When the Two-Pot Retirement System goes live, your retirement fund contributions will be split into three components.

POT 1: Savings Component

• On the last day of February (in the year Two-Pot Retirement System becomes effective), 10% of your Vested Component value will be transferred to your Savings Component. It will be capped at R30 000.

• One-third of your future retirement fund contributions will be allocated here and should grow with investment returns.
• You can access this Component before retirement. You will be charged a transaction fee for each withdrawal to cover administration costs.
• Withdrawals can happen only once per tax year between 1 March and 28/29 February.
• The withdrawal is set at a minimum of R2 000. The maximum amount will be your balance available in this Component.
• This Component is designed to be your lump sum at retirement. Any amount you withdraw before your retirement will reduce your lump sum.
• Any amount from your Savings Component paid out upon your retirement or death will be taxed at the current retirement fund lump sum benefit scales.
• If you withdraw from your Savings Component prior to your retirement or death, it will be taxed at your marginal tax rate.

POT 2: Retirement Component

Two-thirds of your future retirement fund contributions will be allocated here and should grow with investment returns.

• This Component can only be accessed on death or at retirement.
• This Component will travel with you for the rest of your working lifetime and no withdrawals will be allowed before retirement.
• When you retire, the total amount here must be used to purchase a pension, which will provide you with a regular income after you retire.

POT 3: Vested Component

• Your existing retirement fund contributions, minus the amount transferred to your Savings Component, will remain in this Component and should grow with investment returns.
• The current access rules shall apply. i.e., you can still access this Component if you leave your Employer before retirement.