To make a two pot withdrawal you must be an active member of a South African retirement fund that has adopted the two-pot system, have money in your savings component, ask for at least R2 000, not have already withdrawn in the current tax year, and be registered for income tax with SARS. You apply to your fund, not to SARS; the fund then gets a tax directive from SARS before it pays you.
The two-pot system took effect on 1 September 2024. What you receive is the amount you request less tax at your marginal rate, any tax you owe SARS and your fund’s administration fee.
Eligibility Requirements at a Glance
- Fund membership: you are an active member of a pension, provident, preservation or retirement annuity fund that runs the two-pot system.
- Savings component balance: only the savings component can be withdrawn before retirement. The retirement component and the vested component cannot be touched this way.
- Minimum amount: each withdrawal must be at least R2 000. There is no maximum other than the balance in your savings component.
- Frequency: one withdrawal per tax year (1 March to the end of February).
- Tax registration: you must be registered for income tax and give the fund your tax reference number.
- Tax compliance: SARS will not issue a tax directive if you have outstanding returns. Unpaid tax debt does not block the withdrawal, but it is deducted from the payout first.
National Treasury lists who is excluded: old-generation or legacy retirement annuity policies, funds with no active members (funds in liquidation, beneficiary funds, closed or dormant funds), pensioners, and provident fund members who were 55 or older on 1 March 2021 and have not opted in. Those provident fund members can elect to join through their fund, but the choice cannot be reversed.
Your savings component started with seed capital of 10% of your fund value on 31 August 2024, capped at R30 000. That was a once-off transfer. Since then, one-third of your retirement contributions goes into the savings component and two-thirds into the retirement component.
Identification and Account Requirements
Tax number. SARS will not issue a tax directive without a valid tax reference number, and a directive request for an unregistered member is rejected. If you are not registered, register before you apply to your fund, through SARS eFiling.
Documents and Verification Required
Each fund sets its own claim requirements, so check the list your administrator publishes. Expect to need:
- Your SARS income tax reference number
- Whatever identity and banking confirmation your fund asks for
- Your fund membership details
Verification then runs in two stages. The fund checks your identity and banking details, and once you have made a final decision to withdraw, the administrator applies to SARS for a tax directive on form IRP3(a). The directive tells the fund how much tax to withhold and, where you have outstanding tax, carries an instruction to pay that debt to SARS first.
Fees, Limits and Service Conditions
- Tax: a savings withdrawal benefit is added to your taxable income for the year and taxed at your marginal rate. The retirement lump sum tables, tax-free amounts and deductions do not apply.
- SARS debt: tax you owe SARS is deducted from the payout first. A formal payment arrangement with SARS stops debt deductions, but arrears are still deducted.
- Administration fee: the FSCA confirms that funds may charge an administration fee on each withdrawal, according to the fund’s rules, and must tell you what it is. The amount differs by fund.
- Limits: minimum R2 000 per withdrawal, one withdrawal per tax year, no maximum beyond your savings component balance.
SARS offers an illustrative calculator on eFiling and the SARS MobiApp to estimate your payout after tax. Use it, and ask your fund for its own estimate, before you commit the money.
Apply only through your own fund or its administrator.
How to Apply, Open or Activate
You apply for a two-pot system withdrawal online or on paper through your own retirement fund or its administrator. There is no central government application form: the two-pot system withdrawal application form, portal or app is provided by your fund. The IRP3(a) tax directive form is submitted by the fund to SARS, not by you.
- Check that you are registered for income tax and that you have no outstanding returns on eFiling.
- Find out who administers your fund. Your employer’s HR office or your benefit statement can tell you.
- Log in to the fund’s member portal or app, or ask the administrator for its claim form, and check your savings component balance.
- Get an estimate of the net amount, using the SARS calculator or the fund’s own quote.
- Submit the claim with your tax number, banking details and any documents the fund asks for.
- The fund applies to SARS for the tax directive and pays the net amount into your bank account once the directive is issued and its own checks are complete.
Track the status of your claim with the fund or administrator. If a claim is delayed because of your tax status, the fix sits with SARS.
If your fund does not pay or handle a withdrawal properly, the Office of the Pension Funds Adjudicator deals with complaints about funds registered under the Pension Funds Act. It asks you to complain in writing first to the party you are complaining about and, if you get no response after 30 days or are unhappy with the response, to submit the complaint to the Adjudicator.
If you are looking for a benefit from an old fund, the FSCA says the Registrar of Pension Funds provides a central database on its website where you can search for unclaimed benefits due to you.
Frequently Asked Questions
Can I apply for a two pot withdrawal directly with SARS?
No. You apply to your retirement fund. The fund then requests the tax directive from SARS on your behalf.
Where do I get the two-pot withdrawal application form?
From your fund or its administrator, usually through the member portal or app. Each fund has its own form and process.
What is the minimum I can withdraw, and how often?
At least R2 000 per withdrawal, and only one withdrawal per tax year. If your savings component holds less than R2 000, you have to wait until it grows past that amount.
Why is my payout less than the amount I requested?
Tax is withheld at your marginal rate, any outstanding SARS debt is paid first (unless you have a payment arrangement), and the fund deducts its administration fee.
Do I have to resign to access my savings pot?
No. The savings component can be accessed while you are still employed. If you do resign, you still have access to what is in the savings component, but the retirement component stays preserved until retirement.
Can I withdraw if I am not registered for tax?
Not until you register. SARS rejects directive requests for members without a tax reference number, so the fund cannot pay you.
What are the two pot annuity withdrawal rules?
The retirement component can only be accessed at retirement, to buy an annuity. A lump sum is allowed only if two-thirds of your vested component plus your retirement component comes to R165 000 or less. The savings component is the one you can withdraw from before retirement, under the rules above.
Withdrawal rules, tax treatment and fund fees can change. Confirm current requirements with your retirement fund or its administrator and with SARS before you apply.
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