The "two-pot" retirement system in South Africa is a significant reform designed to provide greater flexibility for retirement fund members while also encouraging long-term savings. Here's a breakdown of the key aspects:

Core Objectives:

• Balancing Needs:

  • The system aims to address the issue of individuals needing to access retirement funds due to financial hardship before reaching retirement age.

  • It also seeks to preserve retirement savings to ensure financial security in later life.

• Preventing Premature Withdrawals:

  • Historically, many people would resign from jobs simply to access their retirement funds, which severely impacted their long-term financial stability. The two-pot system aims to mitigate this.