(i.e. born before 1 March 1966)

How does the two-pot system apply to a member of the UCTRF who was 55 or older on 1 March 2021? 

You will NOT automatically be included in the Two-Pot System! If you were a member of the UCTRF on 31 August 2024, you had the option, between 1 September 2024 and 1 September 2025, to elect to participate in the Two-Pot System.

If you did not 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 did elect to participate in the Two-Pot System or if you joined the UCTRF on or after 1 September 2024:

•       Contributions made, from the date you make your election (or the day you joined the UCTRF) and onwards, will be split between your Savings Pot and Retirement Pot.

•       Your seed capital allocated to your Savings Pots will be 10% of our Accumulated Retirement Savings, as at the date you elected to participate in the Two-Pot System, subject to a maximum of R30 000. (This is not applicable if you joined the UCTRF after 1 September 2024.)

•       You must use your Retirement Pot to buy a pension (subject to tax limits).

•       You can take the balance of your Accumulated Retirement Savings as a lump sum on retirement (subject to tax).

Why is a member who was born before 1 March 1966 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 Retirement Savings as a lump sum on retirement.

If you fall into this group of members you had the option, between 1 September 2024 and 1 September 2025, to elect to participate in the Two-Pot System.

If you were born before 1 March 1966 and joined the UCTRF on or after 1 September 2024, your “Vested” only status applicable to your contributions that applied in any previous Provident Fund ceased on joining UCTRF and all Future Contributions are split between your Savings Pot and Retirement Pot.