Can I cash out my retirement savings when I resign?

From 1 September 2024, new rules came into effect under the two-pot retirement system. These rules apply to all YX Employee Benefit Fund members (unless you were 55 or older on 1 March 2021 and chose not to opt in).

The key change is that you can no longer take all your retirement money when you leave your job. The law now requires you to preserve most of your savings so you’ll still have an income when you retire.

How Your Savings Are Split Under the Two-Pot System

1. The Vested Pot

• What it is: Savings built up before 31 August 2024 (plus growth).
• Access when leaving: You can take it in cash (tax applies), transfer it to another retirement fund, keep it in the YX EB Fund, or split between cash and transfer.

2. The Savings Pot

• What it is: One-third of all new contributions from 1 September 2024 onwards.
• Access when leaving:
  • If you haven’t withdrawn this tax year, you can take the full balance when you resign.
  • If you’ve already withdrawn and the balance is under R2,000, you can still take it.
  • If it’s R2,000 or more, you’ll need to wait until the next tax year.

3. The Retirement Pot (Preserved Portion)

• What it is: Two-thirds of all new contributions from 1 September 2024 onwards.
• Access when leaving: You cannot take this money before retirement. It’s locked in to provide you with an income from age 55 onwards.

The Bottom Line

When you resign before retirement age, you can usually access:

• All of your Vested Pot
• Your Savings Pot balance (within the annual withdrawal rules)

But your Retirement Pot is preserved by law and must stay invested until you retire. These changes were introduced to protect your future income and reduce the risk of leaving retirement underfunded.

Want to understand how this affects your savings?

For queries or claims, you can:

• Call toll-free: 080 555 5555
• Email: info@xyz.co.za
• WhatsApp: 083 555 5555
• Or connect with your YX Benefit Counsellor