Regulatory Alerts2026-07-08
Added
Interpretation of Housing Loans and Guarantees under Section 19(5)(a) of the Pension Funds Act of 1956
The Registrar clarifies that housing loans and guarantees under Section 19(5)(a) of the Pension Funds Act of 1956 must be granted strictly for genuine housing needs and not to access retirement benefits prematurely. Loans are capped at 90% of market value unless secured by a pledge or employer guarantee, must carry interest no lower than the prescribed rate, and require repayment over at least 30 years in equal installments. The document prohibits using these loans to settle other debts, purchase holiday cottages, or fund non-housing purposes, and mandates that trustees prevent abuse to avoid fiduciary liability. Trustees are instructed to seek exemptions for irregularities only under exceptional circumstances and to ensure compliance with income tax obligations if loans are redeemed from member benefits.