The two-pot system is a reform that allows you to make partial withdrawals from your retirement savings before you retire, while preserving a portion of your retirement savings that can only be accessed when you retire. This means members need not resign to access part of their retirement benefit if they are in financial distress.

The two-pot system is meant to help fund members in times of financial difficulty by allowing access to the savings pot before retirement. It is advisable that members use the savings pot sparingly and only when there is a dire need. Importantly, it also protects a portion of savings to only be used for retirement.

The two-pot system created a ‘savings pot’, a ‘retirement pot’ and a ‘vested pot’. Only the savings pot and the retirement pot receive your retirement contributions. The vested pot houses your retirement savings that you accumulated before 1 September 2024. Investment growth continues to be credited to your vested pot.

Your retirement contributions are split into a savings pot and a retirement pot. A ratio of 1/3 of your total contributions go into your savings pot and 2/3 of your total contributions goes into your retirement pot.

On 1 September 2024, 10% or R30 000 of your fund credit, whichever was lower, was allocated to your savings pot. This is called seeding capital. This is a once-off event and does not happen annually.

You are able to withdraw from your savings pot at any time. However, the withdrawal cannot be less R2 000. You may only make a withdrawal once in a tax year. You do not need to make a withdrawal from the savings pot every tax year. Your withdrawal will be taxed at your marginal tax rate. There is no maximum withdrawal limit on your savings pot.

Old rules will apply to retirement savings accumulated before 1 September 2024. When you resign, you will still have full access to your accumulated retirement savings (your vested pot). This can either be taken as cash (subject to tax) or transferred to another retirement fund. You can also still access what is in your savings pot after resignation. Your retirement pot is not accessible when you resign.

No, you will not lose your money if you do not make a withdrawal. If a member chooses not to make a withdrawal from their savings pot, the savings pot will continue to grow. The savings pot is best left untouched until you retire where a cash lump sum can be withdrawn.