Clientearth and just share npc commissioned fasken to provide a legal opinion the legal. Regulation 283i of the regulations to the pension funds act states that the aggregate exposure to foreign assets must not exceed the maximum allowable amount that a fund may invest in foreign assets as determined by the sarb, or such other amount as may. You may have seen that asset managers classify some of their multiasset unit trust funds as being regulation 28 compliant. Regulation 28 of the pensions fund act mybroadband forum. Fsca guidance note 7, pfa notice 2 and pfa guidance. This act shall apply to any institution or company that establishes or manages a pension scheme except the national pension scheme established under the national pension scheme act. Section 1 defines union to include the territory, which is.
Below is a summary of the above documents, highlighting the important points. Amendments to the regulations issued in terms of section 36 of the act. Esg and climate change for pension funds february 2019 3 welcome to our latest guide for pension trustees on environmental, social and corporate governance esg investment. Regulation 28 gives effect to section 361bb of the pension funds act which provides that the minister of finance may create regulations limiting the amount and the extent to which a pension fund may invest in particular assets or in particular kinds or categories of assets. National treasury published the draft default regulations draft regulation to the pension funds act pfa in july last year 2015. In the same year, regulation 28 of the pension funds act, 1956 pfa was published, requiring pension fund trustees to consider environmental, social and governance factors when making investment decisions. It also places limitations on the amount of the funds assets that can be exposed to foreign markets. Oecd survey on the investment regulation of pension funds. After lengthy consultation, the revised regulation 28 of the pensions fund act came into effect on 1 july 2011. Psg is regulation 28 limiting the growth of my retirement. Stuart noland nlnstu001 research dissertation presented for the approval of the university of cape town senate in fulfilment of part of the requirements for the degree of master of commerce specialising in finance in the field of. The change to the offshore investment allowance also immediately causes a change to regulation 28 of the pension funds act. Thereby, regulation 28 aims to protect the investor. Regulation 382c of the regulations to the pension funds act and guidance on the application of the default regulations.
In short, regulation 28 was implemented to minimise risk by forcing investors, to a degree, to diversify their ras. Financial system council of regulators this council facilitates cooperation. This is an important distinction for investors who are saving towards retirement and want to ensure that their investment is not overly risky. Rather than determining prudential investment limits, it now lays down general investment principles. Subfunds are not pension funds as defined in the pfa and do not have separate legal personality and the special rules are no more than different chapters of the rules of a fund. Any word or expression to which a meaning has been assigned in the act or regulation 28 has that meaning and, unless the context otherwise indicates. Amendment of regulation 28 of the regulations made under section 36 i, pravin j gordhan, minister of finance, in terms of section 361bb and c and section 40c of the pension funds act, 1956 act no. However, institutional investors typically include retirement funds. Jan 17, 2017 the final version of revised regulation 28 in a nutshell. Regulation 28 3i of the regulations to the pension funds act states that the aggregate exposure to foreign assets must not exceed the maximum allowable amount that a fund may invest in foreign assets as determined by the sarb, or such other amount as may be prescribed. Pension funds act and regulations 241956 data dynamics. Cape town if you are new to the world of investing, regulation 28 of the pension funds act imposes limitations on the extent to which a retirement fund can invest in particular asset classes such as equities, bonds, property and cash.
An event that had a big impact on saraf and most other retirement annuity funds was the amendment to regulation 28 of the pension funds act as from 1 july 2011. Regulation 28 overview regulation 28 to the pension funds act of 1956 provides for asset spreading requirements, i. In 2016, we launched our first practical guide for trustees on how esg could be incorporated into. Government gazette staatskoerant national treasury. The amendment to regulation 28 of the act prescribes the maximum exposure that retirement fund investments may have to various asset classes, for example. Of course, this caused a massive debate, because investors were now suddenly restricted to a maximum of 75% allocation in shares. On 23 february 2018 the minister of finance, pravin gordhan, announced changes to regulation 28 of the pension funds act. The final version of revised regulation 28 in a nutshell. Regulation 28 funds view the full list of our funds managed to be compliant with regulation 28 of the pension funds act. Jan, 2017 what exactly is the point of regulation 28.
I, dube phineas tshidi, registrar of pension funds, hereby, in terms of regulation. Explanatory memorandum to draft regulation 28 of the. To read more about the act on regulation 28, please click here. To this end and to assist you with aligning your clients retirement annuities, preservation funds we provide a. The draft regulations form part of the broader retirement and savings reforms initiated by national treasury in 2011. Pension funds act 24 of 1956 pension funds regulations 4 if the valuator referred to in subregulation 3aii has not been employed by the fund or if financial methods will be adopted by the fund which will render periodic investigations by a valuator unnecessary, the applicant must. Regulation 28 means regulation 28 of the regulations published in terms of the act and published under gnr. Apr 24, 2018 what a revised regulation 28 means for investors.
