The system is designed to improve South Africa's savings culture by dividing retirement savings into two categories: a retirement pot and a savings pot.

Here are the key points:

1. Two-thirds of all future contributions will go into a retirement pot: This portion cannot be accessed until retirement. Even if you resign from your job, you will be required to preserve this part. At retirement, you must use all of it to purchase an approved income product.

2. One-third of contributions will go into the savings pot: This portion can be accessed anytime, but only once a year. This is similar to the current system where you can withdraw one-third of your savings at retirement. Under the new law, you can access the same amount but at any time, including before retirement.

3. Tax implications: Withdrawals from the savings pot before retirement are taxed at the marginal rate. If left to accumulate until retirement, the entire amount can be withdrawn as a lump sum and taxed according to the retirement benefit tax table.

4. Existing retirement savers will have multiple pots: The existing rules will still apply to their accumulated retirement savings when the new legislation comes into effect. This includes rules about how much can be taken as a lump sum and whether a pre-retirement withdrawal is allowed.

5. Asset allocation considerations: The new system may require rethinking asset allocation strategies, as different pots with different rules could create complexity.

6. Educational programme: A massive educational programme is being rolled out to inform financial advisors and clients of the changes and what it means for their retirement savings.

The new legislation is expected to improve retirement outcomes by providing a way to access money for emergencies via the savings pot while ensuring long-term investment for retirement through the retirement pot.