Regulatory Alerts2018-03-31
PF Circular 99: Repatriation of Surplus to Participating Employers
The Registrar of Pension Funds at the South African Financial Services Board prohibits all self-administered funds and administrators from approving rule amendments that would allow the repatriation of pension fund surpluses to participating employers upon liquidation. Following legal advice from Senior Counsel, the Registrar confirms that pension fund assets are held exclusively for members and their dependants, meaning the current Act provides no discretion to register amendments that would transfer surplus assets to employers. This prohibition remains strictly in effect until Parliament amends the Pension Funds Act to explicitly permit surplus distribution or a court issues an authoritative ruling to the contrary, while legislative consultations to establish protective distribution conditions are currently underway.