Two-pot retirement system: who will be the winners and the losers?

Posted on 162 Comments

The two-pot retirement system will improve outcomes for younger fund members who invest most of their contributions under the system, but it will not help members who are closer to retirement and who have been cashing out their savings regularly. In fact, the system could result in even worse outcomes.

This is according to modelling by Sanlam that was published in its 2023 Benchmark Survey.

National Treasury plans to implement the two-pot system on 1 March 2024.

Although it is called the two-pot system, members’ retirement savings will, in fact, be apportioned among three pots after implementation:

  • The retirement pot, to which two-thirds of contributions will be allocated. The contributions and investment growth must be preserved until the member retires.
  • The second pot is the savings pot, to which up to one-third of contributions can be allocated. Members will be able to access these savings without having to resign from their jobs.
  • The vested pot will house the retirement savings a member has accumulated before the two-pot system is implemented. These savings will be subject to the current rules of a fund.

According to the survey, South Africans have mixed feelings towards the two-pot system, with 57% of the 500 respondents sceptical, wary of the long-term impact on their retirement savings.

However, 21% said they would consider withdrawing funds in an emergency, while 13% expressed a willingness to access a portion of their benefits. A small segment, 8%, said they probably would take advantage of the new system. A resolute 23% stated they would not touch their savings at all.

Sanlam said the two-pot system has two conflicting objectives:

  • Increase preservation rates to improve retirement outcomes; and
  • Provide members with access to their retirement savings “in cases of emergency”.

With the above in mind, Sanlam conducted some modelling to evaluate the impact of the two-pot system on younger and older retirement fund members.

Impact on a younger member

Sandra joined a retirement fund through her employer at age 20. She resigns and changes jobs every seven years until she reaches the age of 50. Every time she resigns, she withdraws her all retirement fund savings.

At retirement, Sandra ends up with retirement savings of R2.7 million. This scenario assumes an annualised investment return of 11%, a contribution rate of 11%, a salary of R122 000, and salary growth of 3%. Sandra will retire with even less if she continues to change jobs and withdraw her savings after the age of 50.

The two-pot system is implemented four years before Sandra joined a retirement fund. By then, she has R85 000 in her vested pot.

Sandra withdraws the funds in her savings pot throughout her career as the cash becomes available. She also cashes out the money in her vested pot by resigning. Only the money in the retirement pot is untouched – because it cannot be accessed until retirement. In this scenario, Sandra accumulates R8.6m by the time she retires, which is 3.25 times better than the outcome when she could cash out all her retirement savings. (All the other assumptions are the same.)

Sandra can improve her outcome even more by not withdrawing from the vested pot. If she accesses the funds in her savings pot only, her retirement savings will increase to R14.8m, 5.5 times better than her current outcome of R2.7m.

The best-case scenario for any member of a retirement fund is not to withdraw any retirement savings. If Sandra does not exercise her option to withdraw from the savings pot and fully preserves all her assets throughout her working life, she will retire with R19m, or 7.2 times more than the current situation.

This modelling indicates the compulsory preservation built into the two-pot system is expected significantly to improve younger members’ retirement outcomes, even in the worst-case scenario, where a younger member withdraws from the vested and the savings pots.

Impact on an older member

Thabiso joined a retirement fund at the age of 20. He has resigned from his job every seven years and withdrawn his savings.

The two-pot system is implemented when Thabiso is 51.

At age 50, he stops resigning and cashing out his retirement savings, but he continues to withdraw from the savings pot.

When he retires, Thabiso has retirement savings of only R1.4m. This scenario assumes an annualised investment return of 11%, a contribution rate of 12%, and salary growth of 3%. If Thabiso had fully preserved his savings throughout his career, he would retire with R19m.

One way in which Thabiso can improve his retirement outcome is not to make withdrawals from the savings pot from the age of 50. This could improve his retirement savings by about R300 000.

The problem is that many retirement fund members are in Thabiso’s situation, and the two-pot system will solve their predicament. Indeed, the ability to access their funds in the savings pot without having to resign could make their situation worse.

The modelling highlights that the ability of the two-pot system to improve retirement outcomes hinges on a long term of contributions to the forced preservation retirement pot.

Complexities facing trustees

David Gluckman, the chairman of the Sanlam Umbrella Fund, said the two-pot system is the most complex piece of retirement legislation to be introduced in South Africa. He said the complexities and burdens it will place on trustees will fuel the trend towards umbrella funds.

