Parliament passes Retirement Funds Bill
Lerato Maleke | Tuesday August 5, 2014 13:50
The retirement funds to be regulated by the new law include annuities, preservation funds, beneficiary funds, and external funds, among others. The Bill also regulates administrators and boards of retirement funds.
When presenting the Bill, Minister of Finance and Development Planning Kenneth Matambo said several reforms have been initiated by government to streamline the regulation of the sector, which include the establishment of the Non-Bank Financial Institutions Regulatory Authority (NBFIRA). He explained that NBFIRA has over reaching regulatory responsibilities for several financial services including insurance, retirement funds, collective investment undertakings, securities and other related activities.
The Bill empowers NBFIRA to exercise better supervision over retirement funds in terms of risk-based oversight, investment of fund assets, transparency of funds to members, participation by members in the affairs of the funds and clear requirements for trustees and management of fund contributions. The objectives of the Bill include the provision of a framework which outlines the governance of administrators of funders and ensures that investments are approved and guarded by the NBFIRA in a modus that protects members’ interests.
The Bill also prescribes the requirements for licensing, issuance of licences and the amendment of the fund rules. There is also a special provision relating to multi-employer retirement fund, beneficiary fund and perservation fund.
Matambo revealed that the process of drafting the Bill involved extensive consultations with several stakeholders including pension fund members, asset managers, fund administrators and pension fund providers and trustees.