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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

Traffic in translation between French and Afrikaans follows unique direction
2017-11-21

 Description: Traffic in translation between French and Afrikaans  Tags: Traffic in translation between French and Afrikaans

At Prof Naòmi Morgan’s inaugural lecture were, from the left:
Profs Corli Witthuhn, Vice-Rector: Research; Morgan;
Heidi Hudson, Acting Dean of the Faculty of the Humanities;
and Angelique van Niekerk, Head of the Department of Afrikaans
and Dutch, German and French.
Photo: Stephen Collett

Translation is normally done from a so-called weaker language into a mightier one. This is one of the ways, according to author Antjie Krog in her book A Change of Tongue, which is used by a ‘weaker’ language to help it survive.

However, according to Prof Naòmi Morgan, Head of French in the Department of Afrikaans and Dutch, German and French at the University of the Free State (UFS), this is not the case with French, which is the mightier language, and Afrikaans.

Influence of translators on Afrikaans

“The number of translated titles from French into Afrikaans, from ‘great’ into ‘lesser’ language, is far more than the other way round, almost as if the translators wanted to make the Afrikaans-speaking readers literary self-sufficient, but did not feel the same need to extend the Afrikaans literature into other languages.”

This was Prof Morgan’s words on 8 November 2017 during her inaugural lecture entitled, Van Frans na Afrikaans: 100 jaar van byna eenrigting-vertaalverkeer, in the Equitas Auditorium on the Bloemfontein Campus. A PowerPoint presentation, with a symbolic background of the South African and French flags and relevant texts, formed part of her lecture. She also played video clips and pieces of music to complement it.

Among others, she has a doctorate in Modern French Literature from the University of Geneva, and her translations have earned her a French Knighthood and various prizes. She is also well-known for her translations and involvement in dramas such as Oskar en die Pienk Tannie and Monsieur Ibrahim en die blomme van die Koran.

Greater challenges in this direction

In her lecture, she looked at the two-way traffic from French into Afrikaans and from Afrikaans into French.

Three French citizens, Pierre-Marie Finkelstein, Georges Lory, and Donald Moerdijk, have translated from Afrikaans into French. Of course, their background and ties with South Africa also had an influence on their work. “In Moerdijk’s case, translation from Afrikaans, his second language, was a way in which to recall the country he left in his mind’s eye,” she said.

Prof Morgan is one of only two translators who translates works from Afrikaans into French, the other being Catherine du Toit. However, translations in this direction pose greater challenges. She said it involves “not only knowledge of the language, but also knowledge of the French target culture and literature”. In addition, there aren’t any good bilingual dictionaries, and the only Afrikaans-French dictionary is a thin volume by B Strelen and HL Gonin dating from 1950.

Prof Morgan still believes in translation

She believes there is a need to hear foreign languages such as French in the form of music in Afrikaans, and the speaking of a language alone might not be enough to ensure its survival. 

She still believes in translation, and quoted Salman Rushdie’s Imaginary homelands: essays and criticism 1981-1991 in this respect: “The word ‘translation’ comes, etymologically, from the Latin for ‘bearing across’. Having been borne across the world, we are translated men. It is normally supposed that something always gets lost in translation; I cling, obstinately to the notion that something can also be gained.”

Click here for Prof Morgan’s full lecture (only available in Afrikaans).

 

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