Regulatory Alerts2018-03-31
PF Circular 3: Fidelity Guarantee Insurance for Privately Administered Pension Funds
The Registrar of Pension Funds requires privately administered pension funds to obtain fidelity guarantee insurance covering officer negligence and dishonesty. This circular announces a newly agreed standard policy available through Insurance Associations and urges funds without coverage to secure it immediately. The Office recommends calculating minimum coverage at five percent of total assets, while noting that R100,000 serves as a sufficient maximum limit.
FINANCIAL INSTITUTIONS OFFICE, Private Bag 238, PRETORIA. December, 1961. CIRCULAR NC. P. F. 3. ,. . . ,. ' .. ., ..,. .. ~ ' . ), L . .: .. TO ALL PRIVATELY ADMINIST2RRED PENSION FUNDS. . . FIDELITY GUARANTEE INSURANCE. It is notified for general information that this Office has reached agreement with the Insurance Associations in regard to a fidelity policy suitable for pensi'on funds. The policy which is available from all members of the Associations, provides cover against losses resulting from the negligence and dishonesty of pension fund 'officers. Those.-funds which have not as, yet -taken out' the necessary fidelitjr cover should do so at their earliest convenience. It is difficult to give an indication of the minimum cover to be taken out as the amount will vary from fund to fund depending upon the particularcircunistances of every furid. Whilst this Office cannot recommend, a rate in every, case,, it suggests as a basis for consideration, cover 'equal to at least 5% of a fund' s total assets at 'the time the cover is taken out or renewed. It is also considered t,hat a maximum cover of RlC0,OOO will be 'sufficient. %~.4.d:.<:.-- REGISTRAR OF PENSION FUNDS.