Pension Funds Act, 1956

Act 24 of 1956

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Act 24 of 1956
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Pension Funds Act, 1956

Act 24 of 1956

  1. [Amended by Finance Act, 1957 (Act 81 of 1957) on 9 July 1957]
  2. [Amended by Finance Act, 1959 (Act 80 of 1959) on 6 July 1959]
  3. [Amended by Inspection of Financial Institutions Act, 1962 (Act 68 of 1962) on 20 June 1962]
  4. [Amended by Second Finance Act, 1966 (Act 58 of 1966) on 28 October 1966]
  5. [Amended by Financial Institutions Amendment Act, 1968 (Act 65 of 1968) on 26 June 1968]
  6. [Amended by Financial Institutions Amendment Act, 1969 (Act 80 of 1969) on 25 June 1969]
  7. [Amended by Financial Institutions Amendment Act, 1970 (Act 23 of 1970) on 9 March 1970]
  8. [Amended by Financial Institutions Amendment Act, 1972 (Act 91 of 1972) on 28 June 1972]
  9. [Amended by Financial Institutions Amendment Act, 1976 (Act 101 of 1976) on 1 August 1976]
  10. [Amended by Financial Institutions Amendment Act, 1977 (Act 94 of 1977) on 1 July 1977]
  11. [Amended by Financial Institutions Amendment Act, 1978 (Act 80 of 1978) on 21 June 1978]
  12. [Amended by Financial Institutions Amendment Act, 1979 (Act 103 of 1979) on 13 July 1979]
  13. [Amended by Financial Institutions Amendment Act, 1980 (Act 99 of 1980) on 1 August 1980]
  14. [Amended by Financial Institutions Amendment Act, 1982 (Act 82 of 1982) on 9 June 1982]
  15. [Amended by Corporation for Public Deposits Act, 1984 (Act 46 of 1984) on 31 March 1984]
  16. [Amended by Financial Institutions Amendment Act, 1984 (Act 86 of 1984) on 1 May 1984]
  17. [Amended by Financial Institutions Amendment Act, 1984 (Act 86 of 1984) on 18 July 1984]
  18. [Amended by Financial Institutions Amendment Act, 1986 (Act 50 of 1986) on 28 May 1986]
  19. [Amended by Financial Institutions Amendment Act, 1988 (Act 51 of 1988) on 20 May 1988]
  20. [Amended by Financial Institutions Second Amendment Act, 1989 (Act 54 of 1989) on 30 June 1989]
  21. [Amended by Financial Institutions Amendment Act, 1989 (Act 53 of 1989) on 1 October 1989]
  22. [Amended by Legal Succession to the South African Transport Services Act, 1989 (Act 9 of 1989) on 6 October 1989]
  23. [Amended by Financial Institutions Amendment Act, 1990 (Act 64 of 1990) on 1 September 1990]
  24. [Amended by Financial Services Board Act, 1990 (Act 97 of 1990) on 1 April 1991]
  25. [Amended by Financial Institutions Second Amendment Act, 1991 (Act 119 of 1991) on 23 August 1991]
  26. [Amended by Financial Services Board Amendment Act, 1992 (Act 41 of 1992) on 1 May 1992]
  27. [Amended by Financial Institutions Amendment Act, 1993 (Act 7 of 1993) on 1 June 1993]
  28. [Amended by Financial Institutions Second Amendment Act, 1993 (Act 104 of 1993) on 1 July 1993]
  29. [Amended by Financial Institutions Amendment Act, 1992 (Act 83 of 1992) on 15 December 1993]
  30. [Amended by Financial Institutions Amendment Act, 1992 (Act 83 of 1992) on 1 April 1996]
  31. [Amended by Pension Funds Amendment Act, 1996 (Act 22 of 1996) on 19 April 1996]
  32. [Amended by Labour Relations Act, 1995 (Act 66 of 1995) on 11 November 1996]
  33. [Amended by Abolition of Restrictions on the Jurisdiction of Courts Act, 1996 (Act 88 of 1996) on 22 November 1996]
  34. [Amended by Judicial Matters Amendment Act, 1996 (Act 104 of 1996) on 14 February 1997]
  35. [Amended by Long-term Insurance Act, 1998 (Act 52 of 1998) on 1 January 1999]
  36. [Amended by Maintenance Act, 1998 (Act 99 of 1998) on 26 November 1999]
  37. [Amended by Pension Funds Amendment Act, 1997 (Act 94 of 1997) on 2 April 2001]
  38. [Amended by Pension Funds Second Amendment Act, 2001 (Act 39 of 2001) on 7 December 2001]
  39. [Amended by Pension Funds Amendment Act, 2001 (Act 65 of 2001) on 7 December 2001]
  40. [Amended by Financial Services Laws General Amendment Act, 2013 (Act 45 of 2013) on 7 December 2001]
  41. [Amended by Pension Funds Amendment Act, 2007 (Act 11 of 2007) on 13 September 2007]
  42. [Amended by Revenue Laws Amendment Act, 2007 (Act 35 of 2007) on 13 September 2007]
  43. [Amended by Revenue Laws Amendment Act, 2007 (Act 35 of 2007) on 1 July 2008]
  44. [Amended by Financial Services Laws General Amendment Act, 2008 (Act 22 of 2008) on 1 November 2008]
  45. [Amended by Revenue Laws Amendment Act, 2008 (Act 60 of 2008) on 1 November 2008]
  46. [Amended by Financial Services Laws General Amendment Act, 2013 (Act 45 of 2013) on 28 February 2014]
  47. [Amended by Financial Services Laws General Amendment Act, 2013 (Act 45 of 2013) on 30 May 2014]
  48. [Amended by Financial Services Laws General Amendment Act, 2013 (Act 45 of 2013) on 29 August 2014]
  49. [Amended by Financial Sector Regulation Act, 2017 (Act 9 of 2017) on 1 April 2018]
  50. [Amended by Financial Sector Regulation Act, 2017 (Act 9 of 2017) on 28 September 2018]
  51. [Amended by Financial Sector Regulation Act, 2017 (Act 9 of 2017) on 18 March 2019]
  52. [Amended by Financial Sector Regulation Act, 2017 (Act 9 of 2017) on 1 April 2023]
  53. [Amended by Financial Sector and Deposit Insurance Levies (Administration) and Deposit Insurance Premiums Act, 2022 (Act 12 of 2022) on 1 April 2023]
  54. [Amended by Pension Funds Amendment Act, 2024 (Act 31 of 2024) on 1 September 2024]
ACTTo provide for the registration, incorporation, regulation and dissolution of pension funds and for matters incidental thereto.
BE IT ENACTED by the Queen's Most Excellent Majesty, the Senate and the House of Assembly of the Union of South Africa, as follows:—

