From 1 September, the new retirement plan called the two-pot system will be rolled out, dividing retirement contributions into two sections: a savings pot and a retirement pot. The savings pot is accessible once a year, and the retirement pot is only available when you retire. There's also a vested pot that includes all contributions made up until August 31, 2024.

Despite the excitement around this new system, those looking forward to accessing their savings pot right away in September might need to temper their expectations. According to Michelle Acton from Old Mutual, setting up the system means that immediate payouts are unlikely. The fund administrators need time to calculate how much money goes into each member's savings and retirement pots, a process known as seeding. This could take anywhere from a few days to several weeks to complete.

Once the amounts are determined, members still have to go through a few more steps before they can access their funds. This includes verifying their identity and going through a tax process with the South African Revenue Service (SARS), which might take an additional 48 hours. It's important to note that withdrawals from the savings pot will be taxed. If you owe any back taxes, they will be deducted from the withdrawal amount, which could significantly reduce what you receive.

The minimum amount you can withdraw is R2,000, but it might take several months for many members to reach this threshold because of how contributions are split between the pots.

Old Mutual has been preparing for these changes with significant updates to their systems and training their staff extensively. They’ve also set up a dedicated call center to handle all inquiries and assist with claims.

In summary, while the new two-pot system aims to improve how South Africans save for retirement, members should prepare for some delays and administrative steps before they can make withdrawals from their savings pot.

Read more about the two-pot system in Accounting Weekly.