The National Treasury has proposed a delay in the implementation of the ‘two-pot’ retirement system until 1 March 2025. This system is designed to allow people to access one-third of their pension savings before retirement. The delay is intended to provide the savings and investment industry with more time to administer the changes.
Under the planned two-pot system, it will be compulsory for retirement funds to split member contributions into two components. One-third goes to a savings pot that is available any time to meet emergency expenses, while the remaining two-thirds will go to a retirement pot that will have to be used to purchase an annuity upon retirement.
The Treasury has also proposed increasing the amount that workers can immediately access once the two-pot system comes into effect from an initial R25 000 to R30 000. This so-called seed capital amount equates to 10% of a member’s retirement savings value on 28 February 2025 up to a maximum of R30 000.