The Benchmark Survey highlighted the challenges that trustees will face in setting and refining their funds’ investment strategies to accommodate the two-pot system.

Trustees will have to consider their investment objectives, Regulation 28 implications, liquidity risks, and their membership profile. Importantly, members’ financial sophistication, level of preservation, contribution rates, risk profiles and tolerance are all important in decision-making, as these will drive the future behaviours of members.

Trustees could consider retaining the current long-term investment strategy for both the savings pot and the retirement pot. The risk with this option is that members wishing to withdraw their assets could crystallise their losses if they are invested in an aggressive strategy that has been underperforming.

It is likely that product houses will have issues with accommodating the required liquidity in some of their portfolios, particularly those with higher exposure to alternative and private equity investments.

The second option is to offer a lower-risk-profiled portfolio for the savings pot relative to the retirement pot.

The risk here is that members wishing to remain invested and not withdraw any savings until normal retirement age will face lower investment returns on their assets. This will have severe consequences for their retirement fund savings in the long run. Effectively, members who preserve everything will be punished. Returning to Sandra’s high-road two-pot scenario, her outcome may be impacted significantly: a reduction in retirement savings from R19m to R16m, assuming money-market rates on the savings pot.

This is an important point, and the industry should aim not to disadvantage one group of members to bring benefits to another group.

There are at least two ways in which trustees could combat this risk:

  • If trustees consider a lower-risk-profiled portfolio for the savings pot, the retirement pot could be invested more aggressively to compensate for the lower expected return.
  • Instead of using money-market strategies, trustees could consider an asymmetric strategy that offers capital growth with relatively lower levels of volatility.

A third option is to consider providing member choice portfolios for assets invested in the savings pot, coupled with a “default” savings strategy for members who do not wish to choose their own portfolios. Although this would not be the direction taken for most funds, it could be an option for mega funds that have higher governance models.

Although this option would give members the freedom to make their own decisions depending on their shorter-term needs, the risks cannot be ignored. For instance, most members may not have the financial sophistication to make these complex investment decisions. Another issue is that the risk of switching between portfolios could result in the crystallisation of losses.

162 thoughts on “Two-pot retirement system: who will be the winners and the losers?

  1. Welcome to another version of the NHI.
    All contributions should have to remain invested even when transferring between employers,with the exception of a life-threatening medical event whereby perhaps as much as 1/3rd of the invested funds may be utilised to pay for these etc. Stict protocols to apply.
    This so called 2/3 pot system will guarantee poverty in most cases.

    1. I need to cash in my retirement 1/3 of this .Im financial battling since repo rate affects,the house and car repayment has increased drastically in a short space of time.My pension funds will help me with tuition fees.

      1. I am 53 turning 54 in Cape Municipal Pension Benefit , 30 years service with R6 million in savings – If I withdraw 1/3 of my pension …….How much will be that in monetary value ?

        1. That’s about R1.8m.

        2. What are guarantees that those who choose not to withdraw any funds and still have more years in the system – that their funds will be safe and available at the time they have to exit the system?

          1. The same “guarantees” that they have now. Retirement funds are governed by legislation, particularly the Pension Funds Act.

    2. These kind of decisions are done by people who are anti poor and who don’t understand how provident funds has helped how many poor people either to build house buy stands or start business as the banking or lending system don’t favor or support low income earning black people. This peace of legislation is going left Insurance Funds with millions or not billions of unclaimed funds.

  2. Many people who are currently members of Pension funds are looking forward to the 1st of March 2024 to claim from their current 1/3. Your comment please

    1. This is a very good idea to people who knows what they want in life. Problem is one people does not listen what is said by advisers they choose what to listen instead of listening to everything from advisers. Especially government employees, yoooh 🙉disaster.

      1. I suggest that ,is ok to cash out some money rather than losing houses and even business, Money is needed now because when you are old you don’t have much activity to so ,one will just sit and spent it all.i agree I need my cash now while I m still having business plans .

        1. Cash out and settle debts and use another to open a cash generating business for your pension. Unfortunately, pension funds will feel the pinch as more liquidity will be needed to make on their promise. People will cash in panic.

