Member Newsletter
Quarter 2 • 2024
Dear Member
The pending two-pot retirement system is proposed to take effect from 1 September 2024. It is designed to assist members financially before they retire and to help them to save better for retirement.
In this newsletter we describe the two-pot system. After 1 September 2024, two-thirds of your retirement contributions will be allocated to your retirement pot. This will only be available to you when you retire. A third of your contributions will be allocated to your savings pot. After 1 September 2024, in emergencies, you may withdraw cash (once per tax year) from your savings pot.
We also explain why you should stay invested and not access your savings before you retire – it will significantly impact the amount of money you and your family will have once you retire. We also look at the investment performance until March 2024, and emphasise how discipline and patience pay off in the long run.
THE TWO-POT SYSTEM – saving for retirement
How does the two-pot system work?
The two-pot system recognises that members occasionally have emergencies and may need to access funds.
Instead of resigning from your job to access your retirement savings (thereby leaving the Fund completely), you will be able to make a withdrawal from your savings pot once every tax year.
After 1 September 2024, your contributions to the retirement fund will be split into thirds.
Retirement pot
After 1 September 2024, two-thirds of all your contributions will be allocated to your retirement pot. This will only be available to you when you retire. At retirement, you must use your retirement pot to buy an income that is paid to you monthly during your retirement.
Savings pot
After 1 September 2024, a third of all your contributions will be allocated to your savings pot. In addition, on 1 September 2024, 10% of your fund credit, to a maximum of R30 000, will be allocated to your savings pot.
After 1 September 2024, the following will apply on any amounts in your savings pot:
- Previously, you could never access the amount until an exit event such as resignation, dismissal, retrenchment or retirement.
- From 1 September 2024, you may access a portion or the full amount once per tax year without the need for an exit event.
- When accessing your savings pot, the minimum amount that can be withdrawn is R2 000.
Vested portion
Your vested portion will consist of your retirement fund benefit on 31 August 2024.
Three things will happen with your vested portion:
1
On 1 September 2024, 10% of your fund credit, to a maximum of R30 000 will be allocated to your savings pot.2
The balance (90%) will remain in your vested portion and will continue to grow.3
After 1 September 2024, if you are dismissed or retrenched, or resign, die or retire, you or your estate will be able to access this vested portion, as is currently the case.