Includes the pension funds act pfa and the longterm insurance act ltia. The relationship between crisa and regulation 28 of pension. Ive just read allan grays newsletter regarding the amendment to regulation 28 of the pensions fund act. The government printing works will not be held responsible for the quality of hard copies or electronic files submitted for publication purposes. In 2016, we launched our first practical guide for trustees on how esg could be incorporated into pension scheme investment strategies.
Regulation 28 of the pension funds act old mutual investment group ww2zadocsdefaultsourceoldmutualsouthafricaomigomigaboutusresponsibleinvestmentsregulation28ofthepensionfundsact. Amendment of regulation 28 of the regulations of the pension. Regulation 28 compliant and noncompliant funds in south africa. Control act, who is authorised to administer a hedge fund. This means that investors may now allocate up to 40% of assets outside south africa in terms of regulation 28 of the pension funds act, which. Every registered fund shall not later than the 30th day of june of every year following the year in which the fund was registeredsubmit the following to the registrar of, pension funds, private bag 238, pretoria,under cover of. To provide for the registration, incorporation, regulation and dissolution of pension funds and for matters incidental thereto. To this end and to assist you with aligning your clients retirement annuities, preservation funds we provide a table below which sets out the.
The main purpose is to protect the members retirement provision from the effects of poorly diversified investment portfolios. Amount and type of assets in which saraf can invest the pension funds act limits the amount and type of assets in which a retirement fund can invest. Pension funds act 24 of 1956 pension funds regulations 4 if the valuator referred to in subregulation 3aii has not been employed by the fund or if financial methods will be adopted by the fund which will render periodic investigations by a valuator unnecessary, the applicant must provide information regarding the. Regulation 28 the change to the offshore investment allowance also immediately causes a change to regulation 28 of the pension funds act. Regulation 28 offshore limits to increase on the back of. Extensions section 279 of the fsr act see guidance note 5 of 2018 for lapsing of applications. Presentation on final reg 28 as gazetted 1,192kb final regulation 28 made under section 36 of the pension funds act, 1956 1,197kb explanatory memo to final regulation 28 771kb matrix of comments received on 2 december 2010 draft regulation 3,527kb. Pdf a comparison of retirement saving using discretionary. Jul 20, 2016 national treasury published the draft default regulations draft regulation to the pension funds act pfa in july last year 2015. These regulations may be cited as the pension and provident. A comparison of the returns of regulation 28 compliant and. What a revised regulation 28 means for investors moneyweb. Government gazette staatskoerant republic of south africa republiek van suidafrika regulation gazette no.
It limits the extent to which retirement funds may invest in particular assets or in particular asset classes. Background revised regulation 28 represents a radical shift from its predecessor. The revised regulation 28 of the pension funds act regulates how retirement funds should invest their assets. Regulation 28 of the pension funds act old mutual investment group. This study investigates whether the limitations imposed by regulation 28 of the pension funds act of south africa encourage optimal asset allocation and.
Regulation 28 gives effect to section 36 1 bb of the pension fund act, which limits the extent to which retirement funds like retirement annuities may be invested in particular kinds or categories of assets. Regulation 28 is issued under the pension fund act. Pension funds act 24 of 1956 sa sa gg 5679 brought into force in south africa and south west africa on 1 january 1958 by sa proc. The revised regulation 28 of the pension funds act regulates how retirement funds should invest their assets to ensure that their longterm commitments to members are met. Reconciling draft default regulation 37 and regulation 28. This study evaluates some of the constraints imposed on the regulation 28 through the use of markowitz 1952 efficient frontier framework and a nonparametric model. Discovery invest approached the financial services board for clarity on how this would work practically in light of the regulation 28 restrictions under the pension funds act, which currently stipulate that retirement funds may not invest more than 25% offshore. This means that investors may now allocate up to 40% of assets outside south africa in terms. It has introduced a host of new asset limits and investment principles, seemingly designed to protect fund members. Regulation 28 gives effect to section 361 bb of the pension fund act, which limits the extent to which retirement funds like retirement annuities may be invested in particular kinds or categories of assets. You can also view the intended maximum limit iml for all our funds. Pension and provident funds amendment regulations, 2017 no.
National pensions act,2008 an act to provide for pension reform in the country by the introduction of a contributory threetier pension scheme. The main purpose of regulation 28 is to protect the. Pension funds act 24 of 1956 namibia legal database. Section 1 defines union to include the territory, which is defined as the territory of south west africa. This sets the asset allocation limits for individual. Guidance note 7 of 2018 applications for amendments in terms of section 12 to ensure compliance.
I, dube phineas tshidi, registrar of pension funds, hereby, in terms of regulation 28 of the regulations made under the pension funds act, 1956 no. It provides guidance to trustees on how to formulate appropriate investment strategies to provide. This act may be cited as the pension scheme regulation act. Pension funds act 24 of 1956 legal assistance centre. Pension funds amendment act, 2001 pdf version act no. Fsca guidance note 7, pfa notice 2 and pfa guidance notice 8. Regulation 28 of the regulations made under section 36 of the pension funds act and published under government notice no. Pension fund act 24 of 1956 general regulations 12. The act itself is nothing new to investors and its been in operation in our pension funds since 1962.
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