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Retirement-regulations

How to apply the default regulations by retirement funds

PFA guidance notice no. 8 of 2018 – How to apply the default regulations by retirement funds

As a result of several enquiries on the application of the Default Regulations by retirement funds, the FSCA recently released a guidance notice.

Background

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.

Click here to download the Guidance Notice.

A recent Personal Finance article also reported on the matter. According to Katherine Barker, Head of FundsAtWork at Momentum Corporate, South African retirement fund members are overwhelmed by countless options. She welcomes the implementation of the new retirement fund default regulations set for 1 March 2019, when retirement funds will be required to ensure that members receive benefit counselling to provide information and assist them in making appropriate decisions to enhance their retirement outcomes.

“Retirement benefit counselling can be instrumental in delivering better outcomes”, says Barker.

Click here to read the Personal Finance article.

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