What’s in the pot?
The two-pot retirement system came into operation on 1 September 2024. Here’s how it works.
Although called the two-pot retirement system, in effect, your retirement savings will comprise of three pots: the vested pot, the savings pot, and the retirement pot. All three pots make up your retirement savings.
The first pot contains your current savings. Your future contributions to your retirement fund will be split into the other two pots. This means your retirement pot is kept until retirement, and the other pots are accessible before retirement, while also allowing you to gain limited access to your future savings pot for emergencies while you are still employed.
The Vested Pot
The Savings Pot
You do not have to withdraw from your savings pot if you do not need the money. What you do not withdraw from your savings pot during your membership will form part of your retirement lump sum when you retire.
The Retirement Pot
You will not have access to the retirement pot when changing jobs or during emergencies.
How the Savings Pot works
On 1 September 2024, 10% or R30 000 (whichever is lower) from your retirement savings in your fund as at 31 August 2024 was allocated to your savings pot as a starting balance (also called your seed capital).
Below are two examples of how this works in practice.
This is the money that you can withdraw if you want to, but if you take money out of your savings pot now, you will have less when you retire – and there are tax implications.
It’s important to only access your savings pot for emergencies.
- To withdraw, you need to apply directly to your retirement fund.
- The claim process will be shared by your fund administrator.
- The amount you withdraw will be subject to tax at your marginal rate and an administration fee will be charged.
Below is an example of how withdrawing from your savings pot could affect your tax and future savings.
Register on the NEW Sanlam Portfolio App
If you prefer to use your PC or laptop, visit cp.sanlam.co.za to view your portfolio online, then follow the same steps to register!
