Regulatory Alerts2026-07-08
Added
Permissible Deductions from Pension Benefits under Section 37D(b) of the Pension Funds Act
Registered pension fund organizations must ensure that any deduction from a member's pension benefit is expressly permitted by the Fund rules, as deductions made outside these rules are ultra vires and void. Deductions for housing loans or guarantees are only permissible if the Fund rules allow them, and deductions for compensation related to theft, dishonesty, fraud, or misconduct require either a written admission of liability by the member or a court judgment obtained by the employer. The practice of withholding benefits based on pending criminal charges or civil claims without a prior court judgment is prohibited. Funds must pay out benefits within the shortest possible timeframe and exercise discretion based on relevant factors rather than automatically acceding to employer requests.