Money Desk
How South Africa’s two-pot retirement system works
South Africa's two-pot retirement system allows early access to savings.
South Africa implemented the two-pot retirement system on 1 September 2024. By January 2025, more than 2 million taxpayers had withdrawn R43.4 billion gross from their Savings Components.
How Savings Were Seeded
When the system took effect on 1 September 2024, 10% of a member’s existing retirement savings was transferred to seed the Savings Component, subject to a cap of R30 000 per fund. The transfer created the initial amount available in the component under the new system. Members with less than R30 000 transferred received 10% of their existing savings, while no fund could seed the component with more than R30 000.
Where New Contributions Go
Ongoing retirement fund contributions are divided between two components: one-third, or 33.3%, goes to the Savings Component, and two-thirds, or 66.7%, goes to the Retirement Component. The split applies to contributions made for retirement fund members under the two-pot system.
| Component or compliance measure | Figure |
|---|---|
| Ongoing contributions to the Savings Component | 33.3% |
| Ongoing contributions to the Retirement Component | 66.7% |
| Employers listed by the FSCA | 6,064 |
| Estimated unpaid retirement contributions | R8.33 billion |
| Fund members affected | Approximately 590,000 |
Members therefore build balances in both components through ongoing contributions, with twice as much directed to the Retirement Component as to the Savings Component. The allocation determines where each portion of a contribution is placed within the retirement fund.
Employer payment compliance can affect whether those contributions reach members’ funds. On 2 July 2026, the FSCA published a list of 6,064 employers reported for failing to comply with Section 13A of the Pension Funds Act.
According to the FSCA, the listed employers owed an estimated R8.33 billion in unpaid retirement contributions. The non-payment affected approximately 590,000 fund members.
