Rob Southey, Head of Asset Consulting at Momentum Consultants & Actuaries,
reflects on how the Two-Pot System is driving the retailisation of South Africa’s
institutional retirement landscape.
Over the past year, the introduction of the Two-Pot Retirement System has sparked
one of the most meaningful shifts we’ve seen in the South African retirement
landscape. As someone deeply embedded in this space, I’ve observed not only how
the system itself has changed, but how it has fundamentally reshaped the way we
think about retirement, savings, and member engagement. The Two-Pot System has not only demystified retirement for many South Africans, but it has also accelerated the need for personalised, flexible solutions. What was once a static offering has transformed into a dynamic system with real-life relevance, offering choices that carry character, intention, and individual value. This shift demands a deeper level of engagement from all stakeholders. Trustees, in particular, are being called to step forward. No longer is it enough to administer benefits at arm’s length; trustees must now serve as guides, helping members navigate a complex, fast-changing market where one-size-fits-all no longer applies.
A nuanced, member-centric approach is essential. Every individual’s life stage,
financial reality, and personal goals must be taken into account when designing
benefit strategies and support tools.
Encouragingly, some retirement providers have embraced this transformation. We
now see product suites designed with flexibility at their core, offerings that grow and
adapt alongside employees as they progress through their careers. Comprehensive
benefit packages, aligned with the structure of the Two-Pot System, offer real-time
value and support during major life events such as illness, disability, or death. Yet this new flexibility also comes with responsibility. Members must take ownership of their decisions. While providers and employers can create accessible, inclusive tools, it is ultimately up to individuals to budget, plan, and engage with their options.
Over the past 18 months, the industry has invested heavily in education, from
brochures and videos to multilingual resources, ensuring that the basics are widely
available and understood. The Two-Pot System is not a bank account or a credit
facility, and it should not be treated as such. It is a carefully structured framework
designed to balance short-term needs with long-term security.
Behavioural patterns over the past year have shown a rising risk: repeat withdrawals
from the accessible pot. This trend threatens the very goal of retirement
preservation. However, with proper budgeting and financial planning, the pressure to
withdraw large sums annually can be reduced, allowing members to build more
stable, resilient retirement outcomes. In parallel, the retirement ecosystem itself is becoming more inclusive. In a country with 12 official languages, forward-thinking providers are translating products and educational content into multiple dialects, empowering individuals and families to understand and engage with offerings that may have previously felt out of reach.
This evolution, from compliance-driven administration to people-centred experience,
marks the retailisation of South Africa’s retirement industry. The system is no longer
static or rigid. It is personal, dynamic, and designed to meet people where they are.
The transformation is not only welcome but necessary. As the financial lives of South
Africans grow more complex, their benefit solutions must evolve with them.
Looking ahead, the retirement industry has a clear imperative: continue building on
this momentum, deepening the focus on individualised support, and ensuring that
retirement planning remains accessible, empowering, and fit for purpose. The Two-
Pot System may have been the catalyst, but the long-term success will lie in how
holistically and humanely the system continues to serve those it was built for.