Chapter I
Administration and application of Act and interpretation of terms

1. Definitions

(1)In this Act, unless the context indicates otherwise—"actuarial surplus", in relation to a fund which is—(a)subject to actuarial valuation, means the difference between—(i)the value, calculated in accordance with the prescribed basis, if any, that the valuator has placed on the assets of the fund, less any credit balances in the member and employer surplus accounts; and(ii)the value that the valuator has placed on the liabilities of the fund in respect of pensionable service accrued by members prior to the valuation date plus the amounts standing to the credit of those contingency reserve accounts which are established or which the board deems prudent to establish on the advice of the valuator, calculated in accordance with the prescribed basis, if any;[paragraph (a) substituted by section 1(a) of Act 45 of 2013](b)valuation exempt, means the difference between—(i)the fair value of the assets of the fund less any credit balances in the member and employer surplus accounts; and(ii)the sum of the values of the amounts standing to the credit of all the accounts held for individual members, whether contributory or paid-up, plus the value of any other liabilities plus the amounts standing to the credit of any investment reserve account set up to facilitate the smoothing of fund return credited to member accounts and such contingency reserve accounts which are established or which the board deems prudent to establish:[paragraph (b) amended by section 1(b) of Act 45 of 2013]Provided that, for the purpose of quantifying the actuarial surplus in terms of section 15B, the surplus utilised improperly by the employer in terms of section 15B(6) shall be added to the difference calculated in paragraph (a) or (b), as the case may be;[definition of "actuarial surplus" inserted by section 1(a) of Act 39 of 2001 and substituted by section 1(a) of Act 11 of 2007]"actuary" means a natural person admitted as a fellow member of the Actuarial Society of South Africa or any other institution approved by the registrar by notice in the Gazette;[definition of "actuary" substituted by section 21(a) of Act No 104 of 1993, by section 1(a) of Act 22 of 2008 and by section 1(c) of Act 45 of 2013]"Adjudicator" means the Pension Funds Adjudicator or Deputy Pension Funds Adjudicator and any acting Pension Funds Adjudicator appointed under section 30C(1);[definition of "Adjudicator" inserted by section 1(a) of Act No 22 of 1996 and substituted by section 1(b) of Act 11 of 2007]"administrative penalty" [definition of "administrative penalty" inserted by section 1(c) of Act 11 of 2007 and deleted by section 1(b) of Act 22 of 2008]"administrator" means a person approved by the registrar in terms of section 13B(1);[definition of "administrator" inserted by section 1(c) of Act 11 of 2007]"advisory committee" [definition of "advisory committee" inserted by section 1(c) of Act 11 of 2007 and deleted by section 1(d) of Act 45 of 2013]"audit-exempt fund" means a fund which has been exempted by the registrar in terms of section 2(5) (a) from being required to be subject to audit;[definition of "audit-exempt fund" inserted by section 1(c) of Act 11 of 2007]"Authority" means the Financial Sector Conduct Authority estab­lished in terms of section 56 of the Financial Sector Regulation Act;[definition of "Authority" inserted by section 290 of Act 9 of 2017]"beneficiary" means a nominee of a member or a dependant who is entitled to a benefit, as provided for in the rules of the relevant fund;[definition of "beneficiary" inserted by section 1(c) of Act 11 of 2007]"beneficiary fund" means a fund referred to in paragraph (c) or (d) of the definition of "pension funds organisation";[definition of "beneficiary fund" inserted by section 1(c) of Act 22 of 2008 and substituted by section 1(a) of Act 31 of 2024]"benefit", in relation to a fund, means any amount payable to a member or beneficiary in terms of the rules of that fund;[definition of "benefit" inserted by section 1(c) of Act 11 of 2007]"board" means the board of a fund contemplated in section 7A of this Act;[definition of "board" inserted by section 1(a) of Act No 22 of 1996]"board member" means any member of a board;[definition of "board member" inserted by section 1(d) of Act 11 of 2007]"commencement date" means the date of commencement of the Pension Funds Second Amendment Act, 2001;[definition of "commencement date" inserted by section 1(b) of Act 39 of 2001]"Companies Act" means the Companies Act, 2008 (Act No. 71 of 2008);[definition of "Companies Act" inserted by section 1(e) of Act 45 of 2013]"complainant" means—(a)any person who is, or who claims to be—(i)a member or former member of a fund;(ii)a beneficiary or former beneficiary of a fund;(iii)an employer who participates in a fund;(iv)a spouse or a former spouse of a member or former member, of a fund;(b)any group of persons referred to in paragraph (a)(i), (ii), (iii) or (iv);(c)a board of a fund or member thereof; or(d)any person who has an interest in a complaint;[definition of "complainant" inserted by section 1(a) of Act No 22 of 1996 and substituted by section 1(f) of Act 45 of 2013]"complaint" means a complaint of a complainant relating to the administration of a fund, the investment of its funds or the interpretation and application of its rules, and alleging—(a)that a decision of the fund or any person purportedly taken in terms of the rules was in excess of the powers of that fund or person, or an improper exercise of its powers;(b)that the complainant has sustained or may sustain prejudice in consequence of the maladministration of the fund by the fund or any person, whether by act or omission;(c)that a dispute of fact or law has arisen in relation to a fund between the fund or any person and the complainant; or(d)that an employer who participates in a fund has not fulfilled its duties in terms of the rules of the fund;but shall not include a complaint which does not relate to a specific complainant;[definition of "complaint" inserted by section 1(a) of Act No 22 of 1996]"conduct standard" has the same meaning ascribed to it in terms of section 1(1) of the Financial Sector Regulation Act;[definition of "conduct standard" inserted by section 290 of Act 9 of 2017]"contingency reserve account", in relation to a fund, means an account provided for in the rules of the fund, which has been amended in accordance with the requirements of the registrar, or which has not been disallowed by the registrar, and to which shall be credited or debited such amounts as the board shall determine, on the advice of the valuator where the fund is not valuations exempt, in order to provide for a specific category of contingency;[definition of "contingency reserve account" inserted by section 1(c) of Act 39 of 2001, substituted by section 1(e) of Act 11 of 2007 and by section 1(g) of Act 45 of 2013]"contribution holiday", in relation to a—(a)defined benefit category of a fund, means payment by the employer of less than the contribution rate the valuator recommends be payable by the employer, taking into account the circumstances of the fund and ignoring any surplus or deficit; or[paragraph (a) substituted by section 1(f) of Act 11 of 2007](b)defined contribution category of a fund, means payment by the employer of less than the employer contribution rate defined in the rules prior to application of any credit balance in any employer reserve account as defined in the rules or employer surplus account;[definition of "contribution holiday" inserted by section 1(c) of Act 39 of 2001]"conversion", in relation to a category of a fund, means the change of the basis of the retirement benefit from defined benefit to defined contribution, or vice versa;[definition of "conversion" inserted by section 1(c) of Act 39 of 2001]"court" means a court of the provincial or local division of the High Court of South Africa;[definition of "court" substituted by section 14(b) of Act No 83 of 1992 and by section 1(g) of Act 11 of 2007]"deferred pensioner" means a member who has not yet retired but has left the service of the employer concerned prior to normal retirement date, as defined in the rules, leaving in the fund the member’s rights to such benefits as may be defined in the rules;[definition of "deferred pensioner" inserted by section 1(d) of Act 39 of 2001]"defined benefit category of a fund" means a category of a fund other than a defined contribution category of a fund;[definition of "defined benefit category of a fund" inserted