The new proposed two-pot system (technically three pots) is aimed at allowing retirement fund members the flexibility to access one-third of their savings before retirement while preserving the other two-thirds for retirement.

After assimilating feedback from public and industry, National Treasury - together with the South African Revenue Services (Sars) - has chosen to push the proposed implementation date of the "two-pot retirement system" one year later to 1 March 2025.

The new proposed two-pot system (technically three pots) is aimed at allowing retirement fund members the flexibility to access one-third of their savings before retirement while preserving the other two-thirds for retirement.

In the new system, members of schemes will have three "pots": vested (the savings built up before the legislation becomes effective); savings; and retirement.

Delayed implementation

Joon Chong, partner at Webber Wentzel, says retirement fund administrators are likely to welcome the delayed implementation as there were many concerns that the initial date of 1 March 2024 would provide far too little time for the industry to have the necessary systems in place, and to enable the required training of staff and members.

Michelle Acton, retirement reform executive at Old Mutual, confirmed this, saying the proposed implementation date for 1 March 2024 would not have been achievable as the legislation has not yet been finalised.

"It is, however, critical that the legislation is finalised in the next month or...