Today's Labour News

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Moneyweb writes that at least 20% of the country’s retirement fund members will not have enough money in their savings pot on 1 September 2024 to make a withdrawal when the two-pot retirement system comes into effect.

That’s the advice from Natasha Huggett-Henchie of the Actuarial Society of SA (Assa). The two-pot retirement system will come into effect at the start of September 2024 (effectively as of 2 September), allowing some retirement fund members to access a portion of their retirement money. Under the two-pot retirement system, a member’s contributions to a fund will be split into a savings component and a retirement component. There is also a third component – the vested component – containing the fund member’s contributions up to 31 August 2024. From the vested component, 10% or R30,000 – whichever is lower – will be allocated as a once-off seeding amount in the savings component. This seeding amount can be claimed from the beginning of September. Since at least R20,000 is required in a retirement fund to enable the minimum withdrawal of R2,000, retirement fund members must first build up enough savings before they can access their money. “Many retirement fund members hoping to be able to dip into their savings before the start of the holiday season at the end of the year will be left disappointed. To avoid finding out in September this year that there is not enough money in the accessible savings pot, we urge retirement fund members to obtain their most recent benefit statements and to work out where they will be by September,” Huggett-Henchie advised. Retirement fund members are supposed to receive regular benefit statements from their employers or product providers, but most don’t pay these any attention until they need the money, change jobs, or retire.

  • Read the full original of the report in the above regard at Moneyweb

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