by section 1(d) of Act 39 of 2001]"defined contribution category of a fund" means a category of members whose interest in the fund has a value at least equal to—(a)the contributions paid by the member and by the employer in terms of the rules of the fund that determine the rates of both their contributions at a fixed rate;(b)less such reasonable expenses as the board determines;(c)plus any amount credited to the member's individual account upon the commencement of the member's membership of the fund or upon the conversion of the category of the fund to which the member belongs from a defined benefit category to a defined contribution category of a fund or upon the amalgamation of his or her fund with any other fund, if any, other than amounts taken into account in terms of subparagraph (d);(d)plus any other amounts lawfully permitted, credited to or debited from the member's individual account, if any,as increased or decreased with fund return: Provided that the board may elect to smooth the fund return;[definition of "defined contribution category of a fund" inserted by section 1(d) of Act 39 of 2001, substituted by section 1(h) of Act 11 of 2007 and by section 1(h) of Act 45 of 2013]"dependant", in relation to a member, means—(a)a person in respect of whom the member is legally liable for maintenance;(b)a person in respect of whom the member is not legally liable for maintenance, if such person—(i)was, in the opinion of the board, upon the death of the member in fact dependent on the member for maintenance;(ii)is the spouse of the member;(iii)is a child of the member, including a posthumous child, an adopted child and a child born out of wedlock;(c)a person in respect of whom the member would have become legally liable for maintenance, had the member not died;[definition of "dependant" inserted by section 21(a) of Act No 101 of 1976, substituted by section 10 of Act No. 80 of 1978, amended by section 38 of Act No. 99 of 1980, substituted by section 3 of Act 51 of 1988 and by section 20 of Act 54 of 1989, amended by sections 1(b) and 6 of Act No 22 of 1996 and substituted by section 1(i) of Act 11 of 2007]"disclosure", in addition to the meaning ascribed to "disclosure" in section 1 of the Protected Disclosures Act, includes the disclosure of information—(a)regarding any conduct of a pension fund, an administrator or a board member, principal officer, deputy principal officer, valuator, officer or employee of a pension fund or administrator, made by a board member, principal officer, deputy principal officer or valuator, or other officer or employee, of a pension fund or administrator; and(b)relating to the affairs of the pension fund which may prejudice the fund or its members;[definition of "disclosure" inserted by section 1(i) of Act 45 of 2013]"Divorce Act" means the Divorce Act, 1979 (Act No. 70 of 1979);[definition of "Divorce Act" inserted by section 1(b) of Act 31 of 2024]"employer", in relation to a fund, means an employer participating in the fund;[definition of "employer" inserted by section 1(e) of Act 39 of 2001]"employer surplus account", in relation to a fund, means an account provided for in the rules of the fund to which shall be credited—(a)amounts allocated by the board in terms of sections 15B, 15C and 15F or transferred into the fund for the credit of the account in terms of section 15E(1)(e);(b)such contributions as are specified in the rules to be credited to this account; and(c)fund return on the balance in the account from time to time: Provided that the board may elect to smooth the fund return,and to which shall be debited—(d)any actuarial surplus utilised by the employer; and(e)any actuarial surplus transferred to any other account in the fund at the request of the employer or transferred to another fund in terms of section 15E(1)(e);[definition of "employer surplus account" inserted by section 1(e) of Act 39 of 2001, substituted by section 1(j) of Act 11 of 2007 and amended by section 1(j) of Act 45 of 2013]"fair value", in relation to an asset of a fund, means the fair value of that asset determined in accordance with South African Statements of Generally Accepted Accounting Practice;[definition of "fair value" inserted by section 1 of Act 65 of 2001]"Financial Sector Regulation Act" means the Financial Sector Regulation Act, 2017;[definition of "Financial Sector Regulation Act" inserted by section 290 of Act 9 of 2017]"Financial Services Board" [definition of "Financial Services Board" inserted by section 1(k) of Act 45 of 2013 and deleted by section 290 of Act 9 of 2017]"financial year", in relation to a fund, means—(a)each period of twelve months, at the end of which the balance of accounts is required to be struck in terms of its rules; or(b)such other period as may on any particular occasion be determined by the registrar at the written request of the fund, on such conditions as the registrar may impose; or(c)in the case of a fund which is registered at the commencement of the Financial Institutions Amendment Act, 1977, and which notifies the registrar in writing before 1 January 1979 that it intends changing the date on which its financial year ends from 31 December to another date, the period exceeding from its last financial year, which ends on 31 December, to such other date, provided such period does not exceed eighteen months.[definition of "financial year" substituted by section 9 of Act 94 of 1977]"fund" means a pension fund organisation, and "pension fund" or "registered fund" has the same meaning;[definition of "fund" substituted by section 1(k) of Act 11 of 2007]"fund return", in relation to—(a)the assets of a fund, means any income (received or accrued) and capital gains and losses (realised or unrealised) earned on the assets of the fund, net of expenses and tax charges, associated with the acquisition, holding or disposal of assets; or(b)any portion of the assets of a fund if the assets are separately identifiable, means any income (received or accrued) and capital gains and losses (realised or unrealised) earned on those assets, net of expenses and tax charges associated with the acquisition, holding or disposal of assets; or(c)the assets of a fund, to the extent that those assets consist of long-term policies which are "fund member policies" as defined in Part 5 of the Regulations under the Long-term Insurance Act, 1998 (Act No. 52 of 1998), means the "growth rate" (as defined in those Regulations) applicable to those policies, as determined in accordance with those Regulations,which in any such case may be positive, negative or nil: Provided that the board may use a reasonable approximation, made in such manner as may be prescribed, to allocate a fund return if there are sound administrative reasons why an exact allocation cannot be effected;[definition of "fund return" inserted by section 1(l) of Act No 11 of 2007 and amended by section 1(l) of Act 45 of 2013]"Gazette" [definition of "Gazette" deleted by section 14(a) of Act No 83 of 1992]"Income Tax Act" means the Income Tax Act, 1962 (Act No. 58 of 1962);[definition of "Income Tax Act" inserted by section 1(c) of Act 31 of 2024]"investment reserve account", in relation to a fund which has a defined contribution category, means an account of which the balance is determined as follows: the excess of the value of the assets held in respect of the members’ individual accounts and for any smoothing of fund return to be credited to such accounts, with allowances for expenses over the value of the balances in the members’ individual accounts;[definition of "investment reserve account" inserted by section 1(f) of Act No 39 of 2001 and substituted by section 1(m) of Act 45 of 2013]"joint standard" has the same meaning ascribed to it in terms of section 1(1) of the Financial Sector Regulation Act;[definition of "joint standard" inserted by section 290 of Act 9 of 2017]"member", in relation to—(a)a fund referred to in paragraph (a) or (c) of the definition of "pension fund organization", means any member or former member of the association by which such fund has been established;(b)a fund referred to in paragraph (b) of that definition, means a person who belongs or belonged to a class of persons for whose benefit that fund has been established,but does not include any person who has received all the benefits which may be due to that person from the fund and whose membership has thereafter been terminated in accordance with the rules of the fund;[definition of "member" substituted by section 21(b) of Act 101 of 1976 and by section 1(n) of Act 45 of 