Trevor: Thato:

I also heard mention of something called the Two-pot System that they say might come into effect on 1 March 2024? What’s that about?

It will be the new way that all retirement funds will be structured. After that date, your new retirement funds will be split: 1/3 into a ‘savings pot’ and 2/3 into a ‘retirement pot’.

You’ll be able to make one withdrawal from your savings pot every year. You don’t have to, though, as it’s only meant to be for emergencies so that you don’t have to resign to get access to your savings.

You won’t be able access 2/3 of your savings before you retire. This will ensure that your retirement benefit will be higher when you set up your retirement income.

Isn’t that how retirement annuities work already?

That’s correct, but with your current RA you can’t access the 1/3 until you retire.

When the rules change, you’ll be able to access 1/3 of your RA before retirement.

Will I be able to access my existing savings?

The regulations are not final yet, but it looks like you will have limited access to your existing fund savings.

You’ll also still have full access to your “vested” savings when you resign. Those are savings that you have saved to that date. You will have to pay tax on the amounts you take from your savings pot, at your marginal tax rate.