Two Pot System postponed – and some new thinking

As expected, the implementation date of the proposed two-pot retirement system has been postponed to 1 March 2024. Treasury have realised that the original date was not feasible, given the amount of system changes retirement funds would need to implement to administer the two- pot retirement system.


The original draft had proposed three pots – one for saving, one for retirement, and another vested pot for all the accumulated retirement savings prior to the implementation of the new Two-Pot System. You would be allowed to access the savings pot, but the retirement and vested pots would remain unavailable until normal retirement age.


Here is the link to the Original Article 


New proposals


After facing criticism from both the public and labour unions, treasury seems to have conceded in allowing a once off withdrawal from the vested pot, when the new system is implemented. This will prevent employees from resigning before the date to access their funds. Labour Unions such as Cosatu are pushing for the system to implemented sooner so that their members can access their retirement funds sooner to relieve the financial distress their members are experiencing.




A further consideration was made for allowing a “limited income-based” withdrawal from Retirement pot should members be retrenched. The idea behind this is to provide members with a type of annuity income for a limited period should they become unemployed due to retrenchment. There would be some rules around how this would work – for instance, vested and savings pots would first have to be depleted. Members would also have to have exhausted their UIF Benefits and prove that they have no other income sources. It would also be limited to some sort of maximum amount.



Part of the implementation delay is also to provide Treasury time to understand how the Two-Pot System will affect the public sector funds, such as the GEPF. Afterall, their benefits are based on a defined formula (Defined Benefit Fund) and not on their contributions like in a defined contribution fund.


It’s Complicated

While the implementation of this new system will be delayed, we believe there are still likely to be more changes to the rules of how and when members can access their hard-earned retirement savings. There are many moving parts that need to be considered, each with different consequences. One thing for sure is that it is the proposal is proving to not be a simple, straightforward concept – and it is likely to have some unintended consequences to the way we view retirement savings in South Africa.

Henceforward will continue to monitor the proposals to understand how they may affect you. Read our ultimate retirement planning guide to set you on course to secure your financial future, no matter what new measures Treasury impose.


Visit the Treasury Website for the Original Press Release


Share via your favourite social media platform


As an executive, you're well aware that your financial landscape is unique and complex. Your wealth is typically tied to the success (or otherwise) of the company you work for - primarily via its share price - and the share options that form a large component of your remuneration package.

The role of a Private Wealth Manager goes beyond investing and portfolio management. It's about building relationships based on trust and responding to the emotional needs of clients, supporting them to achieve what matters in their lives. Here we explore what that entails.

In the journey of investing, the path to financial success is often paved with informed decisions and strategic planning. This piece delves into essential investment advice, offering insights not just on avoiding pitfalls but on embracing practices that lead to long-term success.

Sign up to our newsletter to stay informed on our latest news, views and insights on financial planning and investing

* indicates required

Download Your Free Copy of the 8 Deadly Investment Sins and Transform Your Investment Results!