The two-pot retirement system in South Africa, effective 1 September 2024, allows members to withdraw from the “savings component” of their retirement fund under specific conditions[1]. Withdrawals are only permitted from the savings component—not from the retirement (preservation) component, which is inaccessible until retirement[4].
Key withdrawal requirements and rules include:
- The minimum withdrawal amount from the savings component is R2,000[1][2][3][7].
- You may only make one withdrawal from the savings component per tax year[1][3].
- There is no maximum withdrawal limit, but only what is available in your savings pot can be accessed[1].
- Withdrawals are taxed at your marginal income tax rate, and a processing fee will also apply[2][3][6].
- You must have a minimum balance (some funds require at least R2,500) before a withdrawal can be made[7].
- The withdrawal application must be submitted to your retirement fund, not your employer[1][3].
- From 1 September 2024, you can initiate withdrawals via your fund’s benefit counselling service or online portal, and payment may take a few weeks to process[3].
- You must be registered for tax, ensure you have no outstanding tax returns, and no debts to SARS, as these will be deducted from the withdrawal amount[6].
- Withdrawals from the savings component are allowed whether or not you leave your employer, unlike the older system[1][4].
- If you do not withdraw, the savings pot continues to grow with investment returns and can be withdrawn as a lump sum at retirement[1][3].
References
- [1] TWO-POT RETIREMENT SYSTEM (National Treasury FAQ, August 2024)
- [2] Two-pot retirement system | Momentum
- [3] Two-Pot System – Transport Sector Retirement Fund
- [4] Two-pot system – My Money Matters Toolkit (Alexforbes)
- [6] Two-Pot Retirement System | South African Revenue Service (SARS)
- [7] Two-Pot retirement system – Sanlam
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