Can I withdraw my pension fund from the savings pot while I am still working?

The long answer

Thank you for your email asking how you can withdraw your pension fund from the savings pot while you are still working.

Although it is known as the “two-pot system”, Francis Marais, in an article for FAnews on 27 February, explains that it is actually a three-pot system: all your retirement saving up until 1 September 2024 will go into the vested pot; and all new contributions after 1 September 2024 will be shared between the savings pot and the retirement pot.

Pot 1: a vested pot contains all your retirement savings before 1 September 2024;
Pot 2: a savings pot you can access once every year; and
Pot 3: a retirement pot you cannot access even if you resign. This pot has to be preserved until your retirement.

Your savings pot will first be funded by up to 10% of your vested pot, but it cannot be more than R30,000. From 1 September 2024, you can withdraw the whole amount if you wish. 

After that first funding from the vested pot, one third of your total annual contribution will go to your savings pot. You can withdraw whatever you want from the savings pot once a year, provided that it is not less than R2,000.

From 1 September 2024, two thirds of your total annual contribution will go to your retirement pot. You will not be able to access this money if you change jobs or resign. It has to be preserved to be paid out to you as a pension when you retire. When you retire, you can either receive the funds in your savings pot as a lump sum, or you can transfer them to your retirement pot. If you do that, you can withdraw the funds that have been transferred from the savings pot at lower tax rates when you retire.

The funds that are in the vested pot will stay there under the old rules and can be transferred to your retirement pot tax-free when you retire.

You will need to ask your HR manager or the person who deals with the pension fund how to withdraw the funds in your savings pot from 1 September 2024. Remember that it is a once-a-year withdrawal, and the limit on the first withdrawal is the R30,000 that was deposited there from your vested account.

Wishing you the best,
Athalie