Latest News Archive

Please select Category, Year, and then Month to display items
Previous Archive
20 August 2025 | Story Dr Annelize Oosthuizen | Photo Supplied
AnnelizeOosthuizen
Dr Annelize Oosthuizen, Subject Head of Taxation in the School of Accountancy, University of the Free State.

Opinion article by Dr Annelize Oosthuizen, Subject Head of Taxation in the School of Accountancy, University of the Free State 

 


 

With the two-pot retirement system having been effective from 1 September 2024, it is important to demystify certain aspects to prevent an unpleasant surprise when you retire. Although there are other complex rules, this article was simplified and does not deal with exceptions. It also does not deal with members of a provident fund who were 55 years of age or older on 1 March 2021. Furthermore, reference to retirement funds is to a pension fund, provident fund or a retirement annuity fund (a discussion on preservation funds is therefore excluded).

 

Three, not two pots

Firstly, there are effectively three pots and not two.

  • The first pot is referred to as the vested component. You will only have this component if you were a member of a retirement fund prior to 1 September 2024. This component consists of the member’s interest (balance) in the retirement fund on 31 August 2024 (the day before the implementation of the two-pot system) after being reduced with the amount of the seed capital that was transferred to the savings pot (see below).  This seed capital amount was calculated as the lesser of 10% of the value of the member’s interest in the fund on 31 August 2024 or R30 000. No further contributions will be allocated to this component from 1 September 2024. Upon retirement, one-third of the funds in this component can be taken in the form of a lump sum. The balance will be transferred to the retirement component below and will be paid out in the form of monthly annuities. 
  • The second pot is the savings component. The opening balance of the savings component is the seed capital that was transferred from the vested component above. Thereafter, from 1 September 2024, one third of your monthly contributions to the retirement fund are allocated to this component.
  • The third pot is the retirement component. From 1 September 2024, two-thirds of your monthly contributions to the retirement fund are allocated to this component. The funds in this component can only be accessed upon retirement (i.e. after reaching your retirement age, which is stipulated in the fund rules). Furthermore, upon retirement, the money in this pot is only paid out in the form of monthly annuities (i.e. monthly pensions) and no lump sum can be taken from this pot unless its total value is R165 000 or less.

Withdrawals are taxed unfavourably

Secondly, withdrawing from the savings component before retirement has adverse tax implications.

  • From 1 September 2024 onwards, one is allowed to make an annual withdrawal (minimum of R2 000) from the savings component even if you have not yet reached your retirement age and although you are still employed. It is, however, important to remember that such withdrawals are taxed very unfavourably since they are taxed by using the normal progressive tax tables that apply to your other income such as salary. If you wait for your retirement and only withdraw from this savings component upon retirement, the first R550 000 will be tax-free and withdrawals above R550 000 will be taxed at rates much lower than the current progressive tax rates applicable to other income.
  • Upon retirement, only the money in the savings component is allowed to be taken as a lump sum.  If you therefore withdraw all the money from this pot annually prior to retirement, you will not have any funds available to access as a lump sum on retirement and will only have access to the monthly annuities payable from your retirement component.

Less funds available

Lastly, for those members who have a vested component (i.e. who became members of the retirement fund before 1 September 2024), the old rules still apply to the funds in that component. Therefore, upon retirement, you will still be able to take one third of the value of your vested component as a lump sum. The balance will be transferred to the retirement pot and will be paid out in the form of monthly annuities.

To summarise, even though it might appear lucrative to withdraw from your savings component annually, it is advised that you refrain from doing it unless you really need the funds to fulfill basic needs. Withdrawing prior to retirement has the following adverse consequences:

  • Money withdrawn from the savings component is taxed at higher rates than what would have applied had you reached your retirement age and retired. You will therefore not make use of the R550 000 tax-free option.
  • You will have less funds available to pay out as a lump sum on retirement. As a simple calculation, had you not withdrawn R30 000 in a single year, conservatively calculated at a rate of 5%, this R30 000 would have grown to R79 599 (R139 829 if a rate of 8% is used) calculated over 20 years that can be withdrawn tax-free when utilising the R550 000 tax-free portion on retirement.

News Archive

Nuclear Medicine on the forefront of cancer research
2017-07-10

Description: Nuclear Medicine on the forefront of cancer research Tags: Nuclear Medicine, cancer research, Dr Je’nine Horn-Lodewyk’s, tumour detection method, cancer, Department of Nuclear Medicine 

Dr Je’nine Horn-Lodewyk’s tumour detection method
could be the cost-effective breakthrough needed to decrease
the mortality rate in breast cancer patients.
Photo: Anja Aucamp

The field of Nuclear Medicine in South Africa and the rest of the world are expanding rapidly due to the development of hybrid cameras and new radiopharmaceuticals. These developments have a huge impact on the diagnosis and therapy of cancer.

The most advanced of these cameras, Positron emission tomography combined with normal CTs (PETCT), are not yet widely available in South Africa due to the cost of the cameras and the radiopharmaceuticals. A more cost-effective alternative can be of great benefit. To achieve this, the focus should be on developing new radiopharmaceuticals that can be used with the current cost-effective gamma cameras, according to University of the Free State researcher, Dr Je’nine Horn-Lodewyk from the Department of Nuclear Medicine.

Fluorodeoxyglucose (18F-FDG), a radiolabelled glucose analogue, is currently the radiopharmaceutical most commonly used in PET/CT imaging for mainly oncology indications. Although it is considered the gold standard for imaging in several malignancies, it does have certain disadvantages. An 18F-FDG PET/CT diagnostic imaging study can cost between R25 000 and R35 000 for a single patient in the private sector. The 18F-FDG is also more radioactive, which requires much stricter handling and shielding to avoid high radiation dosages to staff and patients.

Successful research potential innovative solution
In the search for the ideal radiopharmaceutical for tumour detection, the South African National Nuclear Energy Corporation (Necsa) developed a local synthesis process for ethylenedicysteine-deoxyglucose (EC-DG). EC-DG is also a glucose analogue similar to FDG. They succeeded in labelling the compound with Technetium-99-metastable-pertechnetate (99mTcO4-), the most common nuclear medicine isotope used for approximately 95% of nuclear medicine procedures, creating 99mTc-EC-DG.

In partnership with Dr Horn-Lodewyk, this compound was successfully used in various animal models and clinical scenarios, resulting in approval by the Medicine Control Council to use it in a human study. Research is also planned in order to investigate diagnostic accuracy in other cancers like lymphoma.  The end result of this research can produce a radiopharmaceutical that is cost effective, does not require the use of costly specialised equipment, has no significant side-effects, no special patient preparation, renders late imaging possible, and has decreased radiation risks.

Dr Horn-Lodewyk is grateful for the support of her mentor, Prof Anton Otto, as well as Dr Gert Engelbrecht, Head of the Department of Nuclear Medicine, Prof Jan Rijn Zeevaart from North-West University’s Preclinical Drug Development Platform and Necsa, and Judith Wagener from Necsa. This innovative research would also not have been possible without the financial assistance of Dr Glen Taylor and Eleanor van der Westhuizen in the Directorate of Research Development.

We use cookies to make interactions with our websites and services easy and meaningful. To better understand how they are used, read more about the UFS cookie policy. By continuing to use this site you are giving us your consent to do this.

Accept