2013]"member’s individual account", in relation to an individual member of a defined contribution category of a fund, means the amount determined in terms of section 14B(1);[definition of "member’s individual account" inserted by section 1(g) of Act 39 of 2001]"member’s interest in the retirement component" has the meaning as defined in section 1(1) of the Income Tax Act;[definition of "member’s interest in the retirement component" inserted by section 1(d) of Act 31 of 2024]"member’s interest in the savings component" has the meaning as defined in section 1(1) of the Income Tax Act;[definition of "member’s interest in the savings component" inserted by section 1(d) of Act 31 of 2024]"member’s interest in the vested component" has the meaning as defined in section 1(1) of the Income Tax Act;[definition of "member’s interest in the vested component" inserted by section 1(d) of Act 31 of 2024]"member surplus account", in relation to a fund, means an account provided for in the rules of the fund to which shall be—(a)crediled—(i)amounts allocated by the board in terms of sections 15B and 15C to be used for the benefit of members;(ii)fund return on the balance in the account from time to time: Provided that the board may elect to smooth the fund return; and(iii)amounts reallocated from the employer surplus account to the account in terms of section 15E; and(b)debited—(i)the cost of any benefit improvements funded from the account; and(ii)any expenses which would otherwise reduce benefits payable to members;[definition of "member surplus account" inserted by section 1(g) of Act 39 of 2001, substituted by section 1(m) of Act 11 of 2007 and amended by section 1(o) of Act 45 of 2013]"minimum individual reserve"—(a)in relation to a member of a defined benefit category of a fund, means the amount determined in terms of section 14B(2)(a)(b)in relation to a member of a defined contribution category of a fund, means the amount determined in terms of section 14B(2)(b); and(c)in relation to a pensioner or a deferred pensioner, means the amount determined in terms of section 14B(6);[definition of "minimum individual reserve" inserted by section 1(g) of Act 39 of 2001 and substituted by section 1(n) of Act 11 of 2007]"minimum pension increase" means the amount determined in terms of section 14B(4);[definition of "minimum pension increase" inserted by section 1(g) of Act 39 of 2001]"Minister" means the Minister of Finance;"non-member spouse", in relation to a member of a fund, means a person who is no longer the spouse of that member due to the dissolution or confirmation of the dissolution of the relationship by court order and to whom the court ordering or confirming the dissolution of the relationship has granted a share of the member's pension interest in the fund;[definition of "non-member spouse" inserted by section 1(o) of Act 11 of 2007]"normal retirement age" has the meaning assigned to it in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962);[definition of "normal retirement age" inserted by section 1(d) of Act 22 of 2008]"officer", in relation to a fund, means any member of a board, any manager, principal officer, treasurer, clerk or employee of the fund, but does not include an auditor appointed under section 9 or a valuator appointed under section 9A;[definition of "officer" substituted by section 1(c) of Act No 22 of 1996]"official web site" means a web site as defined in section 1 of the Electronic Communications and Transactions Act, 2002 (Act No. 25 of 2002), set up by the Financial Services Board;[definition of "official web site" inserted by section 1(p) of Act 45 of 2013]"pensioner", in relation to a fund, means a person who is in receipt of a pension paid from the fund;[definition of "pensioner" inserted by section 1(h) of Act 39 of 2001]"pension fund organisation" means—(a)any association of persons established with the object of providing annuities, including living annuities, or lump sum payments for members or former members of such association upon their reaching retirement dates, or for the dependants of such members or former members upon the death of such members; or(b)any business carried on under a scheme or arrangement established with the object of providing annuities, including living annuities, or lump sum payments for persons who belong or belonged to the class of persons for whose benefit that scheme or arrangement has been established, when they reach their retirement dates or for dependants of such persons upon the death of those persons; or(c)any association of persons or business carried on under a scheme or arrangement established with the object of receiving, administering, investing and paying benefits that became payable in terms of the employment of a member on behalf of beneficiaries, payable on the death of more than one member of one or more pension funds; or(d)any association of persons or business carried on under a scheme or arrangement established with the object of making payments in respect of arrear and future maintenance orders payable in terms of a court order issued against a fund on behalf of beneficiaries,and includes any such association or business which in addition to carrying on business in connection with any of the objects specified in paragraph (a), (b), (c) or (d) also carries on business in connection with any of the objects for which a friendly society may be established, as specified in section 2 of the Friendly Societies Act, 1956, or which is or may become liable for the payment of any benefits provided for in its rules, whether or not it continues to admit, or collect contributions from or on behalf, of members;[definition of "pension fund organisation" substituted by section 21(c) of Act No 101 of 1976, by section 1(e) of Act 22 of 2008, amended by section 1(q) of Act 45 of 2013 and substituted by section 1(e) of Act 31 of 2024]"pension interest", in relation to a court order granted under section 7(8)(a) of the Divorce Act, or a court order granted in respect of the division of assets of a marriage according to the tenets of a religion, means, in relation to a party who is a member of a fund, that member’s individual account or minimum individual reserve, as the case may be, determined in terms of the rules of that fund, on the date of the court order;[definition of "pension interest" inserted by section 1(f) of Act 31 of 2024]"pension preservation fund" means a fund that is a—(a)pension preservation fund as defined in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962); or(b)pension fund as defined in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962), doing the business of a pension preservation fund as prescribed by the Commissioner in terms of that Act;[definition of "pension preservation fund" inserted by section 1(r) of Act 45 of 2013]"person" [definition of "person" deleted by section 1(d) of Act No 22 of 1996]"Policy Board" [definition of "Policy Board" inserted by section 1(e) of Act No 22 of 1996 and deleted by section 1(p) of Act 11 of 2007]"prescribed" [definition of "prescribed" substituted by section 1(q) of Act No 11 of 2007, by section 1(s) of Act 45 of 2013 and deleted by section 290 of Act 9 of 2017]"prescribed by regulation" means prescribed by the Minister by regulation;[definition of "prescribed by regulation" inserted by section 1(r) of Act 11 of 2007]"principal employer", in relation to a fund, means the employer defined as the principal employer in the rule;[definition of "principal employer" inserted by section 1(i) of Act 39 of 2001]"principal officer" means the officer referred to in section eight;"protected disclosure", in addition to the meaning ascribed to "protected disclosure" in section 1 of the Protected Disclosures Act, includes disclosure of information to the registrar in terms of section 9B;[definition of "protected disclosure" inserted by section 1(t) of Act 45 of 2013]"Protected Disclosures Act" means the Protected Disclosures Act, 2000 (Act No. 26 of 2000);[definition of "Protected Disclosures Act" inserted by section 1(t) of Act 45 of 2013]"provident preservation fund" means a fund that is a—(a)provident preservation fund as defined in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962); or(b)provident fund as defined in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962), doing the business of a provident preservation fund as prescribed by the Commissioner in terms of that Act;[definition of "provident preservation fund" inserted by section 1(t) of Act 45 of 2013]"prudential standard" has the same meaning ascribed to it in terms of