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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

Research on locomotion of giraffes valuable for conservation of this species
2016-08-23

Description: Giraffe research 2016 Tags: Giraffe research 2016

Technology was used in filming the giraffes.
According to research, giraffes will slow
down when a drone is positioned
approximately 20 - 30 m away. When the
drone moves closer, they will revert
to galloping.
Photo: Charl Devenish


The meaning of the Arab term Giraffe Camelopardalis is ‘someone who walks fast’. It is precisely this locomotion of their longnecks that encouraged researchers, Dr Francois Deacon and Dr Chris Basu, to study the animals more closely.

Despite the fact that giraffes are such well-known animals, very little research has been done on the manner in which these graceful animals locomote from one place to the next. There are only two known ways of locomotion: the slower lateral walking and the faster galloping. Most animals use these ways of moving forward. It is unknown why giraffes avoid intermediate-speed trotting.

Research of great value to the industry

Research on the manner in which giraffes locomote from one place to the next will assist the industry in understanding aspects such as their anatomy and function, as well as the energy they utilise in locomoting from one place to another. Information on the latter could help researchers understand where giraffes fit into the ecosystem. This data is of great value for large-scale conservation efforts.

Universities working together to collect data

Dr Basu, a veterinarian at the Royal Veterinary College in the UK, has studied the animals at a zoo park in the United Kingdom. He visited the University of the Free State (UFS) in order to expand his fieldwork on the locomotion of giraffes. This study was done in cooperation with Dr Deacon from the Department of Animal, Wildlife, and Grassland Sciences at the UFS. Dr Deacon is a specialist in giraffe habitat-related research in South Africa and other African countries.

The fieldwork for the research, which was done in the Woodland Hills Wildlife Estate and the Willem Pretorius Nature Reserve, preceded research on the movement and the forces involved in the locomotion of giraffes. Due to the confined fenced area in the zoo park, it was practically impossible to study the animals at speed. “The study of actions ‘faster than walking’ is crucial for gathering data on, inter alia, the frequency, length, and time associated with each step.


Technology such as drones offers unique
opportunities to study animals like giraffes.



Technology used to ensure accuracyTechnology such as drones offers unique opportunities to study animals like giraffes. Apart from the fact that it is possible to get high-quality video material of giraffes – moving at speed – it is also a very controlled device that ensures the accuracy of data.

It is the first time ever that a study has been done on the locomotion of giraffes with this level of detail.
Research on the study will be published in the Journal of Experimental Biology.

The project was approved by the UFS ethics committee.

 

 

 

Previous research articles:

9 March 2016:Giraffe research broadcast on National Geographic channel
18 Sept 2015 Researchers reach out across continents in giraffe research
29 May 2015: Researchers international leaders in satellite tracking in the wildlife environment


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