Public servants tap R15 billion in retirement savings

National Treasury expects government to spend about R758 billion on employee compensation in 2026/27.

More than half a million government employees tapped into their retirement savings in just seven months, withdrawing about R15 billion under the two-pot system despite being among South Africa’s more securely employed workers.

The Government Pensions Administration Agency processed 564,547 two-pot retirement claims between September 2024 and March 2025, according to Statistics South Africa.

That works out to an average withdrawal of about R26,570 per claim, at a time when only about 6% of South Africans are estimated to be able to retire comfortably. Reports put overall two-pot withdrawals across the country at more than R60 billion.

South Africa employs roughly 1.3 million public servants, meaning the number of claims was equivalent to about 43% of the government workforce.

“The introduction of the system resulted in additional operational pressure, including staff training, increased call-centre activity, and a rise in walk-in-centre traffic,” said Statistics South Africa.

Under the two-pot retirement system, which took effect on September 1, 2024, members can generally make one withdrawal from their savings component in a tax year. The seven months covered by the Statistics South Africa figures fell within the first tax year of the system.

South African government staff receive standard public service benefits that include a government pension, medical aid subsidies, housing allowances, a 13th-cheque service bonus, and structured paid leave.

National Treasury expects government to spend about R758 billion on employee compensation in 2026/27. Spread across roughly 1.3 million employees, that works out to an average employment cost of about R583,000 per worker a year, or R48,600 a month.

PayScale, which collects salary data from employees, puts the average base salary – excluding benefits – in South Africa’s government sector at about R309,000 a year, equivalent to R25,750 a month.

That is close to the average R26,570 withdrawn through the two-pot system during the seven months covered by Stats SA.

Pay varies substantially depending on occupation. PayScale puts average annual base salaries at about R273,000 for educators, R261,000 for registered nurses and R202,000 for police or patrol officers.

Teachers and healthcare workers account for much of provincial government’s employee spending. Statistics South Africa said education accounted for 53.2% of provincial employee compensation in 2024/25 and health another 34.5%. Together, they accounted for almost 88% of the provincial wage bill.

Statistics South Africa said the two-pot system also boosted tax collections. Tax directives increased by R15.3 billion in 2024/25, with R12.6 billion of that increase related to two-pot withdrawals in the finance, community services and mining and quarrying industries.

The public-service figures show the extent to which workers took advantage of access to retirement savings almost immediately after the system was introduced.