The Two-Pot Retirement System is a new legislative framework introduced by the South African government. The Two-Pot Retirement System will allow retirement fund members to have access to the portion of their retirement savings before termination of their fund membership. This will come into effect as of 1 September 2024. This means that the member of a fund will have three components to their retirement savings record, and these are:

1. A vested component
2. A retirement component
3. A savings component

The vested component:

This is the component of the members contributions which constitute the member’s individual account as per section 14B of the PFA, and which was accumulated before 1 September 2024. This component remains as is and is governed by the rules as we know them before the Two-Pot Retirement System.

The retirement component:

From 1 September 2024 onwards, the retirement component will be made up of two-thirds of the member’s contributions. And this component can only be accessed at retirement, even if the member changes employers or withdraws from the Fund.

The savings component:

This component will be funded by one third of the member’s contributions as from the 1 September 2024. This pot can only be accessed once during a tax year, subject to a minimum withdrawal amount of R2000 and the maximum of R30 000. The initial savings amount to be invested in the savings account will come from the existing fund credit or minimum individual account of the member accumulated before 1 September 2024.

Once-off withdrawal: You will be able to withdraw whichever is lower between 10% of the retirement savings and R30 000.

Annual withdrawals: You will be able to withdraw a minimum withdrawal amount of R2000 and a maximum of R30 000.

To be able to withdraw the minimum of R2000 your fund credit in your vested pot must be equal to R20 000.

To be able to withdraw the maximum of R30 000 your Fund credit in your vested pot must be equal to R300 000.

If the fund credit in your vested pot is only R2000 on 31 August 2024 you will not be able to make a savings withdrawal now. You will have to wait until your Savings component has accumulated at least R2000 as this is the minimum amount you may withdraw once a tax year.

Once-off withdrawal: You will be able to withdraw whichever is lower between 10% of the retirement savings and R30 000.

Annual withdrawals: You will be able to withdraw a minimum withdrawal amount of R2000 and a maximum of R30 000.

To be able to withdraw the minimum of R2000 your fund credit in your vested pot must be equal to R20 000.

To be able to withdraw the maximum of R30 000 your Fund credit in your vested pot must be equal to R300 000.

If the fund credit in your vested pot is only R2000 on 31 August 2024 you will not be able to make a savings withdrawal now. You will have to wait until your Savings component has accumulated at least R2000 as this is the minimum amount you may withdraw once a tax year.

You will be able to submit request to withdraw from 1 September 2024. Thereafter only one withdrawal from the savings pot can be made per year.

The fund credit of current members as at 31 August 2024 will be ring-fenced and may still be taken in cash at resignation and retirement.

If you choose not to withdraw your Savings Pot money it will continue to grow. You can then withdraw it as cash when you reach retirement.

The Vested Pot and the balance in the Savings Pot can be taken in cash. The Retirement Pot must be used to buy a pension for life.

If you leave your employer before retirement through resignation, retrenchment or dismissal, you can access your vested component as well as your savings component as a cash lump sum (tax will apply).

• There will be a dedicated resource at your mine to assist you in completing claims during the initial phase.
• The Fund representative will be at your mine from 02 September 2024.
• Claims will be processed through the automated system.
• Claims will be paid within a maximum of 14 working days after submission of the claim and all supporting documents.
• No additional fee will be levied for the initial phase, this is subject to future review.
• Once claim has been lodged, you will receive an acknowledgement SMS followed by ongoing updates regarding the claim status.

The following documents will be required to complete a claim:

1. Original Identity/Passport Document
2. Tax Document or Number
3. Latest Salary Slip
4. Copy of the Bank Statement – not older than three months
5. If your banking details differ from those on your payslip, you need to provide banking details that are three months old or older.

1. If you were younger than 55 on T-day, your T-day vested benefit is your retirement savings on 28 February 2021. Your T-day non-vested benefit is all your retirement savings from T-day.
2. If you were 55 or older on T-day and remained in the Fund, your T-day vested benefit is your retirement savings on 28 February 2021 and all your retirement savings from T-day. You will not have a T-day non-vested benefit.
3. If you were 55 or older on T-day but transferred to a new fund after T-day, your T-day vested benefit is your retirement savings up to the date of your transfer to the new fund. Your T-day non-vested benefit is all your retirement savings in the new fund.

Furthermore, members who were 55 years or older on 1 March 2021 and who remained members of the Fund until 1 September 2024 can elect whether to participate in the Two-Pot Retirement System or remain as contributing members according to the pre-1 March 2021 regime. If such member does not opt into the two-pot retirement system but transfers into another fund after 1 September 2024, then they will automatically be in the Two-Pot Retirement System.

Withdrawals from the Savings Pot before retirement are subject to marginal tax rates. This means that the amount withdrawn is taxed according to the individual’s income tax bracket. The tax rates can vary based on the total income, including the withdrawn amount. Members should consider the potential tax consequences when making withdrawals from the Savings Pot.

Diversification:

By dividing savings into two pots with different risk profiles, individuals can achieve greater diversification, reducing the overall risk of their retirement portfolio.

Risk Management:

This component will be funded by one third of the member’s contributions as from the 1 September 2024. This pot can only be accessed once during a tax year, subject to a minimum withdrawal amount of R2000 and the maximum of R30 000. The initial savings amount to be invested in the savings account will come from the existing fund credit or minimum individual account of the member accumulated before 1 September 2024.

Flexibility:

It allows individuals to adjust their investment strategy according to their risk tolerance, investment horizon, and changing financial goals.