          1. I have R500 000
            How much will it be 1third withdrawal?

    2. With the current corruption, young government employees thinks that by the time they retire,,they won’t find any moola there,,and also the our lifestyle makes me think that we might not even reach 60 yrs

      1. Not against legislation. Only want to see people when withdrawing the 1/3 use it for the intended debt pay off and not for luxury/parties.
        How will trade unions educate their members on this important decison?
        What guidelines will be part of the legislation that HC and Unions need to embark on?
        It is a catch 22 situation, hope members use it to better their living standards and refrain from accumulating debts again which will put you in the same situation.

        1. The intended R25k will only make things worse
          Imagine someone suppose to give you R100k instead they pay you in R5k per month…it will discourage ppl to make withdrawal and in return it
          will benefit fund managers

          1. My current pension contribution is 1.7m, how much of 1/3 I can qualify for?

          2. Are you contributing R1.7m a year, or is R1.7m the value of your retirement savings? If the latter, R25k will be transferred to your savings pot next year.

        2. Can you make advance withdrawal from this savings pot like just on 1 March 2024 take out R25000 and what is the impact?

          1. The withdrawal can be from 1 March 2024, when the two-pot system takes effect, not before. The withdrawal will reduce your retirement savings.

          2. Can you explain to me, If I have R450000 in my pension, how mush for 1/3 for that pension?

          3. One-third is R150 000.

      2. With good plans its a good thing to withdraw 1/3. Example if u take R25k and grow it by doubling it 4 times in period of a year. The following year you doubling the doubled amount 4 times in previous year. In 10 years you will good money. That’s my opinion.

    3. I can’t wait

      1. My current pension contribution is 1.7m. How much will be my 1/3?

        1. About R510000

      2. No one unless they are medically challenged does not have a plan after retiring say at age 63 some of us pass for late forties and are fit, we need our money now to prepare for that life out of the workplace, after paying off existing debts with 1/3 the 2/3 will just be an added for me after I have purchased my farming equipment, secured my farm and living off the land and not my 2/3. Looking forward to the 1st March 2024!!

    4. As a South African, who gas been contributing to my provident fund, for almost 25 years, i feel that it would be best to have access to a portion of my provident, to relieve me, and start afresh, that would minimise the thought of resigning in order to get my money.

      1. Yes I agree,we are sinking in debt, with the so called debt busters, milking workers their money.let me get my money and sort out my mess and be relieved.
        Danish and klaar

        1. True that

    5. I’m also patiently waiting for the 1st of March in order get my portion and improve my financial status

      1. Beware of the tax implications. The proposals are mute.

    6. Ek werk vir die Munisipaliteit 40 jaar, ek is 59 jaar oud, en ek wil graag van nou af skuld vry, n huis van my eie besit, en my huidiglik situasie verbeter, my hoe blood en depressie verminder. Ek wil graag my 1/3 neem om dit alles te does. Ms STP Williams

  3. At least we are going out of Abamashonisa to the real world where servants must enjoy their fruits of labour while they are active not waiting for 60

    1. Where is that clause which said one will be allowed to widraw once in a period of 12 months plz put that clause bcoz its very important

      1. National Treasury published the latest two-pot draft legislation on Friday:
        Page 5 of the Draft Explanatory Memorandum: “A member will be allowed to make a single withdrawal within a year of assessment.” [year of assessment means tax year]
        Paragraph (a) of the definition of “savings withdrawal benefit” on page 8 of the Draft Revenue Laws Amendment Bill: “the member’s right is limited to one withdrawal during a year of assessment”

        1. The idea is good, many of us can benefit from the new system, my fear is one that’s corruption which seem to be unstoppable, particularly with the current rulling party. We need to be assured that the dirty hand of corruption will not excess the fund. On that regard I’ll give it a thumbs up

      2. Once in 5 years please. Most people lack financial discipline so the longer the period the better. This will force us to make well calculated decisions before making the next withdrawal.

