Regulatory Alerts2018-03-31
Information Circular 5 of 2016: Section 14 Pension Fund Transfers and Tax Directive Requirements
The Financial Services Board clarifies that voluntary individual transfers of retirement benefits between funds do not constitute a transfer of business under Section 14 of the Pension Funds Act, but remain subject to specific exemptions and exclusions outlined in Directive PF Number 6. Fund boards and administrators must independently obtain tax directives from the South African Revenue Service for these transfers under the Income Tax Act, regardless of Section 14 compliance. Failure to secure the required tax directives prior to processing transfers exposes funds to regulatory non-compliance and may financially prejudice the affected members.
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