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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