        1st withdrawal, “I will ‘blew it'”. My bucket list has a lot if countries to tick starting with Greece 🇬🇷

        1. 25k is actually a slap in the face if you look at it. How is this small amount of money going to help anyone ? The system is designed to keep you in debt. They where never going to allow us to access the full 1/3 of our money it makes no sense to have people debt free

          1. It is indeed a slap in d face and it still going to be taxed. How much of R25K will be left after tax. We need the whole 1/3 it is our money, we have worked hard for. They must give it to us now when we need it m, while we can still enjoy it. We won’t need that much aftr age 60

  4. This Will help the pooer People to recover, it is gud thiking for government

    1. This is good for public servants. Atleast people will have freedom.

    2. You will not recover with R25k we need the entire 1/3 to restructure our lives and you still have the other monies stored and you continue to contribute….why are they moving goal posts …I am sure when the negotiations started this was not the intended results labour must intervene

      1. I have R500 000
        How much will it be 1third withdrawal?

    3. National Treasury misleading the public. They failed to let Government workers access their benefits during covid-19. Who can survive with R25k. Rather withdraw all your monies and open a business for pension

      1. I’m 46 so for me they can build from 25k …and payout the other money from my fund….They say they want to help..but the cost of living for 25k and when you withdraw that 25k it’s taxable…only my 2cents..And yes corruption also make me think twice in government..correct me if I’m wrong

  5. How I wish that funds trustees and tresury could be bold enough and go as far as incorporating the principle of ‘economic redress’ in the whole envisaged two pot system by inter alia recommending (via legislation) a lesser tax obligation and fund admin fees to the Historically Disadvantaged Individuals!! Otherwise truth be told, practical reality on most people’s lives mitigate against the intentions of two pot retirement system. Enabling people to lead meaningful and acceptable living standards even prior to retirement, cannot at all be equated to ‘instant gratification’

  6. I’m already 60,and still working. Do I qualify for a two pot system.

    1. You will qualify once if you are still working when the two-pot system is implemented. Treasury plans to introduce the system on 1 March 2024.

      1. Can’t wait as well to access the two pot system cause I have bills that needs to serviced

      2. I’ve heard people say that government employees won’t be able to withdraw their 1/3 from the GEPF because it’s not part of that system. How true is this?

        1. That is not correct.

    2. Retiring in January, where do I fall?

      1. You will retire before the two-pot system is implemented.

    3. Just don’t touch anything you are there already. I’d rather go for a short term loan if under pressure.

    4. Yes you do is your money,what are going to so with it at 70 ?
      Cash out and have fun,buy live stock buy shares and enjoy your money.

    5. Just go on pension and avoid double tax.

  7. Will the two-pot system also apply to existing RA’s from but as from 1st March 2024, and may the 1/3 removed funds, be re-instated at a later stage?

  8. Will the two-pot system also apply to existing RA’s from as from 1st March 2024, and may the 1/3 withdrawn funds, be re-instated at a later stage?

    1. When the system is implemented (1 March 2024), fund balances in existing RAs will go into the vested pot and will not be accessible until age 55, per current legislation. The integration of legacy RAs into the two-pot system is one of the key issues that has yet to finalised.

  9. Need to understand if by the 1st of March 2024 funds will be available in the savings pot.i have 15 years in service and how much if you can give example ?

    1. According to the latest draft legislation, you will be able to transfer 10% of your accumulated savings, limited to R25 000, to the savings pot on 1 March 2024.

  10. Majority of the public servants don’t qualify for home loans,if this concept could cater for that .Then it will be much better.

    1. Amen to that …unlike you wait until you get you 1/3 to upgrade the current house structure some they don’t even live long enough after the age of 65 to enjoy they money

  11. This is a very good idea to people who knows what they want in life. Problem is one people does not listen what is said by advisers they choose what to listen instead of listening to everything from advisers. Especially government employees, yoooh 🙉disaster.

  12. The two port system will on the grand scheme of things assist those that want to use their funds in investments, settling bonds and other debts as well as utilise the 1/3 for things like university fees for kids. However, for those that want to have a good cash flow and use their funds for daily requirements, I don’t think, it will be good.

    1. Gepf members also qualify?

  13. Im 55 and 20 years service in goverment, will i only have access to 25k on implemetation date of the two potsystem as iwould rather have prefered to settle my bond and used the bond repayments to add to my retirement fund untill retiremet age of 60

    1. Correct. In terms of the latest proposals, you can transfer a maximum of R25K to your savings pot and withdraw it from the implementation date.

      1. Hi is this only for gorverment workers or will it apply for the private sector as well

        1. It is for all retirement funds.

      2. What does one do with 25k, 25k wont be able to bring relief, 1/3 will.

    2. Good move

  14. Treasury should make sure that SARS doesn’t take more than 5% on this two component system so that consumers may benefit on this savings side

  15. What is a Vested pot? Will one be eligible to withdraw from that in march 2024? And if so how much will one be eligible to withdraw from it?

