Two-pot retirement system: Delays expected in payments from ‘savings pot’

Gugs Mhlungu spoke to certified financial planner, Paul Roelofse.

Listen to their conversation in the audio clip below.

A massive reform will take place with retirement funds on 1 September 2024.

The Revenue Laws Amendment Bill signed into law recently, will introduce a two-pot retirement system, enabling employees to access limited portions of their pensions without resigning.

"A lot of people are really anticipating the 1st of September as a windfall to access their retirement funds but there are going to be restrictions."

- Paul Roelofse, certified financial planner

According to a recent Moneyweb article, funds may not be able to pay out on that date as ‘several steps need to be implemented first’.

Many people are expected to try and access funds from the Savings Pot.

What is the Savings Pot?

10% of the vested fund up to R30 000 will be transferred across to a Savings account which will start from the 1st September 2024. One-third of your future retirement contributions will be allocated to this savings account with the following conditions:

Withdraw a portion or in full
once a year
a minimum of R2,000

"The two delays are going to be the efficiency of your funds in terms of the administration. I think the other side of it is going to be how long SARS takes to get the directive back to your fund administrator before they release the monies."

- Paul Roelofse, certified financial planner

"I don't think you should be accessing your retirement funds at all but if it's one of those measures of last resort and you need the money, holding on a little longer could actually give you access to a lot more."

- Paul Roelofse, certified financial planner

For more financial tips visit Roelofse's website: www.investforlife.co.za

Scroll up to listen to the full interview.