Members over 55 on 1 March 2021
How does the two-pot system apply to a member who was member of the UCTRF who was 55 or older on 1 March 2021 (i.e. born before 1 March 1966)?
You will NOT automatically be included in the Two-Pot System!
You may elect participate in the Two-Pot System.
If you don’t elect to participate in the Two-Pot System:
• All your contributions after 1 September 2024 will continue to be allocated to the Vested Share in your Vested Pot;
• You will not have a Savings Pot and will not be able to withdraw anything while you are still employed.
• You will be able to take your full benefit as a lump sum on retirement (subject to tax).
If you do elect to participate in the Two-Pot System:
• Contributions made from the date you make your election onwards, will be split between your Savings Pot and Retirement Pot.
• Your seed capital will be 10% of our Accumulated Retirement Savings, as at 31 August 2024, subject to a maximum of R30 000.
• You must use your Retirement Pot to buy a pension.
• You can take the balance of your Accumulated Retirement Savings as a lump sum on retirement (subject to tax).
You have 12 months from 1 September 2024 to elect to opt in to the Two-Pot System. If you do not opt in before 1 September 2025, then you will not be able withdraw any money from the UCTRF until you retire.
What must I do if I want to opt in to the Two Pot System?
You will need to complete Alexforbes’ opt in form on https://uctrf.co.za/uctrf/forms and send the completed form to 2PotOver55Optin@alexforbes.com. Note that you will only be able to withdraw from your Savings Pot in the month following Alexforbes’ receipt of your opt in form.
Why is a member who is 55 years and over on 1 March treated differently?
Because the UCTRF is a Provident Fund, before 1 March 2021, all members could be paid their entire benefit as a lump sum on retirement.
From 1 March 2021 (also called T-Day) this changed for members under 55 on that date. Their Accumulated Retirement Savings were split between a Vested Share and a Non-Vested Share. The Vested Share is all the member’s savings up to 28 February 2021, plus interest and the Non-Vested Share is all the member’s savings in the UCTRF from 1 March 2021 up to 31 August 2024 plus interest. The member can still take their Vested Share as a lump sum on retirement, BUT they can only take 1/3rd of their Non-Vested Share as a lump sum and they have to use the rest to buy a pension.
However, the rules are different if you were over 55 on 1 March 2021. In this case you only have a Vested Share and contributions made after 1 March 2021 are allocated to your Vested Share. You are still allowed to take your entire Accumulated Retirment Savings as a lump sum on retirement.
If you fall into this group of members you can opt into the Two-Pot System from 1 September 2024. If you do not opt into the Two-Pot System you can carry on contributing to your Vested Share in your Vested Pot after 1 September 2024.
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