RETIREMENT ANNUITIES

From 1st September 2024 your Retirement Annuity contributions and growth will be split into THREE POTS, your VESTED POT, SAVINGS POT, and your RETIREMENT POT. Also known as the TWO POTS.
These rules will apply to all types of Retirement funds i.e., Provident funds, Pension Funds and Retirement Annuities.

VESTED POT EXPLAINED:
All Retirement Annuity contributions and growth up until the 30th of August will be called your VESTED POT
On Retirement You can withdraw a one third (1/3) lumpsum from your VESTED POT. A R550 000 TAX FREE benefit will be available.
You will pay normal Retirement lumpsum Tax tables over the R550 000 TAX FREE amount.
You will need to purchase a monthly annuity income from the remaining two third (2/3) amount.

SAVINGS POT EXPLAINED:
One Third (1/3) of your Retirement Annuity fund contribution will allocate towards your SAVINGS POT (access pot)
A withdrawal is allowed once a year for emergency purposes.
The amount withdrawn will be taxed as income tax at your marginal tax rate.
A minimum of R2000 must be withdrawn.
You can ad your SAVINGS POT towards your RETIREMENT POT at Retirement.
At Retirement you can withdraw your SAVINGS POT, R550 000 will be available as TAX FREE. Normal Retirement lumpsum Tax tables will apply.

SEEDING CAPITAL EXPLAINED:
10% of your VESTED POT up to the max of R30 000 will be allocated towards your SAVINGS POT.

RETIREMENT POT EXPLAINED:
Two Third’s (2/3) of your Retirement Annuity contributions will allocate towards your RETIREMENT POT.
Your RETIREMENT POT can only be accessed as a monthly annuity income once you retire from the age of 55 or onwards.
No Lumpsum withdrawals are allowed in your RETIREMENT POT.

Important notes at this point:
All EXISTING RETIREMENT ANNUITY individuals who have reached the age of 55 will not be allowed an OPT OUT option.
Existing PRESERVATION FUND,LIVING ANNUITY AND GUARANTEED INCOME members are not affected by these new changes. The old rules still apply.