Understanding the MIBFA Two-Pot System for Pension and Provident Funds
The new two-pot system is set to launch on 1 September 2024.
Because many of our clients fall within the Metal and Engineering Industries Bargaining Council (MEIBC), we thought to share some information on how this will work.
The two-pot system aims to provide financial relief to members in financial distress by allowing partial cash withdrawals from their Fund Credit while they are still employed.
Here’s what you need to know:
Key Changes:
1. Fund Credit Access:
Members can access up to 10% of their Fund Credit (as at 31 August 2024) in cash, capped at R30,000.
One-third of retirement contributions after 1 September 2024 may be withdrawn.
2. Withdrawal Conditions:
Minimum withdrawal amount is R2,000.
Withdrawals can only be made once per annum.
Withdrawn amounts are subject to tax and administrative fees.
3. Fund Structure:
Fund Credit will be split into three pots: Vested Pot, Savings Pot, and Retirement Pot, each with specific withdrawal rules.
4. Impact on Benefits:
Cash withdrawals will reduce future benefits on resignation or retirement.
Immediate payments may face delays due to administrative processing.
For a detailed understanding on the two-pot system for both pension and provident funds under MEIBC, please download the following documents (documents sourced from MIBFA):
For any further questions, feel free to contact us at marketing@chamlabour.co.za or request a call back. Stay informed and make the most of the new opportunities under the two-pot system.
Chamlabour Team
Please Note: This article is intended for informational purposes only. Chamlabour cannot assist with any claims or registrations related to the two-pot system for pension and provident funds. For help with claims or to register, please contact the relevant pension or provident fund administrator directly or contact your Employers’ HR department.