section 1(1) of the Financial Sector Regulation Act;[definition of "prudential standard" inserted by section 290 of Act 9 of 2017]"publish" means any direct or indirect communication transmitted by any medium, or any representation or reference written, inscribed, recorded, encoded upon or embedded within any medium, by means of which a person, other than the registrar, seeks to bring any information to the attention of a person, or all or part of the public;[definition of "publish" inserted by section 1(t) of Act 45 of 2013]"Register" means the Financial Sector Information Register referred to in section 256 of the Financial Sector Regulation Act;[definition of "Register" inserted by section 290 of Act 9 of 2017]"registered", in relation to a fund, means registered or provisionally registered under section four, and "registration" has a corresponding meaning;"registered office" means the registered office referred to in section seven;"registrar" [definition of "registrar" substituted by section 21(d) of Act No 101 of 1976, by section 29 of Act 97 of 1990, by section 1(u) of Act 45 of 2013 and deleted by section 290 of Act 9 of 2017]"regulation" means a regulation made and in force under this Act;"reserve account", in relation to a fund, means a contingency or investment reserve account, as the case may be;[definition of "reserve account" inserted by section 1(j) of Act 39 of 2001]"retirement" means the period commencing on the member's retirement date;[definition of "retirement" inserted by section 1(f) of Act 22 of 2008]"retirement annuity fund" means a retirement annuity fund as defined in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962);[definition of "retirement annuity fund" inserted by section 1(s) of Act 11 of 2007]"retirement component" has the meaning as defined in section 1(1) of the Income Tax Act subject to the applicable provisos to paragraph 6B of the Second Schedule to the Income Tax Act;[definition of "retirement component" inserted by section 1(g) of Act 31 of 2024]"retrenchment", in relation to a member, means dismissal from employment based on the operational requirements of the relevant employer;[definition of "retrenchment" inserted by section 1(j) of Act 39 of 2001]"retirement date" has the meaning assigned to it in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962);[definition of "retirement date" inserted by section 21(e) of Act No 101 of 1976 and substituted by section 1(g) of Act 22 of 2008]"rules" means the rules of a fund registered in terms of this Act;[definition of "rules" substituted by section 1(t) of Act No 11 of 2007 and by section 1(v) of Act 45 of 2013]"savings component" has the meaning as defined in section 1(1) of the Income Tax Act, subject to the applicable provisos to paragraph 6B of the Second Schedule to Income Tax Act;[definition of "savings component" inserted by section 1(h) of Act 31 of 2024]"savings withdrawal benefit" has the meaning as defined in section 1(1) of the Income Tax Act;[definition of "savings withdrawal benefit" inserted by section 1(h) of Act 31 of 2024]"spouse" means a person who is the permanent life partner or spouse or civil union partner of a member in accordance with the Marriage Act, 1961 (Act No. 68 of 1961), the Recognition of Customary Marriages Act, 1998 (Act No. 68 of 1997), or the Civil Union Act, 2006 (Act No. 17 of 2006), or the tenets of a religion;[definition of "spouse" inserted by section 1(u) of Act 11 of 2007]"stakeholder", in respect of a fund, means a current member, including a pensioner and a deferred pensioner, a former member and an employer participating in the fund;[definition of "stakeholder" inserted by section 1(k) of Act 39 of 2001]"statutory actuarial valuation", in relation to a fund, means an investigation by a valuator contemplated in section 16;[definition of "statutory actuarial valuation" inserted by section 1(k) of Act 39 of 2001]"surplus apportionment date" in relation to a fund, means the first statutory actuarial valuation date following the commencement date;[definition of "surplus apportionment date" inserted by section 1(k) of Act 39 of 2001 and substituted by section 1(v) of Act 11 of 2007]"Territory" [definition of "Territory" deleted by section 14(a) of Act No 83 of 1992]"this Act" includes any matter prescribed by the registrar by notice in the Gazette and any regulation;[definition of "this Act" inserted by section 21(b) of Act No 104 of 1993 and substituted by section 1(w) of Act 45 of 2013]"Tribunal" means the Financial Services Tribunal established in terms of section 219 of the Financial Sector Regulation Act;[definition of "Tribunal" inserted by section 290 of Act 9 of 2017]"unclaimed benefit" means—(a)any benefit, other than a benefit referred to in paragraphs (aA), (b), (c) and (d), not paid by a fund to a member, former member or beneficiary within 24 months of the date on which it in terms of the rules of the fund, became legally due and payable;(aA)a death benefit payable to a beneficiary under section 37C not paid within 24 months from the date on which the fund became aware of the death of the member, or such longer period as may be reasonably justified by the board of the fund in writing;(b)in relation to a benefit payable as a pension or annuity, any benefit which has not been paid by a fund to a member, former member or beneficiary within 24 months of—(i)the expiry date of any guarantee period for pension payments provided for in the rules of the fund; or(ii)the date on which any pension payment or annuity legally due and payable in terms of the rules of the fund became unpaid;(c)in relation to a benefit payable to a former member who cannot be traced in accordance with section 15B(5)(e), any benefit that has become legally due and payable to a former member in terms of a surplus apportionment scheme approved in terms of this Act not paid to that former member within 24 months of the date on which it became legally due and payable;(d)any benefit that remained unclaimed or unpaid to a member, former member or beneficiary when a fund applies for cancellation of registration in terms of section 27 or where the liquidator is satisfied that benefits remain unclaimed or unpaid; or(e)any amount that remained unclaimed or unpaid to a non-member spouse within 24 months from the date of the deduction contemplated in section 37D(4)(a)(ii), but does not include a benefit due to be transferred as part of a transfer of business in terms of section 14, where an annuity is purchased in respect of a pensioner or otherwise in terms of this Act;[definition of "unclaimed benefit" inserted by section 1(h) of Act 22 of 2008 and substituted by section 1(x) of Act 45 of 2013]"unclaimed benefit fund" means a fund that is established for the receipt of unclaimed benefits contemplated in the definitions of a pension preservation fund and a provident preservation fund in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962);[definition of "unclaimed benefit fund" inserted by section 1(y) of Act 45 of 2013]"Union" [definition of "Union" deleted by section 14(a) of Act No 83 of 1992]"valuation exempt", in relation to a fund, means a fund which has been exempted by the registrar under section 2(5)(a) from sections 9A and 16;[definition of "valuation exempt" inserted by section 1(w) of Act No 11 of 2007 and substituted by section 1(z) of Act 45 of 2013]"valuator" means an actuary who, in the opinion of the registrar, has sufficient actuarial knowledge to perform the duties required of a valuator in terms of this Act; and[definition of "valuator" substituted by section 1(zA) of Act 45 of 2013 and by section 1(i) of Act 31 of 2024]"vested component" has the meaning as defined in section 1(1) of the Income Tax Act, subject to the applicable provisos to paragraph 6B of the Second Schedule to the Income Tax Act.[definition of "vested component" added by section 1(i) of Act 31 of 2024]
(2)For the purpose of the application of the provisions of this Act in relation to an organization which is a pension fund organization in terms of paragraph (b) of the definition of "pension fund organization" in subsection (1), any reference in this Act to a fund shall be construed as a reference to that fund or to the board of that fund, as circumstances may require.[subsection (2) substituted by section 1(f) of Act No 22 of 1996]
(3)Unless the context otherwise indicates, words and expressions not defined in subsection (1) have the same meaning ascribed to them in terms of the Financial Sector Regultion Act.[subsection (3) added by section 290 of Act 9 of 2017]

