The two-pot system, to go ahead on 1 March 2024, is intended to marry the opposing concepts of access and preservation. On the one hand, it should ensure that members retire better, preserving their benefits until retirement (not taking their benefits in cash when they leave employment) and annuitising retirement benefits. On the other hand, Treasury recognises that members may need cash while they are still employed and members of the fund.

Treasury issued an updated version of the two-pot proposals on 9 June 2023 (the pots may also
technically be referred to as “components”). Draft amendments to the Pension Funds Act have also been released by Treasury.

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