Regulatory Alerts2018-03-31
PF Circular 89: Amendments to Regulations 28 and 30 of the Pension Funds Act
The South African Financial Services Board issued PF Circular 89 to notify administrators of amendments to Regulations 28 and 30 of the Pension Funds Act, 1956, which took effect upon publication in October 1996. The revised regulations mandate fair value accounting for investment comparisons, align unit trust investments with insurance policy asset distribution rules, and incorporate excluded policy values into deposit percentage calculations. Additionally, the amendments permit pension funds to allocate up to 10 percent of assets offshore with South African Reserve Bank approval, subject to fair value requirements and a newly published list of recognized exchanges.
FINANCIAL SERVICES BOARD
446 Rigel Avenue South Erasrnusrand Pretoria South Africa 0102 PO Box 35655 Menlo Park Pretoria Soufh Africa 0102 T~I(012) 428-8000 Fax (012) 347-0221 E-Mail fsb@solo.pipex.co.ra In1 +27-12-428-8000 In1 Fax +27-12-347-0221 Toll Free 08001 10443 Enquiries: A MARAIS D. Dialling No.: (012) 428-8065 IF- Our ref: 1211 211 Date: November 1996 CIRCULAR PF NO. 89 (To all self-administered funds or their administrators (where applicable) and the administering insurers of funds exempted in terms of section 2(3)(a) of the Act) PENSION FUNDS ACT, 1956 :AMENDMENT OF REGULATIONS 28 AND 30
- You are hereby informed that Government Notice No. R.1677 published in the Government Gazette No.17500 and the Regulation Gazette No.5764 of 18 October 1996 contain the amendments for Regulations 28 and 30 of the Regulations made under the Act. These amendments came into operation ' on the date of publication.
- The effect of the most important amendments are briefly elucidated hereunder :- (a) the lay-out of Annexure B to Schedule I was amended in order to compare the boqkvalues (Paragraphs A - B) with the fair values of the same investments (Paragraph D); (b) the South African Future Exchange, (with deposits limited to a maximum of 5%). was added to the deposit-taking institutions;
(c) paragraph 2(a)(i) of the Regulation allows for the investments in unit trust schemes which comply with the distribution requirements of assets in the Annexure, certified as prescribed in paragraph 2(c) of the Regulations, to be treated the same as investments in policies of insurance that similarly complies as indicated in paragraph 2(a)(ii)(aa) and (bb) of the Regulations; (d) the value of policies of insurance and unit trusts that are excluded for the purposes of calculating the percentage of investments in the various categories of assets, are included for the purpose of determining the percentage invested in deposits and balances in current and savings accounts with deposit-taking institutions in terms of paragraphs 2(a)(i) and (ii) of the Regulations; and (e) a fund may now invest up to a maximum of 10% of its assets offshore with the approval of the South African Reserve Bank. The Annexure indicates the categories or kinds of assets and the maximum percentage of investments allowed in these categories. Further issues in respect of offshore investments are - (i) fair value applies also to the investments outside the Republic; (ii) "recognised exchanges" referred to in paragraph 4(c) of the Regulations will be published by way of a notice in the Government Gazette from time to time. The first list has appeared in Government Gazette No.17545 of 8 November 1996 under General Notice 1575 of 1996;