1A. Relationship between Act and Financial Sector Regulation Act

(1)A reference in this Act to the registrar or the Financial Services Board must be read as a reference to the Authority.
(2)Except as otherwise provided by this Act or the Financial Sector Regulation Act, the powers and duties of the Authority in terms of this Act are in addition to the powers and duties that it has in terms of the Financial Sector Regulation Act.
(3)A reference in this Act to the Authority determining or publishing a matter by notice in the Gazette must be read as including a reference to the Authority determining or publishing the matter by notice published in the Register.
(4)Unless expressly provided otherwise in this Act, or this Act requires a matter to be prescribed by regulation, a reference in this Act to a matter being prescribed must be read as—
(a)a reference to the matter being prescribed in a prudential standard, a conduct standard or a joint standard; or
(b)[Editorial note: paragraph (b) not yet commenced.]
(5)
(a)A reference in this Act to the Authority announcing or publishing information or a document on a web site must be read as a reference to the Authority publishing the information or document in the Register.
(b)The Authority may also publish the information or document on its web site.
(6)A reference in this Act to a determined or prescribed fee must be read as a reference to the relevant fee determined in terms of section 237 and Chapter 16 of the Financial Sector Regulation Act.[subsection (6) inserted by section 290 of Act 9 of 2017]
(7)A reference in this Act to an appeal of a decision of the Authority must be read as a reference to a reconsideration of the decision by the Tribunal in terms of the Financial Sector Regulation Act.
[section 1A inserted by section 290 of Act 9 of 2017]

1B. Regulatory instruments

For the purposes of the definition of "regulatory instrument" in section 1(1) of the Financial Sector Regulation Act, any matter prescribed by the Authority in respect of which notice in the Gazette is specifically required by this Act is a regulatory instrument.[section 1B inserted by section 290 of Act 9 of 2017]

2. Application of Act

(1)Subject to section 4A and any other law in terms of which a fund is established, the provisions of this Act apply to any pension fund, including a pension fund established or continued in terms of a collective agreement concluded in a council in terms of the Labour Relations Act, 1995 (Act No. 66 of 1995), and registered in terms of section 4.
(2)
(a)A pension fund established or continued in terms of a collective agreement contemplated in subsection (1) and not yet registered in terms of section 4, must register in terms of this Act before or on 1 January 2008.
(b)Despite any other provision of this Act, the first statutory actuarial valuation of a fund registered in accordance with paragraph (a) must be undertaken at the end of the first financial year following registration or such other date approved by the registrar.
(2A)All beneficiary funds established on or after the commencement date of the Financial Services Laws General Amendment Act, 2008, must register in terms of this Act.[subsection (2A) inserted by section 2(a) of Act 22 of 2008]
(3)A pension fund contemplated in subsection (2) or (2A) must, pending registration in terms of this Act, furnish the registrar with such statistical information as may be requested by the registrar.[subsection (3) substituted by section 2(b) of Act 22 of 2008]
(4)
(a)The provisions of this Act, other than section three and subsections (1) and (2) of section four, shall not apply in relation to a pension fund if the head office of the association which carries on the business of that fund, or, as the case may be, of every employer who is a party to such fund, is outside the Republic, if—
(i)the registrar is satisfied that the rules of the fund applicable to members resident in the Republic are not less favourable than those applicable to members resident outside the Republic, taking into consideration differences in the conditions of service;
(ii)the registrar is satisfied that adequate arrangements exist for ensuring the financial soundness of the fund; and
(iii)the fund furnishes such security as the registrar may from time to time require for the payment of any benefits which may become payable to members resident in the Republic who are South African citizens, or otherwise satisfies the registrar that it will be able to pay such benefits.
(b)The registrar may from time to time require any person carrying on the business in the Republic of a pension fund referred to in paragraph (a), to submit to the registrar such returns and information in connection with that business as the registrar may specify, and if at any time the registrar is no longer satisfied as regards any of the matters specified in paragraph (a) he may advise the person accordingly by notice transmitted to him by registered post, and thereupon the provisions of this Act shall apply in relation to such fund.
(5)
(a)The registrar may, where practicalities impede the strict application of a specific provision of this Act, exempt any fund from, or in respect of, such provision on conditions determined by the registrar.[paragraph (a) substituted by section 2(a) of Act 45 of 2013]
(aA)Any exemption in terms of paragraph (a) may apply to funds generally or be limited in its application to a particular fund or kind of fund, which may, for the purposes of this subsection, be defined in relation to either a category or type of fund or in any other manner.
(b)The registrar may, subject to the Promotion of Administrative Justice Act, 2000 (Act No. 3 of 2000), at any time by notice on the official web site withdraw, wholly or in part and on any ground which he or she deems sufficient, any exemption granted under paragraph (a).[paragraph (b) substituted by section 2(b) of Act 45 of 2013]
[subsection (5) substituted by section 2(c) of Act 22 of 2008]
(6)In the event of a conflict between the provisions of this Act and the Divorce Act, the provisions of this Act prevail.[subsection (6) added by section 2 of Act 31 of 2024]
[section 2 amended by sections 10(a), 10(b) and 10(c) of Act 94 of 1977, by section 13 of Act 103 of 1979, by section 36(6) of Act 9 of 1989, by sections 15(a) and 15(b) of Act 83 of 1992, by sections 22 and 30 of Act 104 of 1993, and by section 211 of Act 66 of 1995, and substituted by section 2 of Act 11 of 2007]

3. ***

[section 3 substituted by section 29 of Act 97 of 1990, by section 9 of Act 41 of 1992, by section 3 of Act 45 of 2013 and repealed by section 290 of Act 9 of 2017]

3A. ***

[section 3A added by section 4 of Act 51 of 1988 and deleted by section 29 of Act 97 of 1990]

3B. ***

[section 3B added by section 2 of Act 54 of 1991 and repealed by section 4 of Act 45 of 2013]

