Retirement Insights | 4 min read

Retirement Reform

*A new draft bill was published on 1 November 2023. Read more below.

*Regarding the implementation of the new Two-Pot System, the Minister of Finance responded on 4 December 2023, and proposed that implementation commence on 1 September 2024, with the Parliament SCoF approving this proposal, on which the National Assembly will have the final vote. This means that the current draft bill will have to be updated and follow the process to become law during 2024.
Glacier Retirement Fund - Member information hub

The retirement savings culture of South Africans first started attracting the attention of the authorities in the 90s, although there are references of discussions on the topic being had as early as the 80s. This led to a focus in legislation during the 2000s where the intention was to protect retirement fund members from themselves in order to better secure their own retirement years. This strategy is known as the Retirement Reforms in South Africa.

As National Treasury explains, the dilemma with the current retirement regime is that individuals are able to make full withdrawals from their pension or when they cease employment, and they can also make once-off withdrawals from their pension preservation or provident preservation fund(s). These withdrawals are taking place irrespective of the tax rates applied upon withdrawal, and leaving South Africans high and dry when it comes to capital to provide an income during retirement. The main reasons for the new system are simply this lack of pre-retirement preservation and then the financial distress of households in the case of emergencies and hardship. 

Which retirement funds will the new two-pot (three-component) system apply to?

All pension, provident, preservation and retirement annuity funds.

Which Glacier retirement funds will the new two-pot (three-component) system apply to?

  • Personal Portfolios Retirement Annuity Fund
  • Personal Portfolios Preservation Provident Fund
  • Personal Portfolios Preservation Pension Fund

What does the new retirement system mean for clients invested in the Glacier Retirement Fund Solution for employer funds?

The Glacier Retirement Fund Solution is a special investment option available to the members of employer funds, who approved this option for their members. The two-pot (three component) system will not influence the investment option availability, but the employer retirement fund will indeed be subject to the new system.

On the Glacier side the investment process will not change. On the retirement fund side, implementation of the new system will be dependent on the applicable retirement fund. Retirement fund members who are clients in the Glacier Retirement Fund Solution, will have to conform to the rules of the retirement fund and the law.

If clients invested in the Glacier Retirement Fund Solution have any questions about implementation of the new system, the best option would be to contact the employer retirement fund directly.

See more about the Glacier Retirement Fund Solution and view some fast facts.

As things develop and become certain on the new system - we will update this page.

Retirement reform insights
Retirement reform in the media
Saving for retirement

Please visit this page regularly for news and summaries.


Retirement reform journey

Retirement reform journey 2012-2024
The retirement reform journey, as explained by National Treasury in the draft Explanatory Memorandum to the Revenue Laws Amendment Bill, 2023 as published on 9 June 2023.

Retirement reform insights

The latest retirement reform insights on Glacier Insights.

Retirement Reform - An overview video - 26 February 2024
Introduction of Member Information Hub - Glacier Weekly - 7 December 2023
Access to Retirement Savings - 1 September 2024 PDF
Two-pot retirement system: Overview PDF
Is the new system applicable to defined benefit funds?
Two-pot retirement system: More on what it is about PDF
The two-pot retirement system - Interactive PDF
What you should know about the two-pot retirement system - Flash Fact PDF
The two-pot retirement system is a few steps closer to becoming a reality in 2024
What we know about Two-Pot Retirement System - PDF
An update on the proposed two-pot retirement system
The South African retirement landscape: Hoping that reconstruction will lead to rehabilitation
Accessing retirement savings prior to retirement – a good idea?


Retirement reform in the media

Retirement reform articles featured in the media.

Overview on the Two Pot Retirement System in the GEPF context. www.gepf.co.za - 26 January 2024
How bizarre: three pots in a two-pot system. FA News - 26 June 2022
Two-pot retirement system: Who will be the winners and the losers? Moonstone - 8 June 2023


Saving for retirement

In 2021 already, the Sanlam Benchmark Survey indicated that about 75% of South African retirees were reliant on state old age grants as their main income source during their golden years. TimesLIVE conducted a survey amongst readers between 28 and 31 July 2021, asking whether people should be allowed access to their retirement savings in order to pay off debts. They reported on 31 July 2021 that 74% of the participants indicated that they needed access, as they feared not even reaching retirement without it. 

Now if 75% of retirees have state grants as their main source of income, and 74% of income earners have the intention of dipping into their savings before reaching retirement, it paints a very bleak picture indeed. Any withdrawal from retirement savings prior to retirement will certainly have a detrimental impact on a client’s retirement, as they will have less capital with which to purchase an income.  And the loss in value should not just be measured by the withdrawn amount.  Savings in retirement funds are protected from creditors, have tax benefits and are not estate dutiable in the event of death before retirement. These benefits, along with the power that compounded interest growth gives to future income, go a long way to ensuring financial security in retirement. There is very little chance of recovering from such a withdrawal in monetary terms, and it is of the utmost importance to not make this decision lightly and certainly not without the professional advice of a financial adviser.

Affording the life you want after your last pay cheque
10 Considerations before putting together your retirement plan
The best investment opportunities in your 20s and 30s
Access a wider range of investment choices in an employer retirement fund
What to know about preservation funds and why you may need one
Saving tips for you no matter your age
Saving for retirement requires a positive mindset
Q&A – Retirement lifestyle costs
Five bad attitudes that prevent you from saving

Glacier Financial Solutions (Pty) Ltd is a licensed financial services provider.
Sanlam Life Insurance Ltd is a licensed life insurer, financial services and registered credit provider (NCRCP43).

Your Next Read

Receive the latest Glacier Insights delivered to your inbox


Please enabled javascript to view Glacier.