What are my retirement pot choices when I leave my job and my fund?

When you leave an employer and an employer-sponsored fund (pension, provident or umbrella fund), you will have to decide what to do with your retirement savings in the different pots under the two-pot retirement system which came into effect on 1 September 2024.

Your options will depend on:

• The type of fund to which you belong;
• How much of your savings you decide to preserve;
• How much you have in your pots; and
• Whether you have withdrawn from your savings pot already in the tax year.

Your retirement savings will be divided into three components or pots if:

• You belong to a pension fund;
• You are a provident fund member who was under the age of 55 on 1 March 2021, or
• You are a provident fund member who was older than 55 on 1 March 2021 but you opted into the two-pot system before 1 September 2025.

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Remember the three pots are:

• The vested component/ pot: Your savings accumulated in the fund before 1 September 2024.
  
  
• The savings component/ pot: One-third of all contributions to the fund made from 1 September 2024 onward.
  
  
• The retirement component/ pot: Two-thirds of all contributions to the fund from 1 September 2024 onward.

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These are the options available to you when you leave your employer and the fund your employer sponsors before retirement:​

Preserving your savings

1.  STAY IN YOUR EXISTING FUND

Depending on your fund type, these are your options:

a) As a member of a pension fund or provident fund with pots:

• You can keep your savings in the fund and become a paid-up member of the fund.
  
  
• This means your savings will continue to grow with investment returns, but no new contributions can be made to the fund by you or your former employer.
  
  
• Keeping your savings in your existing fund allows you to enjoy the typically lower fees that employer-sponsored or umbrella funds enjoy.
  
  
• Savings in your fund are not accessible by your employer and funds are regulated by the Financial Sector Conduct Authority. Employers can only ask funds to withhold benefits for damages you have caused as a result of theft, fraud, dishonesty or misconduct, and only when strict criteria are met.
  
  
• It is your responsibility to keep the fund informed of your contact details so that they can keep sending you your statements.
  
  
• If you need to, you can make withdrawals from the savings pot annually, as long as you have at least R2 000 in the savings pot to withdraw.
  
  
• You can transfer to a new fund at any time.
  
  
• You will not incur any tax if you remain in your existing fund and your money will continue to grow tax free.
  
  

b) As a member of a group retirement annuity (RA) fund you can continue your membership of that retirement annuity (RA) fund in your own name.

• You can continue to make contributions to the fund.
  
  
• If you need to, you can make withdrawals from the savings pot annually as stipulated in the RA contract and as long as you have at least R2 000 in the savings pot to withdraw.
  
  
• You will not incur any tax if you continue to save in this fund and your money will continue to grow tax free.
  
  
• You can transfer to a new RA fund at any time.

2.  TRANSFER TO A NEW FUND

a) If you are a member of a pension fund:

• You can transfer your accumulated savings to a new employer's pension or provident fund – all three pots will be transferred to the same pots within the new employer’s fund.

• • You will still have the right to withdraw anything in your vested pot on resignation from your new job.
    
    
  • You will still have the right to withdraw from the savings pot once a year as long as you have at least R2000 in the savings pot.
    
    
• You can transfer your savings to a preservation fund – all three pots will be transferred to the same pots within the preservation fund.
  
  
  • You will have the right to make one withdrawal from your vested pot before retirement, but you will not be able to withdraw anything in your retirement pot.
    
    
  • You will still have the right to withdraw from the savings pot once a year as long as you have at least R2 000 in the savings pot.
    
    
• You can transfer your savings to a retirement annuity fund – all three pots will be transferred to the same pots within the RA fund.
  
  
  • You will still have the right to withdraw from the savings pot once a year as long as you have at least R2000 in the savings pot.
    
    
  • You won’t be able to withdraw from the vested or retirement pots until age 55 (subject to some exceptions).
    
    
• Your savings will continue to grow tax-free.
  
  
• You will not be liable for any tax on any of these options.

• You cannot transfer different pots to different funds – the transfer must be to one fund.
  
  

c) If you are a member of a provident fund and you were younger than 55 on 1 March 2021, or you were 55 or older on 1 March 2021 and opted into the two-pot system before 1 September 2025:

• You can transfer your savings to a new employer's retirement fund, transferring all three pots to the same pots within the new employer’s fund.
  
  
  • You will still have the right to withdraw anything in your vested pot on termination of your employment before retirement.
    
    
  • You will still have the right to withdraw from the savings pot once a year as long as you have at least R2 000 in the savings pot.
    
    
  • You will still have the right to withdraw in cash all the savings you made before 1 March 2021 (plus the fund return on that) in cash at retirement.
    
    
• You can transfer your savings to a preservation fund – all three pots will be transferred to the same pots within the preservation fund.
  
  
• You can transfer your savings to a retirement annuity (RA) fund – all three pots will be transferred to the same pots within the RA fund.
  
  
  • You will still have the right to withdraw from the savings pot once a year as long as you have at least R2 000 in the savings pot.
    
    
  • You won’t be able to withdraw from the vested or retirement pots until age 55.
    
    
  • You will still have the right to withdraw in cash all the savings you made before 1 March 2021 in cash at retirement. This amount will be in your vested pot.
    
    
• Your savings will continue to grow tax-free.
  
  
• You will not be liable for any tax on any of these options.
  
  
• You cannot transfer different pots to different funds – the transfer must be to one fund.

d) If you are a member of a group retirement annuity fund:

• You can stop contributions to the fund and make it paid up – be sure to check the terms of your contract before you do.
  
  
• You can transfer to another RA fund (as long as you did not enter any contract to save for a particular period in the fund).
  
  
• Making the fund paid-up or transferring to a new RA fund will not incur any tax and your savings will continue to grow tax free.

Take some cash

As a pension or provident fund member who is part of the two-pot system, these are your options with the three different pots: 

• Vested component
  You can withdraw all the money in this component when you leave employment and your employer-sponsored retirement fund, but it will be subject to tax. The tax you will pay will be based on the lump sum withdrawal tax table.

If you take only a portion of the vested pot, you must transfer the balance as well as your retirement pot to a new fund.

You cannot remain in your current fund as a paid-up member.

If you are a provident fund member who has a vested right to take the vested component in cash at retirement, this right will remain open to you when you retire from the new fund.

If you take all of the vested pot, you can leave the other two pots in your existing fund or transfer them to a new fund.

• Savings component 

You can withdraw from your savings pot as long as you have not already made a withdrawal from the savings pot in the same tax year.

Savings pot withdrawals while you are a member of a fund are limited to withdrawals of at least R2000.

As an exception to this rule, if you are leaving a fund and you have less than R2000 in your savings pot, you can still withdraw it even if you have already made a savings pot withdrawal in the same tax year.

Your withdrawal from the savings pot will be taxed at your marginal tax rate.

• Retirement component

You cannot take any cash from this pot until retirement.