Two-Pot Rules by Fund Type
The two-pot framework applies across the South African retirement landscape, but each vehicle has nuances. Here is how pension funds, provident funds, retirement annuities, preservation funds and the GEPF are treated.
Pension funds
Occupational pension funds are fully inside the two-pot system. From 1 September 2024, one-third of contributions go to the Savings Component and two-thirds to the Retirement Component, with your prior balance protected in the Vested Component. At retirement, the Retirement Component must be annuitised, while up to one-third of the total may historically be commuted to cash subject to the lump-sum tables.
Provident funds
Since the 2021 retirement reform aligned provident funds with pension funds, they now follow the same two-pot split. The important exception is members who were 55 or older on 1 March 2021 and remained in the same provident fund: they may elect to stay entirely under the vested rules, meaning new contributions continue into the Vested Component and they do not participate in the two-pot split unless they choose to.
Retirement annuities (RAs)
RAs — individual retirement products you fund yourself — are included in the two-pot system on the same one-third / two-thirds basis. The practical difference is that RA contributions are often irregular or lump-sum, so your Savings Component grows in step with whatever you contribute. RA holders also benefit from the same marginal-rate tax treatment on Savings withdrawals.
Preservation funds
Preservation funds hold benefits transferred when you leave an employer. Under the old rules you were entitled to one full or partial withdrawal before retirement. Under two-pot, amounts preserved before the effective date keep their vested treatment (including that legacy withdrawal right), while any new two-pot contributions transferred in follow the Savings/Retirement split. This makes preservation funds some of the most nuanced vehicles — check your specific certificate of membership.
The Government Employees Pension Fund (GEPF)
The GEPF is a defined-benefit fund governed by the Government Employees Pension Law, not the Pension Funds Act. Its participation in the two-pot system follows a separate legislative process and timeline, and the mechanics of seeding and withdrawals differ from private-sector defined-contribution funds. GEPF members should rely on official GEPF communications for the precise rules and dates that apply to them; the calculators on this site are built around the private-sector defined-contribution model.
Which rules apply to you?
- Private-sector pension, provident or RA member → the standard two-pot split and the withdrawal calculator apply directly.
- Provident member 55+ on 1 March 2021 → confirm whether you opted into two-pot before relying on Savings withdrawals.
- Preservation fund member → distinguish vested legacy rights from new two-pot contributions.
- GEPF member → follow official GEPF guidance for your timeline.
Fund-specific rules can differ and change. Confirm your treatment with your administrator or fund. This is general information, not financial advice.