Assessing the awareness and understanding of low-income earners on the two-pot retirement system in South Africa

Governments manage retirement reforms and legislation related to inadequate retirement savings and low preservation of retirement benefits among working individuals. Pre-retirement withdrawals are a contributing factor to a lack of retirement security, and retirement fund members with insufficient retirement benefits become a liability to the government. The South African government implemented the two-pot retirement system to improve retirement savings adequacy and fund preservation, and to assist fund members with income for emergencies. This pension reform is in its infancy, and researchers are investigating its impact on retirement fund members of different income groups and employment. The study aims to establish awareness, understanding, and perception of lowincome earners on the legislated two-pot retirement system. Using a quantitative research survey methodology and a non-probability sampling approach (convenience), primary data were collected from low-income retirement fund members employed in the Gauteng province through a self-administered questionnaire. The research discovered widespread awareness of the two-pot retirement system, achieved mostly through the media, workplaces, and fund administrators. However, participants demonstrated limited knowledge of structure and regulations. Financial difficulties, such as debt payments and basic requirements, were the primary cause for early withdrawals, despite being aware of the two-pot system. The study concludes that while there is high awareness of the two-pot retirement system, there is limited understanding of its structure and regulations.