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Pension Funds Act, 1956 (Act No 24 of 1956)

Regulations

Part VII : General

30. Rules and amendments thereof

 

(1) The rules of a pension fund shall, unless exempted partly or in full therefrom by the Registrar, comply with the following formal requirements:
(a) They shall be printed in at least 1,5 spacing on A4 paper of at least 80 grams;
(b) they shall be printed on one side of the paper only with a margin of at least 30 mm on the left side of the paper;
(c) headings and subheadings shall be printed in bold print;
(d) definitions shall be printed in capital letters and used in that way throughout the text;
(e) no underlining shall be allowed in the document; and
(f) the document shall at the front contain a detailed table of contents of the rules, with references to the relevant page numbers.

 

(2) The rules of a pension fund shall furthermore not be inconsistent with the Act and these regulations, and shall also, subject to subregulation (3), provide for the following matters:
(a) The full name of the pension fund, including a reference to any name changes that the pension fund might have undergone;
(b) the date of commencement of the pension fund and the dates of the first and subsequent financial year ends;

[Regulation 30(2)(b) substituted by Notice No. R. 1677 of 1996]

(c) the physical address of the registered office of the pension fund;
(d) the objects of the pension fund;
(e) a list or lists of definitions, in alphabetical order, defining the terms which are frequently used in the rules and which bear a special connotation;
(f) a detailed exposition of the eligibility conditions for joining the pension fund and the circumstances under which membership shall cease, with specific reference to the following:
(i) the class or classes of persons who are, or may in due course become, eligible to join the pension fund;
(ii) when membership shall be compulsory or not, as well as any period within which current employees may exercise a choice, if applicable;
(iii) the conditions of membership relating to deferred pensioners (if any); and
(iv) mutual transfer arrangements with any other pension fund (if any);
(g) the calculation and payment of contributions payable to the pension fund by and/or on behalf of members;
(h) the nature and extent of the benefits granted by the pension fund, as well as the payment thereof to any member or other person entitled thereto, in respect of—
(i) normal retirement, early retirement, ill-health retirement, death before retirement, resignation, dismissal, retrenchment and redundancy: Provided that retirement annuity funds or other pension funds not sponsored by an employer need not make provision for dismissal, redundancy, resignation and retrenchment; and
(ii) if applicable, late retirement, deferred benefits and death after retirement;
(i) the powers of investment of the pension fund;
(j) the appointment of a valuator and provisions regarding the triennial investigations if the pension fund is subject to the provisions of section 16 of the Act;
(k) the manner in which contracts and other documents binding the pension fund shall be executed;
(l) the manner of altering or rescinding any rules, and of making additional rules;
(m) the appointment of the auditor of the pension fund, if applicable;
(n) the manner in which any disputes between the pension fund and its members or between the pension fund and any other person whose claim is derived from a member shall be settled;
(o) the safe custody of title deeds or any other securities belonging to or held by the pension fund;
(p) subject to the provisions of the Act, the manner in which and the circumstances under which the pension fund shall be terminated or dissolved, with specific reference to—
(i) total and partial dissolution;
(ii) the appointment of a liquidator, to be approved by the Registrar;
(iii) any transfers of participating employers to, or amalgamation of the pension fund with, any other pension fund; and
(iv) the position of persons whose membership ceased during at least the 12-month period immediately prior to the date of liquidation;
(q) the transfer or amalgamation of the business of the pension fund, or any part thereof, with that of any other pension fund (or person);
(r) the manner in which unclaimed benefits shall be dealt with upon—
(i) the death of a member (including any deferred pensioner);
(ii) the liquidation of the pension fund; and
(iii) the withdrawal of a member from the pension fund;
(s) the opening of a bank account in the name of the pension fund, unless the fund is an underwritten fund.