    1. The vested pot is the value of any retirement savings you have accumulated until 29 February 2024. As is currently the case, the only way to access these savings is to resign from your job or retirement fund, which will enable you to withdraw as much as you want, although tax applies to amounts above R25K.

      1. I’m still lost about 2 pot system can anyone assist with breakdown ,for an example come 2024 1st March I have R500 000 retirement balance,then how much I will be able to withdraw?

  16. I’m still lost about 2 pot system can anyone assist with breakdown ,for an example come 2024 1st March I have R500 000 retirement balance,then how much I will be able to withdraw?

  17. I’m still lost about 2 pot system can anyone assist with breakdown ,for an example come 2024 1st March I have R500 000 retirement balance,then how much I will be able to withdraw?

    1. You can transfer 10%, up to R25 000, to your savings pot and withdraw it. 10% of R500 000 = R50 000, but you are limited R25K, so you can transfer and withdraw R25K.

      1. Thanks for clarification according to my Union they said our of R100 000 I can access R33 000

        1. It is important to clarify that the R25K withdrawal is based on the transfer from your existing (pre-1 March 2024) retirement savings. You will be able to withdraw as much as you want once a year depending on how much you have in your savings pot. Each year from 1 March 2024, one-third of your contributions will go to the savings pot, and you can withdraw all of it.

      2. Thanks for clarification according to my Union they said out R100 000 I will be able to get R33 000

        1. The new withdrawal proposal was announced on Friday. The previous proposal suggested a higher amount.

    2. Maximum R25k it’s standard
      Unless we instruct our labour movement to go back to the drawing board because this is not useful

      1. True that

  18. R25K is a meager amount to withdraw if I would want to utilize the money to settle my mortgage bond and plough that saving into my retirement fund. Is there a possibility that the minimum withdrawal amount of R25K could be adjusted? I’m currently 55 and if I retire R500, 000 of my payout will be exempted from tax, why will I not be allowed to access R500, 000 instead of the R25K?

    1. The public has until 15 July to comment on the proposed legislation. You should motivate for a higher withdrawal amount.

    2. It is important to clarify that the R25K withdrawal is based on the transfer from your existing (pre-1 March 2024) retirement savings. You will be able to withdraw as much as you want once a year depending on how much you have in your savings pot. Each year from 1 March 2024, one-third of your contributions will go to the savings pot, and you can withdraw all of it.

    3. Yes 25k is too low to make an impact at helping us getting anything done, the 1/3 should be based on entire savings accumulated over the years!

  19. I see on the scenarios that special attention is paid to an employee who resigns every 7 years and one employee who is already in their 50s.
    What is to become of an employee who started working at age 20, never resigned and is now 15 years in the same job with no intention of resigning in the next 5 years. How does the 2 pot system impact that employee?

    1. The more time your savings are left untouched from the day one starts working, the more the new system will benefit the employee. The modelling was done to test the impact of regular withdrawals, which currently can be done only by resigning. No one will have to withdraw their savings from the savings pot under two pots. People who withdraw nothing or very little will benefit as they do under the current system.

  20. Sanlam is going to make serious money with this system🤞

  21. So with the current system, once you resign you are able to take your pension if you wish to. Will this be the case once the 2 pot system Kicks in?

    1. You will be able to take the pension in your vested pot if you resign. The vested pot will contain the retirement savings you accumulated up to 1 March 2023.

  22. The decision to limit the withdrawal amount to 25k does not make sense.

    1. No it doesn’t and will not stop people from resigning to access their retirement money.

  23. The gepf members also gualify to withdraw their money

  24. Most people want to settle bonds. Limiting the existing RA to 25k doesn’t make sense. Why not transfer 1/3 of the existing RA, it will make a huge difference to settle the debt.

    1. Absolutely why can’t 1/3 of the money in vested pot be available for a member to withdraw

      1. That is true, 25k is too little you cannot pay your bond off. One third should be access by people.

    2. Interest rate and the failure of government is causing more harm to the society. Any means to settle debts would be beneficial to South Africans given the current situation. The main issue is not accessibility of the pension but rather to better the financial situation and the lives of ordinary people.

      A normal and sane person would know that R25 000 will not really address the challenge the people are facing now. This suggest the new system will simply benefit the elites once again while impoverishment is exacerbated.

