The Minister of Finance issued the Default Regulations with effect from 1 September 2017. The Default Regulations prescribe conditions for default investment portfolios, default preservation and portability, and annuity strategies for funds.
All new default arrangements that came into operation on or after 1 September 2017 must comply with the requirements set out in the Default Regulations. Existing default arrangements must be fully aligned to the Default Regulations by 1 March 2019 and the Authority will examine funds’ compliance with the Default Regulations from 1 March 2019.
As a result of several enquiries on the application of the Default Regulations by retirement funds, the FSCA released a guidance notice last year.
As a reminder here is the download link.
Living annuity as part of funds preferred annuity strategy
Regulation 39(3)(a) of the Pension Funds Act provided that a living annuity may form part of a fund’s preferred annuity strategy, provided that the investment choice in respect of the living annuity is limited to a maximum of four investment portfolios, which portfolios must be compliant with regulations 28 and 37 and drawdown levels must be compliant with a prescribed standard.
Recently the FSCA granted an exemption to funds who intend including a living annuity option from the requirement to comply with regulation 39(3)(a), subject to the conditions as per the notice, until the final living annuities conduct standard, which will contain the prescribed drawdown levels, is published.
Click here to download “General Exemption from Regulation 39(3)(a)”.