Memo : “Two-pot Retirement System”

15 August 2024

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We are pleased to announce the introduction of a new two-pot retirement system, effective from 1 September 2024. This change aims to enhance the flexibility and effectiveness of your retirement savings by dividing contributions into two distinct “pots” which are as follows:

1. Retirement Pot (67% of your monthly retirement contribution)

2. Savings Pot (33% of your monthly retirement contribution)

How the Two-Pot System works:

Allocation of Contributions:

✧ 67% of your retirement contributions will be allocated to the Retirement Pot.

✧ 33% will be allocated to the Savings Pot.

Access to Funds:

1. Savings Pot:

✧ You may access your Savings Pot once per tax year before retirement, subject to

rules and after deduction of costs.

✧ Minimum withdrawal amount: R2 000.

✧ There is no maximum withdrawal limit.

✧ Withdrawals will be included in your taxable income and taxed at the applicable

marginal rate.

2. Retirement Pot:

✧ You will not be able to withdraw from this pot until retirement.

✧ At retirement, the total amount in your Retirement Pot must be used to purchase a

pension.

✧ If the total amount available is less than R165 000, it may be withdrawn as a lump

sum.

Internal Only | Memo “Two-pot Retirement System” | 06 August 2024 | M078

MEMO : “Two-pot Retirement System”

Seeding of the Savings Pot:

✧ From 1 September 2024, a maximum of 10% of your existing retirement fund, capped at

R30 000, will be transferred to your Savings Pot as an opening balance. This process is

known as seeding.

At Retirement:

✧ The amount left in your Savings Pot at retirement will be available to you as a lump

sum. You have the option to convert this amount into regular payments instead of

taking it in cash.

✧ The total of both pots will be your complete retirement benefits.

Note:

Retirement savings aren't meant to be accessed once a year. It's better to have an

emergency fund in a separate account, like a tax-free savings account. Think of your Savings Pot as your lump sum for retirement. However, if you face an emergency before retirement, you can withdraw some money early.

We believe this new system will provide you with greater flexibility and control over your

retirement savings. Should you have any questions or need further clarification, please do

not hesitate to reach out to our office on 015 307 6503 or whatsup Old Mutual on

086 093 3333.

Thank you for your attention to this important update.

Thank you for your cooperation.

Marietha Hall

HR Admin Manager

Wisani & NLA

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Download this memo here:

M078 - Two pot retirement system.pdf

Download PDF • 116KB