Regulatory Alerts2018-03-31
Interpretation Note 1 of 2012: Pension Increase Policy
The Financial Services Board issued this note to clarify the legal obligations of pension fund boards under Section 14B(3) of the Pension Funds Act, 1956 regarding pension increase policies. Boards must establish, fund, and transparently communicate clear policies aimed at awarding pension increases, while ensuring actuarial valuations and funding parameters align with stated targets to avoid misleading members. Funds must justify any annual departures from their published policies due to financial strain or actuarial losses, as pensioners hold a reasonable expectation that adopted policies will be followed unless valid circumstances warrant otherwise.
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