Two-pot System

What is the Two-Pot Retirement System?
The Two-Pot Retirement System enables you to access a small portion of your retirement savings (before you retire) for emergencies. The bulk of your savings will remain “preserved”, meaning you will have to keep the majority of your retirement savings invested until you retire.

Who is it for?
Any South African who has a pension fund, provident fund, retirement annuity, or a preservation fund. If you have a provident fund and you were over 55 years old on 1 March 2021 you can continue with the old system or adopt the new one.

How does the Two-Pot Retirement System work?
From 1 September 2024, your retirement contributions will be divided into two pots:

• A Savings Pot where one-third of your contributions will be allocated and which you will be able to access before retirement if required, and
• A Retirement Pot, where the remaining two-thirds will be kept for funding your income in retirement. This pot will be preserved until the retirement date.

There will be a once off automatic allocation of 10% of your existing retirement savings (capped at R30 000) transferred to the “Savings Pot” as an opening value.

The new rules will only apply to new contributions after 1 September 2024 for Two-Pot Retirement System. Retirement savings up to that date will be ringfenced as the “Vested Pot”, and the existing rules will continue to apply.

What you need to know now

• Old Mutual customers will be able to enquire or withdraw via WhatsApp. It is very important that we have the correct cell number for you. You can update your cell number using the Old Mutual App or Secure Services. These “how to” guides will show you how:
• Registration guide: Web | App
• Update your details guide: Web | App
• A minimum of R2 000 can be withdrawn.
• To kickstart the system, an initial transfer of 10% of your existing retirement savings capped at R30 000 will be transferred into your Savings Pot.
• You can only withdraw once in a tax year, between 1 March and 28 February.
• You will be charged an administration fee for the withdrawal.
• You will pay tax on the withdrawal benefit based on your marginal tax rate.
• If you have less than R2000 in your Savings Pot and you are in a Provident Fund or Pension Fund, you will be able to cash out your Savings Pot should you resign (provided that you have not withdrawn in the same tax year). If you’ve withdrawn in the same tax year, then you’ll have to preserve the Savings Pot benefit.