ARTICLE · 22 JULY 2024

South Africa Introduces New 'Two-pot' Pension System – Implications For Expats

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The objective of the two-pot retirement system is to provide flexibility for fund members and to strike a balance between long-term security and immediate need.

South AfricaEmployment and HR

Ralph Wichtmann

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President Cyril Ramaphosa signed the Revenue Laws Amendment Act into law on 1 June, which introduces a 'two-pot' system that gives members of retirement funds access to retirement savings without having to resign or cash out entire pension funds. It is scheduled to apply from 1 September.

The objective of the two-pot retirement system is to provide flexibility for fund members and to strike a balance between long-term security and immediate need. It comprises a savings and retirement component for contributions made after 1 September 2024.

Individuals will have access to amounts in the savings component before retirement for emergency expenditure or during periods of financial distress, while the amounts in the retirement component are to be preserved until retirement.

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