President Cyril Ramaphosa has signed into law the Revenue Laws Amendment Bill of 2023, which establishes a “two-pot” system that gives members of retirement funds access to retirement savings without having to resign or cash out entire pension funds.
The amendment law introduces a “two-pot” retirement system to address the concerns related to lack of preservation before retirement and lack of access to retirement funds by households in financial distress.
This retirement system comprises a savings and retirement component for contributions made after 1 September 2024, while historical retirement benefits will be housed in a vested component.
Individuals will have access to amounts in the savings component before retirement for times of financial distress, and the amounts in the retirement component are preserved until retirement.
The primary objective of the two-pot retirement system is to provide flexibility for fund members to access their retirement savings during emergencies, without necessitating resignation,
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