Regulation 28, issued in terms of Section 36 of the Pension Funds Act of 1956, governs the asset spreading requirements of retirement funds regulated under that Act. Last reviewed in 1998, an amended regulation was approved by the Minister and gazetted in March of 2011. The new regulation takes into account a significantly changed financial sector and was amended to enhance member protection and provide for a more efficient and effective allocation of savings into the real economy. Regarding implementation, it provides for an effective date of 1 July 2011, subject to transitional arrangements which may be prescribed by the Registrar of Retirement Funds.
In considering the practical difficulties for funds to effect full compliance within the short period afforded, the Registrar considers it appropriate to allow for a 6 month transition period, from 1 July 2011 to 31 December 2011. The purpose of the transition period is the enable funds to adjust their monitoring and reporting systems, as well as investments, to ensure full compliance with regulation 28 by 31 December 2011. Therefore, during the transition period, investments held by funds must not become less compliant with any of the limits set out in the regulation as at the date of publication of this notice.
In addition, in considering also the practical challenges of ensuring a fund is at all times compliant with the regulation at both the fund and member levels, the Registrar is exempting a fund from the obligation to inform the Registrar without delay when an individual member exceeds any regulation limit. This exemption is subject to a fund informing the Registrar on a quarterly basis, for the quarters ending March, June, September and December of each year, of all instances where it exceeded these limits, with the first reporting quarter ending on 31 March 2012.
These provisions are effective immediately, and should facilitate a smoother transition for funds moving towards compliance with the new regulation.
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