Fin24 reports that on Friday Treasury published proposed legislation that will set new rules for the two-pot retirement system, scheduled to kick in on 1 March 2024.

The two-pot system means employees will be able to access one-third of their retirement savings throughout their career, while two-thirds will only become accessible on retirement. The reform is meant to deter workers from cashing out their retirement savings when they resign, and also to prevent workers from resigning to access their retirement funds. The revised 2023 Draft Revenue Laws Amendment Bill and 2023 Draft Revenue Administration and Pension Laws Amendment Bill were published for public comment on Friday. Among the proposals in the proposed legislation is that current retirement fund and retirement annuity members can only withdraw up to R25,000 of their existing savings from March 2024. Members of funds will however be encouraged to only exercise the withdrawal option as a last resort, and to try to preserve their savings for retirement for when they retire. Different rules will apply to defined benefit funds, which will allow members to withdraw one-third of their pensionable service increase, while the remaining two-thirds must remain in the "retirement pot". The proposed legislation is the first phase of the legal implementation of the two-pot system. The second phase will deal with allowances for retrenched workers who have no alternative income. In the proposed legislation, the word "pot" is replaced by "component".

• Read the full original of the report in the above regard compiled by Helena Wasserman at Fin24

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