Government employees rushed to their retirement savings when South Africa’s two-pot system opened the door to early withdrawals.

More than 564,000 claims worth about R15-billion were processed in only seven months.

Statistics South Africa said the Government Pensions Administration Agency processed 564,547 claims between September 2024 and March 2025.

That works out to an average of about R26,570 for each claim.

The scale of the withdrawals stands out because South Africa has about 1.3-million public servants.

This means the number of claims was equal to roughly four claims for every 10 government employees.

However, the figures refer to claims and do not necessarily mean 564,547 different employees withdrew money.

The rush also put pressure on the agency responsible for processing government pensions.

“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,” Statistics South Africa said.

The two-pot retirement system started on 1 September 2024.

It changed how retirement savings work by allowing members to access money from the savings part of their retirement funds before retirement.

Members can generally make one withdrawal from this savings component during a tax year.

The seven months covered by the Statistics South Africa figures fell within the first tax year after the system was introduced.

Government workers were not alone in reaching for their retirement money.

Reports put total withdrawals under the two-pot system across South Africa at more than R60-billion.

The withdrawals come as only about six in every 100 South Africans are estimated to be financially prepared to retire comfortably.

Government employees receive benefits including pensions, medical aid subsidies, housing allowances, paid leave and service bonuses.

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

Spread across roughly 1.3-million workers, that amounts to an average employment cost of about R583,000 per employee each year, or about R48,600 a month.

That figure includes more than just take-home salaries.

PayScale estimates the average government employee’s base salary, excluding benefits, at about R309,000 a year.

That works out to about R25,750 a month.

The average two-pot claim of R26,570 was therefore slightly more than that estimated average monthly base salary.

But government salaries differ widely depending on the job.

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 take up a large part of provincial government employee spending.

Statistics South Africa said education accounted for R53.20 of every R100 spent on provincial employee compensation in 2024/25.

Health accounted for another R34.50 of every R100.

Together, the two sectors accounted for almost R88 of every R100 spent on provincial government employees.

The withdrawals also brought more money into the tax system.

Statistics South Africa said tax directives increased by R15.3-billion during 2024/25.

Of that increase, R12.6-billion was linked to two-pot withdrawals in the finance, community services and mining and quarrying industries.

The figures show how quickly workers made use of the new access to their retirement savings.

For government employees alone, more than half a million claims were processed in the first seven months.

And about R15-billion that had been sitting in retirement funds was pulled out.

Read more @scrolla.africa