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20 August 2025
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Story Dr Annelize Oosthuizen
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Photo Supplied
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.
Top class musicians appointed for UFS Odeion String Quartet
2008-01-29
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The three new members of the Odeion String Quartet are, from the left: Jeanne-Louise Moolman (alto violinist), Denise Sutton (leader and first violinist), and Sharon de Kock (second violinist).
Photo: Lacea Loader
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Top class musicians appointed for UFS Odeion String Quartet
The University of the Free State (UFS) has recently appointed three top class musicians for the Odeion String Quartet. The quartet, which was formed in 1991, is the only resident quartet at a South African university.
The new persons who were appointed are: Denise Sutton, first violinist and leader of the string quartet, Jeanne-Louise Moolman, alto violinist, and Sharon de Kock, second violinist. The post of cellist was recently advertised and applications can be submitted at the UFS until 29 February 2008.
The new appointments follow after three former members of the quartet retired or left Bloemfontein at more or less the same time. Michael Haller, longtime cellist of the quartet, will also be retiring at the end of 2008.
These developments means that the Odeion String Quartet will literary be brand new. It also implies that opportunities exist for learners and students to be taught by excellent new lecturers. The new players will also strengthen the Free State Symphony Orchestra to a large extent.
“The Odeion String Quartet is a flagship of the UFS and it symbolises our commitment to the arts. It also plays an important strategic role in the development of symphony orchestra music and classical music training in the Free State. This is why a real attempt was made to obtain top class musicians. We are pleased that such a strong group could be appointed,” said Prof. Frederick Fourie, Rector and Vice-Chancellor of the UFS and chairperson of the String Quartet’s management committee.
Most string quartets abroad are affiliated with a higher education institution, which enables a higher level of playing as there is more time for preparation and to study the repertoire. “We appreciate the university’s confidence in us and for the opportunity to explore the intricacies of ensemble playing. We hope that we can produce inspiring performances for our audiences and students,” said Denis Sutton, new leader of the string quartet.
Denise Sutton studied at the University of Stellenbosch (US) and obtained the degree B.Mus. with distinction. After this, she studied in Amsterdam with Theo Olof and Nap de Klijn, as well as in London. She was leader and second violinist in the Scottish Chamber Orchestra and did a successful audition for the English Chamber Orchestra. In South Africa she had a long career as concert master and leader of symphony orchestras. From 1980 she was concert master of the TRUK Orchestra for almost twenty years and from 2000 until 2005 she was member of the Johannesburg Festival Orchestra and the Chamber Orchestra of South Africa (COSA). She was also a founding member and leader of the Rosamunde String Quartet, one of the leading string quartets in the country. Denise had a very successful parttime teaching practice at the University of Pretoria (UP) and at a number of schools. She was also involved in postgraduate training. Her students include various competition winners and a number of them are playing professionally.
Jeanne-Louise Moolman studied at the UP under Prof. Alan Solomon where she obtained the B.Mus and B.Mus.Hons. degrees with distinction. She won among others the ATKV Forté and the Oude Meesters competitions and in 1985 she was the first winner of the prestigious 75th Commemorative Prize of the University of Natal. She has about twenty years experience as head alto violinist of various professional orchestras in Gauteng. Until her appointment at the UFS she was leader of the alt violinists in the Johannesburg Philharmonic Orchestra and COSA. She is an experienced chamber musician who regularly performs in various combinations with some of South Africa’s leading musicians. This includes Gerard Korsten, Phillipe Graffin, Jürgen Schwietering, the pianists Lamar Crowson and Albie van Schalkwyk, as well as clarinet player Robert Pickup. Jeanne-Louise was also a founding member of the Rosamunde String Quartet. She lectured on a part time basis at the UP and the Pro Arte Music School.
Sharon de Kock obtained the degrees B.A. Mus. and M.Mus. at the College-Conservatory of Music (CCM) of the University of Cincinnati in the United States of America (USA) in 2002 and 2004 respectively. Some of her teachers include the well-known concert violinist Chee-Yun Kim, Prof. Kurt Sassmannshaus and Piotr Milewski, all alumni of Julliard. From 2004 to 2006 she was violinist lecturer at two universities and a music conservatorium in Puebla, Mexico. She was also violin lecturer at a music school in Costa Rica and was associated with the Hugo Lambrechts Centre in Cape Town since 2007. Her orchestra participation includes among others the Opera Orchestra in Trujillo, Peru, the Sinfonica Nacional de Costa Rica in Costa Rica, as well as the Kentucky Symphony Orchestra, the Richmond Symphony Orchestra and the Dayton Philharmonic Orchestra. She also participated in the Luca Music Festival in Italy, the Grandin Music Festival in Portugal, the Pacific Music Festival in Japan and the Aspen Music Festival in the USA. Sharon performed regularly abroad as soloist and received various awards. This includes among others the CCM chamber music competition 2003 and the Baur Orchestral Competition and Heermann competition winner for violin at the CCM in 1995. In 1990 she won the first prize in the Sanlam competition.
The first official performance of the “new” Odeion String Quartet will be in May this year in Bloemfontein. Hopefully the new cellist will be appointed by this time. Members of the quartet will however perform on Friday, 1 February 2008 together with Albie van Schalkwyk and guest cellist Marian Lewin at 19:30 in the Odeion, as well as in the upcoming Spanish Music Festival held in February and March 2008. In May 2008 the quartet will participate in Zimbabwe in the Bulawayo Festival.
Media Release
Issued by: Lacea Loader
Assistant Director: Media Liaison
Tel: 051 401 2584
Cell: 083 645 2454
E-mail: loaderl.stg@ufs.ac.za
29 January 2008
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