 2024 the two-pot retirement system comes into operation
Effectively, your retirement savings will comprise of three pots, the vested pot, savings pot and the retirement pot.
Two-pot News Articles
All three pots
make up your
retirement savings
The first pot will contain your current savings. Your future contributions to your retirement fund will be split into the other two pots. This means, your retirement pot is kept until retirement, the other pots are accessible before retirement, while also allowing you to gain limited access to your future savings pot for emergencies while you are still employed.
① The vested pot
– Current savings
The value of your retirement savings accumulated up to 31 August 2024
The money in the vested pot will be dealt with as before implementation
You will be able to access it when changing jobs
However, you will no longer be able to contribute to this pot, unless:
- you were a member of a provident fund;
- you were 55 years or older on 1 March 2021;
- you are still contributing to the same provident fund as at March 2021, and
- you did not elect to contribute into the two-pot retirement system.
The savings pot
– Seed amount and future savings
10% Of the value in your vested pot accumulated up to 31 August 2024 will be your opening balance
This opening balance is known as the seed capital, but may not be more than R30 000.
⅓ rd From 1 September 2024 one-third of your retirement contributions will go to the savings pot
You do not have to withdraw from your savings pot if you do not need the money. What you do not withdraw from your savings pot during your membership will form part of your retirement lump sum when you retire.
You can withdraw from the savings pot, for emergencies, once in every tax year
You will be able to submit a withdrawal instruction for this seed capital to be paid to you if it is more than R2 000
An administration cost to process the withdrawal will also be deducted
Seed capital amount will be taxed at your normal tax rate before it is paid to you
The retirement pot
– Future savings
⅔ rds From 1 September 2024 two-thirds of your contributions will go to the retirement pot
You will not have access to the retirement pot when changing jobs or during emergencies.
You will gain access to the retirement pot when you reach the age of retirement
You may only receive the money in the retirement pot as a monthly pension when you retire