Unlocking Retirement Future: Explore Two-Pot System Details

PRESENTATION 5 APRIL 2024 U N L O C K I N G Y O U R R E T I R E M E N T F U T U R E : E X P L O R I N G T H E T W O - P O T S Y S T E M

HOUSE RULES While waiting for others to come in, here are some rules and reminders to keep in mind. 1 2 3 Turn off your camera and microphone 02 03 04 01 Feel free to type your questions in the chat box. Questions will be entertained at the Q&A after the presentation.

W H A T W I L L B E C O V E R E D ? 1. What is Two-Pot? 2.Why the Two-Pot System? 3.How will it work? 4.What is Seed Capital? 5.Who qualifies for it? 6.What is the impact of withdrawing funds? 7.What to consider 8.Smooth Withdrawals: Providing Tax & Contact Numbers 9.Our Contact Channels

ABOUT THE SPEAKER Khumbulani Moyo - Chairperson of the Communications Sub Committee of the PSSPF He is the Chairperson of the Communications Committee of the PSSPF, with membership in the Legal and Governance Committee. He carries 22 years of industry experience, ranging from General Security Officer to Union Official and National Coordinator at KAWU which underscores his comprehensive understanding of the Private Security Sector. With Tertiary qualifications in Business Administration and honors in Business Management, he brings extensive academic expertise. He also serves as deputy chairperson in the National Bargaining Counsel for the Private Security Sector

WHAT IS TWO-POT? The two-pot retirement system is a reform enabling retirement fund members to make partial withdrawals from their retirement funds before retirement. Simultaneously, it safeguards a portion that remains accessible only upon retirement, therefore enhancing overall retirement outcomes. This means that members facing financial hardship need not resort to resigning to access a portion of their retirement benefits. The implementation of this reform is planned to commence on 1 September 2024.

WHY THE TWO-POT SYSTEM? This system is aimed to help you save for retirement over time, while also giving you the option to use some of your savings if you're struggling financially. Many people only have their retirement savings to rely on. Right now, others end up resigning from their jobs just to get access to this money to pay off debts. But that's not good for planning for the future. The two-pot system lets you dip into your savings early if you really need to, but it is best to do this only if it is really necessary. And do not worry, it keeps some of your savings safe for when you retire.

HOW WILL IT WORK? Your retirement contributions will be divided into three pots. Your accumulated retirement savings until 31 August 2024, will be allocated to a vested pot. Starting 1 September 2024: One-third of your new contributions will be allocated to your savings pot. This pot will receive a once-off transfer from your vested component (Seed Capital), which is at least 10% of your retirement fund's value as of 31 August 2024 to a maximum of R30,000. The remaining two-thirds of all new contributions will be allocated into a retirement pot. These contributions, along with all subsequent growth and earnings, will not be accessible until retirement. At retirement, these savings are to be utilized to purchase a retirement income, unless legislated minimum values apply. For Example, if you contribute R1,500, R1,000 will be allocated to your retirement pot, and R500 will be allocated to your savings pot. Access to your savings pot will only be granted once its balance reaches a minimum value of R2,000, excluding any contributions made before 31 August 2024.

HOW WILL IT WORK? Retirement Pot Vested Pot Savings Pot Accumulated until 31 August 2024 No further contributions Remains invested by retirement fund Vested right maintained for future resignation or transfer to preservation fund Accessible anytime Minimum withdrawal: R2,000 One withdrawal per tax year Taxed at individual's marginal tax rate No maximum withdrawal limit Accessible only at retirement Preserved until retirement; Cannot be accessed upon resignation

WHAT IS SEED CAPITAL? At the inception of the two-pot system, a seeding capital, amounting to 10% of your fund value as at 31 August 2024, or R30,000, whichever amount is lower, will be allocated to the savings pot. This allocation serves as an initial transfer and will not be repeated in the following years. For Example, suppose your fund value on 31 August 2024 is R100,000. In this case, the seeding amount will be R10,000, calculated as 10% of R100,000. Now, consider another member with a vested component fund value of R450,000. In this scenario, the seeding amount will be R30,000. Although 10% of R450,000 equals R45,000, it is capped at R30,000.

TWO-POT

WHO QUALIFIES? The transition to the Two-Pot Retirement System will be automatic for all retirement fund members, except for individuals who were 55 years old as of 1 March 2021. Provident Fund members aged 55 and above as of 1 March automatically be included in the two-pot system. However, they have the option to opt-in if they desire by submitting an application to the fund. Once they elect to join the two-pot system, this decision cannot be reversed. 2021, will not

IMPACT OF WITHDRAWING FROM THE SAVINGS POT Withdrawals from the savings pot will be taxed as member's taxable income, based on their marginal tax rate. It is advised that these funds reserved for genuine emergencies rather than day-to-day expenses. part of the should be

WHAT TO CONSIDER Carefully consider your options and seek advice from an advisor. Try to save as much as you can when you can. Do not make hasty decisions to take a withdrawal. If you wait to withdraw money from the savings component until retirement, it will attract less tax. Prioritize your retirement avoiding actions not in your best interest, as prolonged investment yields greater benefits over time. accredited financial savings,

DELAYS IN CLAIM PROCESSING: PROVIDING TAX AND CONTACT NUMBERS NO TAX & CONTACT NUMBERS TAX & CONTACT NUMBERS Your claim will be delayed when the administrator does not have the correct contact number ..PLEASE ensure you update this with the Fund when you change numbers. Tax and contact numbers are required by law for compliance and claims without tax number cannot be finalized. Send your tax numbers and any updated contact details on WhatsApp to the Fund on 076 386 0747 REMEMBER, PROVIDING TAX NUMBERS IS THE KEY TO A HASSLE-FREE WITHDRAWAL PROCESS!

BENEFIT STATEMENTS AVAILABLE FROM JULY 2024 MEMBER BENEFIT STATEMENT Mark Your Calendar: Digital benefit statements will be issued starting from 1 July 2024! Access your statements anytime, anywhere, from any digital device via the member portal. Beneficiary Nomination Forms will be attached to your statements. Send your beneficiary nomination forms directly to the Fund via WhatsApp on 076 386 0747. STAY ALERT! Look out for communications regarding the distribution of printed benefit statements.

ENGAGE WITH US Front Offices Call Centre Member Portal Social Media Road Shows Front offices in 5 major cities i.e. JHB, BLOEM, CT, DURBAN & PE Call centre available from 08:00 to 16;00 Monday to Friday: Social media engagement via Facebook Attend one of our roadshows and engage with us directly Web portal to access information WhatsApp Self Service - online chat centre: 0872407006

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