Introducing the Two-Pot Retirement System: A Game-Changer for South Africans

March 07, 2023

The current retirement system in South Africa has its flaws, leaving many retirees with very little to rely on. However, a new proposed system called the two-pot retirement system aims to revolutionize retirement in South Africa by providing more flexibility and security for retirement fund members.

What is the Two-Pot Retirement System?

The two-pot retirement system divides retirement savings into two pots: an accessible pot and a retirement pot. The accessible pot allows members to withdraw up to one-third of their contributions plus investment returns once a year, subject to tax and preservation requirements. The retirement pot requires members to annuitize at least two-thirds of their savings on retirement, ensuring they receive a regular income for life or a fixed period.

Benefits of the Two-Pot Retirement System

This innovative reform will provide short-term benefits, allowing members to access their funds during times of financial distress, without compromising their entire future income. It will also encourage more people to join formal retirement funds, making retirement savings more accessible and attractive, and boosting economic growth and development by increasing domestic savings and investment levels.

Long-term benefits of the Two-Pot Retirement System

The two-pot retirement system will also ensure that retirees have adequate income by preserving most of their savings until retirement, reducing the risk of outliving their savings or relying on others for support in old age. It will also enhance its role as a driver of economic transformation.

Implementation of the Two-Pot Retirement System

The two-pot retirement system is expected to be implemented in 2024/2025, applying to all members who join after that date. Members who joined before the implementation date will have their existing savings vested in a separate pot that will follow the current rules.


Overall, the two-pot retirement system is a bold and innovative reform that promises to transform retirement in South Africa. It balances the need for liquidity with the need for security, allowing some access to one's savings while preserving most of them for retirement. So, start planning for your future with peace of mind, knowing that your retirement savings are in good hands with the two-pot retirement system.