      The best approach would be to settle debts on behalf of the people using their pension and remove the current colonial red tape system. Its best to help people get out of debts and allow for minimal funds.

      The biggest problem people eagerly wait for the 1st of March 2024 is as a result debts and the escalating interests and bad economy neither is it for the fun of accesibility assomblief …..

      1. So true!

      2. Absolutely true. This will entirely be on the hands of National Treasury. They have no clue on what they are doing. Watch the space.

    3. Bra Mike the aim is not to help you but to keep you indebted while you slowly lose your money
      The government is cruel

    4. I fully agree, 25k wont bring any relief. Also how does one go about making public comment as it is currently open for public comment till somewhere in July.

  25. If indeed I understand correctly, come the 1st of March 2024 I can only withdraw a maximum of 25k, then the two pot system’s primary objective is to impoverish the concerned working class.

    1. again making fools out of career workers.been working for 33 years and being told it would give relief from debt? bullshit !is 25k then a 1/3 of my pension fund.25k wont do nothing te releave debt.again the rich prevailed.they keep us in debt and the whole exercise was a big waste of time .big faT be truthfull ,you get nothing to help you .we must ask ourselves who lose the most when you pay your homeloan off or even pay debt off then you will find your answer.telling poeple they will not be able to manage their own money is just insulting. i will rather resign then to utilize a insult

      1. Fully agree

      2. There I basically no “third” about it…come 1st March we will all irrespective of what you already have vested be allowed to take 25k of your own money – what relief would that give…please rethink….where is our money kahle kahle?? That gives more reason for one to resign or retire and take my money out and will definitely better my life instead of languishing in debt!

        1. We can block this policy from implementation by lobbying parliamentarians.

    2. true

  26. The issue we have with our pension fund is that we want to settle bonds and start afresh. Where is the website for us to comment about that? My plan now was to buy R1.8m bond cash because I have 700k in my pension fund and selling the current bond at 800k.

  27. Does this include government employees under GEPF?

    1. Yes.

  28. What happens if you lose your job after the two pot system kicks in and you are still 45 and had been employed for 25 yrs.Are Yu going to be able get your money or you should suffer until you reach age 60?May someone explain to me pliz.

    1. You can withdraw savings from your savings pot. But if you have already made a withdrawal in the tax year, it seems you will have to wait to the next tax year. In addition, if you are 45, you will (or should) have money in the vested pot (money accumulated before the two pot system). You can withdraw all the money in the vested pot.

  29. First of all, thank you for the time to write this post and secondly for responding to so many questions.

    Reading the responses has clarified so much for me and put a damper on my plan of not having to resign in order to wipe out my homeloan and then using what I would have paid to put my kids through Uni.

    I’m not that young anymore and if I understand everything correctly, all my contributions until end of March 2024 will go into the vested pot from which I would be able to withdraw a measly R25,000.
    Thereafter on a monthly basis 2/3 go into the retirement pot and the other 1/3 into the savings pot, which I would have access to after a year/once a year.

    That doesn’t help my situation at all, but it does give me an opportunity to educate my kids about the advantage of this 2 pot systems for them, if they do not touch the savings pot throughout their careers. Assuming that I somehow get them through Uni and they find employment.

    1. The 25k will not assist me with debt why can you pay off our debts and even if you don’t give us nothing from pension because we suffering, we have school fees that are behind, housebond.

      Or other thing that you can do increase pension withdrawal to R100 000.

      Because the R250k is an insult is not going to do anything our life and we know that pension is made for saving but know we can cope any more.

      Please just go back to the negotiation and we are asking you please we are dying so much debt.

  30. I’m confused does this mean my current fund balance cannot be withdrawn after the first of 1 March 2024 the so called Vested Pot?

    I worry because the existing funds are sort of a safety net or nest egg for many in case you loose your job and can’t find employment worst case it can be used to settle mortgage and debts if you have enough.
    If that is not available ever or till you 55 it limits peoples flexibility and I for one would resign my current job then and take my chances with my funds if that’s the case.

    This part doesn’t seem clear and could trigger resignations?

    1. As is currently the case, come 1 March 2024, you can only access the money in the vested pot by resigning or if you are retrenched (except with an RA fund).

