The tax law proposals to introduce the “two-pot” retirement system were published on 29 July 2022. The proposal aims primarily to enable South Africans to save for non-retirement purposes (e.g. emergencies) via their retirement funds, whilst preserving more of their savings for retirement.

The key elements are:

• Vested rights as of 28 February 2023, and any growth thereon will be protected and will remain subject to the current tax and preservation rules.

• As from 1 March 2023, contributions and growth will be split into two pots, the “retirement pot”, and the “savings pot”.
• The “retirement pot” cannot be accessed before retirement but individuals can make one withdrawal from the “savings pot” once during any twelve-month period.