Newsletter • Quarter 3 • 2023
UPDATE ON THE PROPOSED TWO-POT SYSTEM
There is much noise about the government’s proposed two-pot system, which is expected to come into effect on 1 March 2024.
In our previous newsletter, we introduced the two-pot system. We are not covering it in detail in this newsletter, but will provide you with a more detailed communication in the next newsletter. Until then, you only need to register the below-mentioned salient points.
Accessing your retirement savings
The two-pot system will see legislation changed to allow you to access a portion of your retirement savings while working.
One of the objectives of the proposed two-pot system is to encourage you to save for your retirement and at the same time provide you with limited access to your retirement savings for emergencies. Currently, you have no access to the money you have saved in your retirement fund, unless you resign.
Why the two-pot system?
- to alleviate financial hardship
- to improve retirement outcomes for people saving in retirement funds.
Updated legislation to be released
Earlier this year the government released a Bill with details of the proposed changes. There was much feedback from the public participation process, which is currently being reviewed. The government will then release an updated version of the legislation and communicate the latest version of the two-pot system.
The two-pot system is important, as it has far-reaching consequences and much impact. Although it is receiving much media attention, it is still not easy to understand.