Regulatory Alerts2018-03-31
Interpretation Note 2 of 2010: Fund Return and Processing Mismatches
The Financial Services Board issued this note to clarify how defined contribution pension funds must handle unavoidable processing mismatches and timing differences affecting fund returns under the Pension Funds Act. It permits fund boards to exclude former members from surplus or deficit adjustments when tracing them is cost-prohibitive, provided the aggregate mismatch remains below 2% of the fund’s year-end liabilities. Funds must ensure their rules authorize this discretionary allocation and document that excluding former members prevents unnecessary erosion of existing member benefits.
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