[Regulation 30(2)(s) substituted by regulation 9 of Notice No. R. 491 of 2006]

(t) a specific indication of the participation in the pension fund so as to differentiate between pension funds established for the benefit of—
(i) employees of a principal employer and its subsidiaries;
(ii) employees of various employers that do not fall within the ambit of subparagraph (i) above; and
(iii) persons not referred to in either subparagraph (i) or (ii) above;
(u) the policy of insurance effected to indemnify the pension fund against losses owing to the dishonesty or fraud of any of its officials or such other indemnification as the Registrar may allow; and
(v) the appointment, remuneration (if applicable) and dismissal, as well as the powers, of a trustee or the trustees of the fund.
(w) where the assets of a pension fund consist exclusively or in part of fund member policies, the rules of that fund must provide clearly -
(i) whether or not the fund's liability to provide benefits to affected members or beneficiaries is funded exclusively or in part by fund member policies;
(ii) to the extent that benefits provided or to be provided by the fund to a member or beneficiary are funded by a fund member policy, that—
(aa) the fund's liability from time to time to the member or beneficiary in respect of those benefits is equal to the fund's corresponding claim from time to time as policyholder against the insurer for the policy benefits provided or to be provided by the insurer under the policy in accordance with the policy prescriptions;
(bb) the policy is administered by the insurer, and all values and benefits of the policy and charges in respect of it are determined, in accordance with the policy prescriptions;
(cc) any change in the policy benefits provided or to be provided under the policy on account of a causal event, as determined in accordance with the policy prescriptions, has the result that the fund's liability to the member or beneficiary changes accordingly;
(dd) the fund must notify the member or beneficiary of the change contemplated in paragraph (cc) in respect of causal events that occur after the coming into operation of this subregulation (w);
(iii) where applicable, that every member or beneficiary affected by (i) and (ii) selected or must select the fund member policy (including the investment and other features of the policy) which funds or is to fund the benefits provided or to be provided to the member or beneficiary, and where applicable that the member or beneficiary decided or must decide on any amendments or other transactions regarding the policy, in accordance with the policy prescriptions;
(iv) where applicable, where (i), (ii) and (iii) have application, that the fund or its board do not provide advice with regard to the selection of policies by members or beneficiaries (in particular regarding the investment and other related features of the policies), or with regard to amendments or other transactions regarding those policies;
(v) that the board of the fund must, to reasonably satisfy themselves that the fund member policies made available to members or beneficiaries for selection are suitable for the membership profile of the fund—
(aa) within one year of the date of the coming into operation of this subregulation, review the existing range of fund member policies available for selection by members or beneficiaries ; and
(bb) after this subregulation has come into operation—
(i) approve all new fund member policies made available for selection by members or beneficiaries, and
(ii) annually review the range of fund member policies that are made available to members or beneficiaries for selection

[Regulation 30(2)(w) inserted by regulation 2(a) of Notice No. R. 1217 of 2006]

 

(3) A pension fund that is a registered fund at the date of the coming into operation of these regulations shall amend its rules to comply with subregulations (1) and (2) within five years of that date, provided that a pension fund that is a registered fund at the date of the coming into operation of subregulation (2)(w) shall amend its rules to comply with that subregulation within one year of that date.

[Regulation 30(3) amended by regulation 2(b) of Notice No. R. 1217 of 2006]

 

(4) In subregulation (2)(w) and in this subregulation (4), unless the context indicates otherwise:
(a) the terms "actuarial basis", "benefit", "causal event", "charge", "fund member policy", "member", "policy" and "values" have the meaning assigned in Part 5 of the Regulations under the Long-term Insurance Act, 1998; and
(b) "policy prescriptions", in relation to a fund member policy, means the terms of the policy, the underlying actuarial basis of the policy, and the prescriptions of the Long-term Insurance Act, 1998 and the regulations issued under that Act

[Regulation 30(4) inserted by regulation 2(c) of Notice No. R. 1217 of 2006]

 

[Regulation 30 inserted by Notice No. R. 2324 of 1993]

 

 

 


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