The two-pot system
The two-pot system was introduced on 1 September 2024.
The two-pot system is designed to help you in two important ways:
- To give you access to some of your retirement savings if you really need to.
- To help you save for a more secure retirement.
All members will have three pots:
Your vested pot
What happened to your retirement savings that you accumulated before the new two-pot system began on 1 September 2024?
On 1 September 2024, 10% of your retirement savings or R30 000, whichever was smaller, was moved to your savings pot. The balance of your retirement savings, was moved to your vested pot.
- No contributions will be made to your vested pot.
- Your retirement savings in your vested pot earn investment returns.
- You cannot make withdrawals from your vested pot until you exit the Fund.
If you resign, you can choose to:
- transfer your vested pot to your new employer’s fund,
- transfer your vested pot to another approved fund,
- withdraw some of your savings from your vested pot,
- withdraw all of your savings from your vested pot.
HBSA Vested Pot
When the two-pot system was started on 1 September 2024, if you were age 55 years or older on 1 March 2021 and in a provident fund, you had the option to participate (provided you were still in the same fund). You had twelve months until 31 August 2025 to make your decision.
If you joined the two-pot system
- You may withdraw from your savings pot while you are still employed. You will pay tax on your withdrawal, subject to marginal tax rates.
- The money in your retirement pot will be used to set up an income for you when you retire.
- You may withdraw the money in your savings pot in cash when you retire. You will pay tax on your withdrawal, subject to marginal tax rates. You may also choose to use some or all of this money to set up a retirement income.
- Your retirement savings up to the date that you opted in to the two-pot system, will be transferred to your vested pot.
- The money in your vested pot can be withdrawn in cash when you retire. You will pay tax on your withdrawal, subject to marginal tax rates.
- You cannot withdraw from your vested pot until you leave the Fund. You can only withdraw money if you leave your employer or retire.
If you did not opt-in to the two-pot system
- The two-pot system does not impact you.
- You can use all your retirement savings to buy a retirement income.
- Alternatively, you can withdraw all of your retirement savings in cash, after tax.
HBSA (ex-Distell) Vested Pot
- When the two-pot system was started on 1 September 2024, if you were age 55 years or older on 1 March 2021, you had the option to participate (provided you were still in the same fund). You had twelve months until 31 August 2025 to make your decision.
- On 1 November 2024, all members who were 55 years or older on 1 March 2021 will automatically join the two-pot system.
- If you did not opt-in to participate in the two-pot system by 31 October 2024, all your retirement fund savings up to 31 October 2024 will be transferred to your vested pot.
- You cannot withdraw from your vested pot until you leave the Fund. You can only withdraw money if you leave your employer or retire.
- None of your contributions are ever added to your vested pot. These savings are invested and continue to grow.
HBSA (Ex-DPF) Vested Pot
- When the two-pot system was started on 1 September 2024, if you were age 55 years or older on 1 March 2021, you had the option to participate (provided you were still in the same fund). You had twelve months until 31 August 2025 to make your decision.
- On 1 November 2024, all members who were 55 years or older on 1 March 2021 will automatically join the two-pot system.
- If you did not opt-in to participate in the two-pot system by 31 October 2024, all your retirement fund savings up to 31 October 2024 will be transferred to your vested pot.
- You cannot withdraw from your vested pot until you leave the Fund. You can only withdraw money if you leave your employer or retire.
- None of your contributions are ever added to your vested pot. These savings are invested and continue to grow.
Your savings pot
- On 1 September 2024, 10% of your retirement savings (or R30 000, whichever was less) was moved into your savings pot.
- The rest of your retirement savings was moved to your vested pot.
- With the two-pot system, you can withdraw money from your savings pot when you really need it — without having to leave your job or retire.
To make a withdrawal, you must submit your claim through AF Connect.
You can log in or register here.
If you are considering a withdrawal, first speak to an accredited financial adviser to help you make an informed decision. You can contact the Alexforbes Advice Centre at 0860 100 444 or email iac@aforbes.com.
Making withdrawals from your savings pot
If you face a real emergency or financial difficulty, you can withdraw money from your savings pot, without having to leave your job or retire. Please bear in mind that this is for emergencies only.
- Withdrawal period – 1 March to 28 February each tax year
- You may make one withdrawal per tax year. The tax year is from 1 March to 28 February of the following year.
- You must have more than R2 000 in your savings pot in order to make a withdrawal.
Go to AF Connect
For any questions about the two-pot system, please contact the Alexforbes Two-pot Call Centre on 0860 896 768 or email twopotqueries@alexforbes.com.
Withdrawing today means less money when you retire.
- Every rand you withdraw now is money you will not have later.
- It will cost you hundreds of rands more every month, to catch up before you retire.
- Rather keep your savings growing through the magic of compound interest. This is where your interest earns interest over time.
If you are thinking about making a withdrawal, please get advice first.
Contact the Alexforbes Advice Centre: 0860 100 444 or email iac@aforbes.com
Tax and making withdrawals
- When you take money from your savings pot, it is important to remember that tax will apply.
- Any withdrawal you make before your retirement, is added to your income for that tax year. So you will pay tax on the amount you take out.
- This tax is charged at your marginal tax rate.
- If you wait until you retire, you can withdraw up to R550 000 tax-free. That is a big tax saving which means more money stays in your pocket.
Your retirement pot
- You cannot withdraw from your retirement pot – even if you change jobs.
- The money in your retirement pot is saved for your future.
- When you retire, all of the money you have saved in your retirement pot must be used to buy a retirement annuity. This will give you a regular income each month after you stop working.
- The more you save in your retirement pot, the higher your monthly income will be in retirement.
- You may transfer money from your savings pot into your retirement pot. You may not transfer money out of your retirement pot.
What happens to your contributions?
1/3
One third of your contributions go into your savings pot.
2/3
Two thirds of your contributions go into your retirement pot.