Last month, Old Mutual Corporate reported that, while there were continuing high levels of withdrawals from retirement fund members’ accessible savings, early evidence suggested that the two-pot retirement system, introduced in September 2024, is boosting the preservation of retirement savings (see “Old Mutual see rise in preservation under two-pot system”). Subsequent input from retirement fund administrators Alexforbes and Sanlam indicates that they too are seeing signs of improved preservation, with the proviso that, after only a year-and-a-half of the system being in place, it is still too early to say for sure.
Vickie Lange, the head of solutions enhancement at Alexforbes Corporate Solutions, said although she could not provide specific figures, there were emerging signs that the two-pot system was working as intended.
“We’re in a closed period and unfortunately cannot disclose specific statistics related to preservation rates. However, we are able to tell you that analysis of our membership data shows an increase in preservation by number of members, as well as an increase in preservation by assets between 2024 and 2025. Although the two-pot system was implemented in September 2024, one-and-a-half years is a short time in the context of retirement savings. A longer period is needed to determine if this is a lasting trend or merely coincidental,” Lange said.
The forced preservation of two-thirds of contributions into the untouchable “retirement pot” is expected to improve preservation overall in the long term. Whether the new system has altered members’ voluntary decisions in the short term is more doubtful. For indications of such trends, one would need to look at what resigning members were doing with their vested savings, which falls outside the two-pot regulations, and what new members, who don’t have a vested component, were doing.
Anna Siwiak, the head of product development for Sanlam Umbrella Solutions, says initial data suggest that withdrawal behaviour on resignation has not slowed. “The majority of members still request the maximum allowed cash withdrawal on a resignation,” she says.
Siwiak also says it is too early to discern trends among employees who started working after September 2024, who only have a savings pot and a retirement pot.
“We are unable to draw meaningful trend conclusions at this stage. However, Sanlam will continue to monitor behaviour across both existing fund members and new entrants to the workforce post‑September 2024,” she says.
On the other hand, Sanlam is seeing definite signs of forced preservation.
“The forced-preservation element of the legislation has definitely increased the number of members we have seen move into our in-fund preservation options when changing jobs,” Siwiak says. “Many of these values are very small, as retirement pots are still being built up, but since members can no longer fully cash out on changing jobs, a larger portion of preservation is being observed.”
A key concern, Siwiak says, is that, as members change jobs, they may leave behind multiple small retirement components with different providers.
“Over time, these smaller balances may be eroded by fees, reducing their overall value. Members should therefore carefully consider whether consolidating their retirement savings, or transferring smaller balances to their new employer’s fund, may be a more effective approach to support meaningful long-term preservation,” she says.
Increased member engagement
A positive spin-off of the two-pot system, initially identified within the first few months of its inception, especially in funds using digital communication tools, is an increase in awareness among employees about their retirement savings.
Siwiak says the two-pot legislation has driven a significant increase in member engagement and education.
“Sanlam has observed strong participation in its Imali Zam member webinars, alongside increased usage of the Sanlam portfolio app and member portal. Members are being encouraged to actively consider the trade-offs between short-term access to savings and long-term retirement security. In addition, monitoring interactions with call centres and benefit counsellors indicates a notable rise in demand for financial guidance and advice,” she says.
The high rate of withdrawals from savings components remains an issue, however. One concerning trend is of members withdrawing savings to gamble.
Nzwa Shoniwa, the managing executive of Sanlam Umbrella Solutions, says the 2026 Sanlam Benchmark Survey, to be released later in June, will for the first time include a section tracking how many umbrella fund members have used their two-pot savings to fund gambling.
She notes that the gambling activity appears to be linked to financial stress, pointing to a troubling cycle of indebtedness, emergency withdrawals, and escalating gambling.
“The data may be beginning to reveal a set of behavioural pressures that the industry can no longer afford to dismiss as fringe concerns,” Shoniwa says.
