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.

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 component houses your retirement savings that you accumulated before 1 September 2024. Investment growth continues to be credited to the vested component.

The new two-pot system will apply to all retirement funds. This is for both private sector and public sector funds, except for the old generation or legacy retirement annuity policies, or funds with no active participating members (such as funds in liquidation, beneficiary funds, closed funds or dormant funds).

The two-pot system is meant to support long-term retirement savings while offering flexibility to help you if you are in financial distress.

On 1 September 2024, 10% or R30 000 of your fund credit, whichever is lower, was allocated to your savings component. This is called seeding capital.

By default, if you were 55 years or older on 1 March 2021, you will not be included in the two-pot system. You may however elect to participate.

For members who were less than 55 years old on 1 March 2021, their seeding capital was taken proportionally from their vested and non-vested pots.

No. If a member chooses not to make a withdrawal from their savings pot, the savings pot will continue to grow. A withdrawal of any amount (over R2 000) can be made whenever you choose, once per tax year. The savings pot is best left untouched until you retire where a cash lump sum can be withdrawn.