How the two-pot pension system is leading to a surge in complaints
Muvhango Lukhaimane, the Pension Funds Adjudicator.
Image: Supplied
Complaints to the Office of the Pension Funds Adjudicator (PFA) rose 13% year-over-year, in part due to issues with the two pot retirement scheme.
The complaints included issues about processing delays caused by, among other things, employers owing arrear contributions.
“While the implementation of the two-pot system has been successful, a further rise in complaints related to two-pot withdrawals is anticipated in the 2025/26 financial year," said Muvhango Lukhaimane, the Pension Funds Adjudicator.
This comes as Cosatu is suggesting several major changes to help workers in financial distress.
During a recent report back by the Select Committee on Finance on the Revenue Laws Amendment Bill for 2025, the trade union federation wants its members to have more access to money.
Last September, the regime was introduced whereby pension funds were split between a savings pot and a vested pot. R30 000 of the amount of pension savings people already had was moved into a “savings” pot, with a third of every contribution now going into that pot.
As a result, investors can make yearly withdrawals of a minimum of R2 000 from their savings account. The PFA said that funds received a significant number of two-pot withdrawal applications from members.
“However, there were processing delays, as some funds underestimated the uptake, whilst some could not pay the claims as employers owed arrear contributions,” it said.
The PFA received 239 two-pot related complaints from September 2024 to March 2025, excluding enquiries.
According to the Reserve Bank of South Africa, the reforms have even boosted tax revenue.
And the South African Revenue Service indicated that, as of the start of this year, R43.42 billion after tax had been paid out under the new regime to 2.4 million South Africans.
This figure, some reports indicate, has grown to R57 billion paid out to as many as four million people.
For context, there were around seven million South Africans contributing to retirement savings as of 2022.
To withdraw cash, people need tax clearance from the revenue service, and any outstanding tax needs to be settled.
According to the PFA’s 2024/5 annual report of the of the OPFA, the pensions dispute resolution forum received 10 331 new complaints (9177 in the previous year) and disposed of 10 100.
“The primary contributor to a surge in complaints was the introduction of the two-pot retirement system on 1 September 2024,” it said.
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