Chapter II
Registration and incorporation

4. Registration of pension funds

(1)Every pension fund must, prior to commencing any pension fund business—
(a)apply to the registrar for registration under this Act; and
(b)be provisionally or finally registered under this Act;
[subsection (1) substituted by section 5(a) of Act 45 of 2013]
(2)An application under subsection (1) shall be accompanied by the particulars and the fee prescribed.[subsection (2) amended by section 14 of Act 86 of 1984, substituted by section 16(a) of Act 83 of 1992 and amended by section 17 of Act 22 of 2008]
(3)The registrar must, if the fund has complied with the prescribed requirements and the registrar is satisfied that the registration of the fund is desirable in the public interest, register the fund provisionally and forward to the applicant a certificate of provisional registration, which provisional registration takes effect on the date determined by the fund or, if no such date has been determined by the fund, on the date of registration by the registrar.[subsection (3) substituted by section 11(a) of Act 65 of 1968 and by section 5(b) of Act 45 of 2013]
(4)If after considering any such application the registrar is satisfied that the fund complies with the conditions prescribed, he shall register such fund and send to the applicant a certificate of registration as well as a copy of the rules of the fund bearing an endorsement of the date of registration.[subsection (4) substituted by section 16(b) of Act 83 of 1992 and amended by section 17 of Act 22 of 2008]
(5)
(a)If the registrar deems it necessary, the registrar may—
(i)request a pension fund to furnish additional information in respect of its application under subsection (1); or
(ii)require a pension fund to verify the information provided in its application under subsection (1).
(b)If a pension fund fails to furnish or verify the information contemplated in paragraph (a) within 60 days from the date of the request, its application under subsection (1) lapses.
[subsection (5) substituted by section 5(c) of Act 45 of 2013]
(6)Subject to the provisions of subsection (7) the provisional registration of a fund under subsection (3) shall be valid for a period of five years, but may in the discretion of the registrar and subject to such conditions and limitations as he may consider desirable, be renewed from time to time for periods not exceeding twelve months at a time and not exceeding five years in the aggregate.[subsection (6) substituted by section 11(b) of Act 65 of 1968]
(7)Whenever a fund which is provisionally registered under this section has complied with all the requirements specified in sub-section (4), the registrar shall register the fund and transmit to it a certificate of registration as well as a copy of its rules with the date of registration duly endorsed thereon, and thereupon the fund shall cease to be provisionally registered.
(8)No fund shall be registered or provisionally registered under this Act except as provided in this section.

4A. Registration of pension funds to which State contributes financially

(1)Notwithstanding anything to the contrary contained in any law, the Minister may, after consultation with the Registrar of Pension Funds, by regulation provide for a management board for a pension fund to which the State contributes financially.
(2)If a management board has been established for a pension fund as is contemplated in subsection (1), such pension fund may, with the consent of the Minister, apply in terms of section 4 for registration.
(3)When an application has been made in terms of subsection (2), the provisions of this Act shall apply to the pension fund concerned, in so far as they can be applied, and as if the pension fund were a pension fund as defined in paragraph (b) of the definition of "pension fund organization" in section 1.
(4)The State President may by proclamation in the Gazette make such regulations as he may deem necessary or expedient to give effect to the provisions of subsections (1), (2) and (3), including regulations whereby—
(a)any provision of this Act or any other law is repealed or amended;
(b)the carrying on of the business of a pension fund referred to in subsection (1) is regulated from the date of the application for registration thereof until the date of registration.
[section 4A inserted by section 2 of Act 119 of 1991]

4B. Effect of registration of pension fund referred to in section 4A

(1)On the registration of a pension fund referred to in section 4A it shall become a juristic person.
(2)Subject to the provisions of subsections (3) and (4), the registration of a pension fund referred to in section 4A shall not affect the assets, rights, liabilities, obligations and membership of such pension fund.
(3)Regulations referred to in section 4A(4) may also provide for the termination of the membership of certain persons of a pension fund referred to in section 4A which has been registered and for their membership of any other pension fund, and the passing of the obligations of the first-mentioned fund towards dependants and nominees of members thereof to the last-mentioned pension fund.
[section 4B inserted by section 2 of Act 119 of 1991]

4C. Transfer to pension fund referred to in section 4A of its assets held by another

(1)If any person holds any assets on behalf of a pension fund referred to in section 4A or has on behalf of any such pension fund invested any assets in any stock, debentures, securities or financial instruments, he shall, on production to him of the certificate of provisional registration or the certificate of registration in respect of such pension fund—
(a)transfer those assets into the name of such pension fund;
(b)take such steps as may be necessary to ensure that on such stock, debentures, securities or financial instruments issued in his name and in any relevant register such endorsements are made as may be necessary to show that the ownership in such stock, debentures, securities or financial instruments vests in such pension fund; and
(c)if requested thereto by such pension fund, transfer to such fund the stock, debentures, securities or financial instruments vested in it.
(2)No registration fee or costs shall be payable in respect of any transfer or endorsement referred to in subsection (1).[subsection (2) substituted by section 3(1) of Act 35 of 2007]
[section 4C inserted by section 2 of Act 119 of 1991]

5. Effect of registration of pension fund

(1)Upon the registration under this Act—
(a)of a fund which is a pension fund organization in terms of paragraph (a) of the definition of “pension fund organization” in sub-section (1) of section one, the fund shall, under the name by which is so registered, and in so far as its activities are concerned with any of the objects set out in that definition, become a body corporate capable of suing and being sued in its corporate name and of doing all such things as may be necessary for or incidental to the exercise of its powers or the performance of its functions in terms of its rules;
(b)of a fund which is a pension fund organization in terms of paragraph (b) of the said definition, all the assets, rights, liabilities and obligations pertaining to the business of the fund shall, notwithstanding anything contained in any law or in the memorandum, articles of association, constitution or rules of any body corporate or unincorporate having control of the business of the fund, be deemed to be assets, rights, liabilities and obligations of the fund to the exclusion of any other person, and no person shall have any claim on the assets or rights or be responsible for any liabilities or obligations of the fund, except in so far as the claim has arisen or the responsibility has been incurred in connection with transactions relating to the business of the fund;
(c)of any fund, the assets, rights, liabilities and obligations of the fund (including any assets held by any person in trust for the fund), as existing immediately prior to its registration, shall vest in and devolve upon the registered fund without any formal transfer or cession.
(1bis)The officer in charge of a deeds registry in which is registered any deed or other document relating to any asset or right which in terms of paragraph (c) of sub-section (1) vests in or devolves upon a registered fund shall, upon production to him by the fund of its certificate of registration or of provisional registration, as the case may be, and of the deed or other document aforesaid, without payment of transfer duty, stamp duty, registration fees or charges, make the endorsements upon such deed or document and the alterations in his registers that are necessary by reason of such vesting or devolution.[subsection (1)bis inserted by section 14 of Act 81 of 1957]
(2)All moneys and assets belonging to a pension fund shall be kept by that fund and every fund shall maintain such books of account and other records as may be necessary for the purpose of such fund: Provided that such money and assets may, subject to such conditions as may be prescribed, also be kept in the name of the pension fund by one or more of the following institutions or persons, namely—
(a)an authorised user as defined in section 1 of the Financial Markets Act, 2012 (Act No. 19 of 2012).[paragraph (a) substituted by section 6(a) of Act 45 of 2013]
(b)a long-term insurer registered in terms of the Long-term Insurance Act, 1998 (Act No. 52 of 1998);
(bA)a manager of a domestic or foreign collective investment scheme registered under the Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002);[paragraph (bA) inserted by section 6(b) of Act 45 of 2013]
(c)a bank registered under the Banks Act, 1990 (Act No. 94 of 1990);
(d)a nominee company; or
(e)a person or investment vehicle approved by the registrar subject to such conditions as the registrar may determine.[paragraph (e) substituted by section 6(d) of Act 45 of 2013]
[subsection (2) amended by section 9(a) of Act 64 of 1990, substituted by section 3 of Act 11 of 2007 and amended by section 6(c) of Act 45 of 2013]
(3)For the purposes of this section, a nominee company is a company which—
(a)
(i)has as its principal object to act as representative of any person;
(ii)is precluded by its Memorandum of Incorporation from incurring any liabilities other than those to persons on whose behalf it holds property;
(iii)has entered into an irrevocable agreement with another person in terms of which such other person has undertaken to pay all expenses of and incidental to its formation, activities, management and liquidation; and
(iv)has been approved by the registrar, subject to conditions as the registrar may impose, including any guarantee for the fulfillment of any obligation in respect of the holding of such property, the generality of the aforegoing provisions not being restricted by the provisions of this paragraph;
[paragraph (a) substituted by section 6(e) of Act 45 of 2013]
(b)is incorporated under the Companies Act where the Memorandum of Incorporation contains a reference to paragraph (a)(i) and (ii) as a restrictive condition contemplated in section 15(2)(b) of the Companies Act.[paragraph (b) substituted by section 6(e) of Act 45 of 2013]
[subsection (3) added by section 9(b) of Act 64 of 1990]
(4)Notwithstanding the provisions of subsection (2), the registrar may permit money and assets to be kept in the name of a nominee company on behalf of the pension fund.[subsection (4) added by section 9(b) of Act 64 of 1990]

