At the start of June, President Cyril Ramaphosa signed into law the amendment bill that establishes the "two-pot" retirement system, which allows members of retirement funds to access a portion of their retirement savings while still employed.
The “two-pot” system, according to Institute of Retirement Funds Africa (IRFA) President Geraldine Fowler, offers retirement fund members an opportunity to think more about their retirement savings.
This system provides flexibility for fund members that was not available in the past. Members will now need to engage with their retirement funds more often and consider the long-term impact and the taxation of benefits.
Wayne Hiller van Rensburg, Executive Officer and spokesperson for IRFA, states that the organisation has consistently endorsed retirement reform and the impact the establishment of the system will have in assisting members in the short term while securing future benefits.
The Pension Fund Amendment Bill awaits the President's signature. Hiller van Rensburg notes, “We are, however, waiting for the Pensions Bill and look forward to its signature, which is necessary for full clarity but not necessary for the implementation of this reform.”
The two-pot system's implementation date is set for the 1st of September this year.
Both Fowler and Hiller van Rensburg assure members of retirement funds and the sector as a whole that, in line with its mandate, the IRFA will continue to share important information to support all stakeholders in effectively implementing and realising the beneficial potential of the “two-pot” system.
IRFA will be gathering in Cape Town in October, for its annual conference.
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