  31. Been working for 29 years, struggling to pay my bond. I was hoping that I will be able to settle my bond with this two pot system. But I think it’s better I resign than to wait for 25k.

    1. A two pot system is too late and even worse they were told to change it to be R25 000, because 1/3 won’t be accessible since has been invested for these companies to obtain exuberant profits, and does not adress the plight of the working class. The working class will be always be in debt through the working life and heavily taxed by government (taxes are for them to support their lavish style, of which they dnt even account for.) our government won’t make any law that does not favour white monopolistic capitalist businesses. These companies in administration are corupt to the core and they ensure their corruption is protected by law and government.

      1. National Treasury protecting the capitalist. Government wanted to introduce a mandatory retirement system and they couldn’t support the idea because they are protecting the financial industry. In turn, they come with the system that was meant for the workers in the informal sector and imposing it on the formal workers. There so called saving pot is a slap on the face. If you ask them why R25k, you will certainly receive no answer. This proposals was never consulted but shoved in people’s faces. Just because it s Treasury people think its a good policy. Good luck. Rather withdraw and use your money for business that will work for you in retirement.

  32. What about GEPF members?

    1. Defined benefit funds, such as the GEPF, will be included in the two-pot system.

  33. Hi, please increase the amount from 25k,it will really make NO difference in financial problems that we are facing.

  34. Gepf members also qualify?

    1. Yes.

  35. Where can I send comments because 25k is too little

    1. Comments must be sent to National Treasury at and Sars at by close of business on 15 July 2023.

  36. R25000 is not much, but at least people will be able to build a four roomed house,instead of taking a loan from a bank. I can’t wait for March 2024.

  37. Mgf provided fund is better than pension fund cause you can take your lump sum when you retire or resing that pots they are taking about is just for cooking those who left from COVID and ate all the money 🤑💰 cause it will be forfeited back to government why they don’t stop PAYE deduction before they took decision for people money it’s not there’s why worry about money which is not for them they want to Chaw it that’s it.lets start afresh and get what we have already accumulator let’s see 🙈 if they will afford to pay us all if we resing they got nothing but to much say the see opportunity to pay their foreign Dept with our money they are crooks jooo agman.

  38. One more thing this money is going to who because we know this money is somewhere at stock exchange making millions for ,guys like old mutual,Momentum, greyhound,Alexander forbes,sasfin,discovery,and other business monguls while owners of the money are trapped in debts.

    1. Let’s assume i have R1,2M at GEPF on the 01st March 2024 my 1/3 is assumably R400.000. How much wl I be allowed to withdraw from my R400k in a year?

      1. On 1 March 2024, all the savings you have accumulated until the two-system is implemented will go into the vested pot. The vested pot is governed by the existing retirement fund legislation, so if you want to withdraw, you will have to resign. The one-third allocation to the savings pots starts with savings made from 1 March 2024.

  39. If there is intention to assist south Africans going through constant inflation and bad economic times with debts ever increasing, accessing their vested pot to settle those debts would be ideal for those who have found themselves in a genuine financial crisis while they still alive.

  40. These statistics are false, 57% are skeptical. It’s a lie, period.

    We need money, but I can tell how the media is in cahoots with government to hide the truth about what is really happening about people’s pensions.

    Nevertheless truth will prevail.

  41. Is the two pot system also applicable to foreign nationals with permanent residence. I have twelve yrs now and am 58 yrs

    1. The system applies to members of South African retirement funds. It doesn’t matter your residency status.

  42. Clarifying the question above. I have 12yrs of service and 58 yrs old

  43. So if my retirement fund saving are about R300000 on the 1st of March 2024, is that all going to be transferred to vested pot and my savings pot will be R0.00 and can only start withdrawing when it have more than R2000?

    1. Correct.

  44. so then it is useless we waited so long for this to take place so you wont be able to take out on money already saved ? vest pot shows 135k non vested 85k i need to know will i bea bale to take out one third on my fund i have or does it only start to go in to 2 pots from 1 of mARCH 2024
    or is exsting money included to take out

    1. The one-third/two-thirds contribution split between savings pot/retirement pot starts on 1 March 2024. Only the R25K of the accumulated/existing savings can be transferred to the savings pot on 1 March 2024. Thereafter, once a year, you can withdraw whatever is in the savings pot.

