So South Africans can retire more comfortably. 
Government wants South Africans to become a nation of savers, but they understand that members of funds have emergencies as well. The purpose of the new system is to provide flexibility and security for retirement savings. By dividing the retirement savings into pots, the system aims to balance immediate financial needs with the goal of securing a stable income during retirement.
 

From 1 September 2024, your retirement contributions will be divided into two pots, also known as ‘pots’:

• A Savings Pot where one-third of your retirement savings contributions will be allocated. You’ll be allowed one withdrawal a tax-year subject to a minimum amount of R2 000 (before deducting charges, tax or transaction costs).
• A Retirement Pot, where the remaining two-thirds will be kept for funding your income during retirement. This pot will be preserved until your retirement date.
   

If you were a member of a qualifying retirement savings plan or fund, a once-off transfer of 10% or R30 000 (whichever was the lowest) of your retirement savings was paid into your Savings Pot. The balance of your money remained in the Vested Pot.

If you did not have any retirement savings, you will have to wait until you have saved and accumulated a minimum of R2 000 in your Savings Pot before you can make a withdrawal.
 

No additional contributions will be paid into your Vested Pot and the money in it will grow with investment returns.
However, if you change jobs, resign, are dismissed or retrenched you will be allowed to:

• Transfer your money into another fund.
• Take your money in cash. If you withdraw the money, it will still be taxed at the withdrawal lump sum tax tables.
   

No, you cannot access the money in your Retirement Pot. This money must remain invested until you retire. You must use it to buy a pension income plan when you retire.

You do not need to make a withdrawal if you do not have an emergency. The money in the Savings Pot will accumulate and carry over to the next year till your retirement date.

Yes, you will. The money in your Savings Pot will continue to grow and earn interest the longer it remains untouched. This means your overall retirement savings will increase over time, helping you build a more substantial nest egg.

It’s important to remember that the Savings Pot is not meant to be used like a regular savings account. Avoid using it to fund holidays and entertainment expenses or to buy furniture. It is meant to provide for financial emergencies and should only be considered when no other options are available. These emergencies will vary for each person but may include situations like paying medical bills or covering rent to prevent being evicted. 

Tax rates: Withdrawals from the Savings Pot are taxed at your marginal tax rate. This means that the tax you pay depends on your income bracket. For example:

• A withdrawal of R5000 will incur taxes, based on your income level.
• The exact tax rate will be confirmed by the South African Revenue Service (SARS) through a tax directive.

Arrear tax deduction: Before any benefit is paid out from the Savings Pot, arrear tax (if applicable) will be deducted by SARS. Metropolitan will apply for a tax directive, and if you have outstanding tax debt, it will be deducted from the withdrawal amount before you receive the balance.

Withdrawal fee: Keep in mind that a withdrawal fee of R300 will also be deducted. The tax is calculated on the net withdrawal amount after deduction of the fee.

E.g. if you want to deduct R5 000 and the SARS directive indicates taxes of R1 000, we will pay your R5000 – R300 – R1000 = R3700.
We strongly recommend that you get financial advice and understand the implications before making any withdrawals.
 

Tax directives will be required for withdrawals from the Savings Pot. SARS will require a member’s tax reference number and annual income for these tax directives.
Tax directives will still be required for all other payouts, including transfers to another fund.
Tax directives will not be required for:

• Transfers of Seed Capital to the Savings Pot
• Re-allocations of benefits in the same fund.