South Africa’s Two-Pot retirement system, introduced in September 2024, has transformed how retirement savings can be accessed. By splitting contributions into two components, one preserved for retirement and another accessible under defined conditions, it offers members a balance between long-term security and short-term financial relief. The reform was designed to provide much-needed flexibility while safeguarding retirement outcomes, particularly for workers facing unexpected financial pressures.
Since its rollout, uptake has been significant. By early 2025, more than 2.6 million withdrawal applications had been processed, with over R43 billion paid out (SARS). Within the first year, total withdrawals reached approximately R57 billion across four million transactions (Liberty), highlighting both the financial pressure on households and the strong demand for accessible savings. Accessing these funds, however, is not always straightforward. Complaints to the Pension Funds Adjudicator rose by 13% after implementation, reflecting persistent administrative, compliance, and information alignment challenges (Office of the Pension Funds Adjudicator).
“The Two-Pot system has provided valuable short-term relief, but only if members are properly registered and compliant,” says Danie Hattingh, Principal Officer of the Building Industry Pension Scheme. “Digital access is not just about convenience; it is about strengthening the integrity of the system. When member information is accurate and systems are aligned, withdrawals are faster, more secure, and traceable. But it also places responsibility on all stakeholders to ensure their information is correct and up to date.”
To address these challenges, the Building Industry Bargaining Council (BIBC) has moved to a fully digital process for Two-Pot savings withdrawals. Paper forms and in-person submissions will no longer be accepted from members of the Building Industry Pension Scheme. Instead, applications will be submitted and verified through secure online platforms, with tax checks and payment processing handled electronically. This approach aims to reduce delays, improve accuracy, prevent fraud, and ensure that funds reach members efficiently. By automating verification steps and logging every action, the BIBC can now monitor applications more effectively and address potential issues before they escalate.
“While digital access offers speed and security, it also requires members to be proactive,” continues Hattingh. He shares that successful withdrawals depend on:
- Correct identity details matching official records, including South African ID or passport numbers (for non-citizens).
- Up-to-date contact information (mobile phone number and email address) for OTP verification and communication.
- Verified banking details for direct payment, matching the member’s identity.
- Registration and compliance with SARS, including submitted tax returns and settled liabilities.
Without these elements, even a fully digital system cannot function effectively. Members who overlook these requirements risk delays or blocked applications, which can be frustrating when short-term financial needs are urgent.
Employers remain a critical link in the process. Accurate submission of employee data including identity information, employment records, and contributions is essential. Late or incorrect contributions can directly affect withdrawal amounts and cause delays, potentially leading to disputes. For contractors and subcontractors in the building industry, maintaining accurate payroll and contribution records is both a legal and operational imperative. The BIBC continues to oversee employer compliance to safeguard members’ retirement security and to ensure the integrity of contributions across the sector.
The shift to online-only access has also exposed members to potential scams. Third-party ‘facilitators’ promising to help with withdrawals often request sensitive personal or banking information, putting members at risk. Hattingh cautions that, “the safest approach is to use only authorised platforms and official channels. Members should never share personal details with unverified sources. Even small errors can compromise security and delay access to funds.”
While the Two-Pot system provides flexibility, Hattingh cautions that early access should be used carefully. Drawing funds prematurely can reduce retirement balances and impact long-term financial security. Members are encouraged to weigh immediate financial pressures against future retirement needs, ensuring that short-term relief does not undermine long-term goals. Hattingh emphasises: “The system is designed to provide limited relief without undermining retirement security. Members need to use withdrawals thoughtfully, understanding both the benefits and the long-term implications.”
The transition to digital access marks a significant step in modernising retirement fund administration. Its success depends on accurate member data, employer compliance, informed members, and robust oversight. By improving efficiency, strengthening verification, and reducing errors, the BIBC is safeguarding both immediate access and long-term retirement outcomes. In this context, its role extends beyond administration. It ensures that members can access the relief intended for them while preserving the integrity of the retirement system across the local building industry.