    2. There are no vested and non-vested pots currently. If your total savings accumulated by 1 March 2024 is R220K, it all goes into the vested pot. You can transfer up to R25k of your vested savings to the savings pot on 1 March 2024 and withdraw it in the first year.

  45. i still dont understand show 220k total 135k vested non vested 85k so what will you be able to take out ? on the 1 of march 2024

  46. There I basically no “third” about it…come 1st March we will all irrespective of what you already have vested be allowed to take 25k of your own money – what relief would that give…please rethink….where is our money kahle kahle?? That gives more reason for one to resign or retire and take my money out and will definitely better my life instead of languishing in debt!

  47. 1. So if i resign after the 1st of March 2024 will I get all my money from all pots at the same time or will have to wait for pension year?
    2. What will be deemed a retirement age? 65?
    3. What if I’m retrenched, will the money be held until the retirement age or will it be paid?

    1. 1. If you resign, you can take the money in your vested pot and savings pot (although you don’t have to resign to take it). Money in the retirement pot remains until retirement.
      2. Normal retirement age is determined by the rules of your fund.
      3. If you are retrenched, you can take the money in your vested pot but not in the retirement pot.

  48. I have one question, if I have transfered R25K to my savings pit and withdraw 5K on the first year, will I have to wait for the next tax year to withdraw again? Am I allowed to withdraw all R25K at once?… Anyway 25K is peanuts we need it to be more than that at leat limit R100K which would make a difference. R25K will only be used to buy dessert

    1. Yes, you may make one withdrawal a year, so you shall have to wait for the next tax year to withdraw again. You can withdraw the entire R25k at once.

  49. I think it’s time for us South Africans to be open minded about this 2 pot system thing.There is nothing worth celebrating here.If the President of South Africa is going to put his signature and sign this draft as a new law,I don’t hesitate to tell you that this will be oppression at it’s worst level to the people of South Africa .I wonder how can someone be so grateful to get R25,what is R25k after all?.I for one think South Africa citizenry should stand by one another and reject this 2 pot with all we can.Look at this corruption whom really can you trust with your money?Look how the Ministers abused tax payers money during Covid 19.They looted millions only to resigne,and what happened to them ?NOTHING .The government should jus leave our money alone.Though the money doesn’t grow so much with our current photifolyos but you can rest assured that you are going to get your money once you live yo job in whatever way.We got plans for our money that’s why we work so hard for it.The government should stop pushing us into poverty and debt.On the other hand the Reserve Bank is ripping us off with it’s interest hikes under the name of protecting the Rand and controlling inflation.The government is quiet coz they benefit from it.They make millions by stealing from the poor and the middle working class.Now they are coming up with plans to steal even more.We need our our money to clear our bonds and debts.We also want a stress free life.South Africans let’s wise up,how can we work so hard and only to believe someone who tells you that he wants you to live well in retirement.Be in control of yo money and use it wisely. Government “HANDS OFF OUR MONEY”

  50. We want to access money can assist to pay off debt, renovate or extend our homes not R25000, that is useless.

  51. Can u please clarify me, if my 1/3 is 100k and a withdraw 25k on the 01 march 2024 as is the limit. In the next year can I withdraw the remaining 75k or I will only withdraw a maximum of 25k again? Can I withdraw 75k + the amount contributed in that year.

    1. In the second year, you can withdraw only a third of what you contributed between 1 March 2024 and 1 March 2025. The withdrawal amount after implementation date is based on your contributions – one-third goes to the savings pot that can be withdrawn.

  52. I think workers should get the whole one third not one third of one third. We will always be indebted.

  53. 1/3 that is what we need as workers nothing else

  54. If for example you have R2 million on your retirement funds you must get 1/3 of the R2m not 10% seniqalileke lamasela uku Twista inkulumo ka treasury 1/3 not R25000 not 10 %

  55. Personally I am looking forward to this, I can’t wait. This will give me the financial freedom I have been waiting. I am 37 and the choices I made at 33 years are dragging me to the mud. So this will be a good way for me to settle all outstanding bills and allow me to breath and be able to save because at this rate, I am leave from hand to mouth due to the forever growing interest rates. This is going to change my life. Well done

  56. I’m 46 so for me they can build from 25k …and payout the other money from my fund….They say they want to help..but the cost of living for 25k and when you withdraw that 25k it’s taxable…only my 2cents..And yes corruption also make me think twice in government..correct me if I’m wrong

Comments are closed.