Two new prudential standards will give the Financial Sector Conduct Authority more detailed information about retirement funds’ finances, investment holdings, and ESG practices.
Zareena Camroodien, divisional executive for retirement funds supervision at the FSCA, told the Institute of Retirement Funds Africa conference on 8 September 2026 that Prudential Standard 1 of 2026 would bring ESG and sustainability disclosures into a consolidated annual reporting framework. Prudential Standard 2 of 2026 would introduce fuller quarterly reporting on funds’ Regulation 28 investment positions.
Neither standard has an implementation date yet.
Consolidated annual reporting
Camroodien said Prudential Standard 1, published on 30 March 2026, introduced a consolidated framework for retirement funds’ regulatory and annual financial statement reporting.
The standard brings together audit and regulatory reporting requirements previously contained in different instruments, including Board Notice 14 of 2009 and Board Notice 77 of 2014.
It is intended to improve the consistency, transparency, and comparability of retirement fund financial reporting and align the requirements with updated sections of international financial reporting and accounting standards.
Camroodien said all retirement funds would be required to prepare audited financial statements, irrespective of their size.
The framework also provides for enhanced Regulation 28 and investment reporting, including annual reporting on infrastructure assets and ESG and sustainability matters.
Camroodien said the ESG and sustainability reporting would be aligned with FSCA Guidance Notice 1 of 2019, which deals with the sustainability of investments and assets in the context of a retirement fund’s Investment Policy Statement (IPS).
Camroodien also referred to the annual financial statement reporting template that would form part of the new framework.
ESG adoption remains uneven
Camroodien used the results of an FSCA survey to illustrate the extent to which retirement funds have incorporated environmental, social, and governance considerations into their investment policies and practices.
The survey, conducted between January and March this year, found that 82% of the funds surveyed had incorporated ESG considerations into their IPSs.
Fifty-eight percent indicated that they intended to monitor and evaluate ESG-related factors, while 47% aligned in some way with the Sustainable Development Goals (SDGs).
Forty-six percent had an active-ownership policy, while only 19% had adopted a policy specifically supporting green or climate-focused investments.
Funds that had not incorporated ESG considerations into their IPSs cited member investment choice, pending cancellation, or their size as reasons.
Camroodien said the findings challenge the assumption that smaller funds were necessarily unable to integrate ESG considerations meaningfully. She said a fund’s size did not necessarily prevent it from considering ESG factors and pointed to governance and awareness as other important factors.
The survey also found that some South African retirement funds remained substantially exposed to coal. Most funds had indicated a willingness to reduce their exposure. However, this transition is often contingent on asset managers implementing the necessary portfolio adjustments while ensuring that the financial interests of members remain protected. Camroodien said.
Funds remain responsible for mandates
Camroodien said many retirement funds relied extensively on external asset managers to implement their ESG policies.
Asset managers were often responsible for ESG integration, proxy voting, engagement with investee companies, climate-risk management, and alignment with the SDGs.
But delegating these activities did not transfer a fund’s ultimate responsibility.
Retirement funds remained the asset owners and were responsible for setting the mandates within which asset managers operated.
Camroodien said funds needed to improve their understanding of ESG issues and ensure their mandates clearly communicated their expectations to asset managers. She also encouraged funds to take a more active ownership role in promoting responsible investment and stewardship outcomes.
She referred to the FSCA’s support for the adoption of internationally recognised sustainability-disclosure standards.
The regulator regards IFRS S1 and IFRS S2, issued by the International Sustainability Standards Board, as the preferred global baseline for general sustainability-related and climate-related financial disclosures.
Camroodien said the FSCA was considering how the ISSB standards could be incorporated into South Africa’s broader sustainable-finance regulatory framework in collaboration with National Treasury and other regulators.
She also referred to a partnership established between the FSCA and the International Finance Corporation in 2025 to support the development of a South African sustainability-disclosure framework aligned with the ISSB standards.
Fuller quarterly investment reporting
Prudential Standard 2 of 2026, published on 1 July 2026, concerns quarterly reporting on compliance with Regulation 28, which limits the extent to which retirement funds may invest in particular assets and asset classes.
Camroodien said the Prudential Standard aims to combine the existing quarterly non-compliance or exception reporting with reporting on current holdings. It would replace the existing non-compliance Regulation 28 quarterly reports.
She said the additional information would enable the FSCA to move from a reactive approach towards more proactive, risk-based supervision. It would support more regular monitoring of funds’ investment holdings and Regulation 28 compliance.
Camroodien said certain funds in liquidation or termination, and funds that had completed section 14 transfers, would not have to submit the reports.
She said industry workshops on the proposed reporting template were held in July 2026. The template would be published for a second and final round of public consultation.
Infrastructure-asset reporting had been removed from the quarterly reporting framework and would instead form part of annual financial statement reporting under Prudential Standard 1, Camroodien said.
