Newsflash: Very important!
The two pot (actually three pots) retirement system becomes effective from 1 September 2024 and is applicable to pension-, provident-, retirement annuity-, and preservation funds. In other words, to pre-retirement funds.
1. Savings pot
From 01/09/2024 one-third of contributions are allocated to this pot, which can be withdrawn once a year at any time before retirement, subject to tax. Withdrawals can only be made if the member has a tax number. The savings pot is intended to serve as a safety net which should only be accessed if the member has no other options.
2. Retirement pot
From 01/09/2024 two-thirds of contributions are allocated to this pot, which is only accessible upon retirement or in the event of death. Members can choose to keep the retirement pot within the fund or transfer it to an approved retirement fund should they no longer be a member of the fund.
3. Vested pot
Existing capital in the retirement fund as at 31/08/2024 will be moved to this pot, which serves as a bridge between the old and new systems. A portion of the vested pot known as seeding capital will be transferred to the savings pot on 01/09/2024 for withdrawal if needed. This transfer will be 10% of your fund value to a maximum of R30 000.
There are many myths doing the rounds and the above is merely a short summary.
It is crucial that you consult with us before making any decisions regarding a withdrawal or any other aspects of the new dispensation!
