Regulatory Alerts2018-03-31
Circular PF 66: Fund Financial Soundness Under Section 18 of the Pension Funds Act, 1956
The Registrar of Pension Funds mandates that self-administered pension funds and underwriting insurers maintain adequate financial soundness under Section 18 of the Pension Funds Act, 1956, by implementing structured funding protocols to avert underfunding. Funds achieving a 95% funding level after a prior 100% valuation, or those adopting special contribution schemes to restore 100% funding, qualify for automatic approval provided the managing person certifies rule compliance and ongoing adherence. The circular requires continuous actuarial consultation, timely interim valuations for unexpected events, and staged funding for retroactive benefit increases, effectively replacing the withdrawn Circular PF 58.
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