How, Where and What?
You may have heard a lot of talk on the radio and in the local media regarding the implementation of the Two Pot System. Despite the delays that were experienced whilst waiting for it to be implemented, the legislation has been passed and we will see it being implemented from 01 September 2024.
National Treasury proposed the Two Pot System to assist South African’s to save for retirement but still have access to the funds for when they need assistance.
As of 1 September 2024, your retirement provision will be divided into three components.
In our description, we will refer to each component as pots…
- Current Pot:
The savings you have accumulated until 31 August 2024 will go into a vested component. This is ring fenced and the old rules will still apply to this portion. - The New Pot:
All savings from 01 September 2024 will be split into 1/3 and 2/3. 2/3’s will remain in the new pot and will be seen as the retirement component; this is the component you cannot access until retirement. - The Ongoing Pot:
This is where the remaining 1/3 will be invested, this is the portion you can access when needed. Tax
will apply to the portion you withdraw; this will be determined by your marginal tax rate.
Who is it for:
Any South African who has a pension, provident, retirement annuity fund or a preservation fund.
Withdrawals will negatively affect your retirement provision and savings, the more you withdraw, the less your provision will be. It is imperative to speak to your Financial Advisor before making any withdrawals and decisions.
If you choose to not withdraw, your investment will remain invested and continue to attract interest.
For assistance contact us on: 011 675 3671 or admin@hbj.co.za
Please note that our response time is 48 hours (maximum), should we not respond within that time. Please give us a call as we may not have received your request.