6. Allocation of assets and liabilities between pension fund organization and other associated business

(1)Within twelve months after the registration under this Act of a pension fund the business whereof is or has been carried on by any undertaking as part of or in conjunction with any other business in which that undertaking is or has been engaged, the person having control of the business of that undertaking shall submit to the registrar proposals as to the apportionment of the assets, rights, liabilities and obligations of that undertaking between the fund and such other business.
(2)If the proposals mentioned in sub-section (1) are not received within the period specified in that sub-section the registrar shall prepare proposals for the apportionment of the assets, rights, liabilities and obligations of that undertaking between the fund and such other business in such a manner as he may with due regard to all the circumstances consider equitable.
(3)The registrar may for the purpose of preparing any proposals under sub-section (2), require any person having control of the undertaking in question, to lodge with him, within such period as he may specify, any information relating to the business or any part of the business which is or has been carried on by that undertaking, including the business of such pension fund, together with such reports by a valuator or (at the discretion of the registrar) by the auditor of that undertaking, as the registrar may direct.
(4)As soon as practicable after having received any proposals under subsection (1) or after having prepared any proposals as provided in subsection (2), the registrar shall transmit a copy thereof to the principal officer of the fund and publish at the expense of the fund on the official web site and in a newspaper circulating in the district in which the head office of the undertaking is situated, a notice—
(a)indicating that such apportionment is contemplated;
(b)stating the place or places where copies of the proposals in question will be available for inspection by interested persons for a period of thirty days from a date specified in the notice; and
(c)calling upon interested persons to submit to the registrar whatever representations they may deem necessary within the said period of thirty days.
[subsection (4) amended by section 7 of Act 45 of 2013]
(5)Upon the expiration of the period mentioned in paragraph (c) of sub-section (4), the registrar shall proceed to consider any written representations lodged with him in pursuance of the relevant notice and any oral representations which any person who lodged such written representations or the person having control of the business of the undertaking may desire to submit to him, and shall thereafter approve of the proposals in question as drafted or with such modifications as he may deem necessary.
(6)A decision made by the registrar under sub-section (5) shall be binding upon all persons affected thereby.

Chapter III
Manner of administration and powers of registered funds

7. Registered office

(1)Every registered fund shall have a registered office in the Republic.[subsection (1) amended by section 30 of Act 104 of 1993]
(2)Process in any legal proceedings against any such fund may be served by leaving it at the registered office, and in the event of such registered office having ceased to exist, service upon the registrar shall be deemed to be service upon the fund.

7A. Board of fund

(1)Notwithstanding the rules of a fund, every fund shall have a board consisting of at least four board members, at least 50% of whom the members of the fund shall have the right to elect.
(1A)The composition of the board shall at all times comply with the requirements of the rules of the fund and any vacancy on such board shall be filled within such period as prescribed.[subsection (1A) inserted by section 8(a) of Act 45 of 2013]
(2)Subject to subsection (1), the constitution of a board, the election procedure of the members mentioned in that subsection, the appointment and terms of office of the members, the procedures at meetings, the voting rights of members, the quorum for a meeting, the breaking of deadlocks and the powers of the board shall be set out in the rules of the fund: Provided that if a board consists of four members or less, all the members shall constitute a quorum at a meeting.
(3)
(a)A board member appointed or elected in accordance with subsection (1), must attain such levels of skills and training as may be prescribed by the registrar by notice in the Gazette, within six months from the date of the board member’s appointment.
(b)A board member must retain the prescribed levels of skills and training referred to in paragraph (a), throughout that board member’s term of appointment.
[subsection (3) added by section 8(b) of Act 45 of 2013]
(4)A board member must—
(a)within 21 days of removal as board member for reasons other than the expiration of that board member’s term of appointment or voluntary resignation, submit a written report to the registrar detailing the board member’s perceived reasons for the termination;
(b)on becoming aware of any material matter relating to the affairs of the pension fund which, in the opinion of the board member, may seriously prejudice the financial viability of the fund or its members, inform the registrar thereof in writing.
[subsection (4) added by section 8(b) of Act 45 of 2013]
[section 7A inserted by section 2 of Act 22 of 1996]

7B. Exemptions

(1)The registrar may on written application of a fund and subject to such conditions as may be determined by the registrar—
(a)authorise a fund to have a board consisting of less than four board members if such number is impractical or unreasonably expensive: Provided that the members of the fund shall have the right to elect at least 50% of the board members;
(b)exempt a fund from the requirement that the members of the fund have the right to elect members of the board, if the fund—
(i)has been established for the benefit of employees of different employers referred to in the definition of "pension fund" and "provident fund" as defined in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962);
(ii)is a retirement annuity fund;
(iii)is a beneficiary fund; or
(iv)is a pension preservation fund or a provident preservation fund as defined in section 1 of the Income Tax Act, 1962.
[subsection (1) substituted by section 3 of Act 22 of 2008]
(2)The registrar may withdraw an exemption granted under subsection (1)(a) or (1)(b) if a fund no longer qualifies for such exemption.
[section 7B inserted by section 2 of Act 22 of 1996]

7C. Object of board

(1)The object of a board shall be to direct, control and oversee the operations of a fund in accordance with the applicable laws and the rules of the fund.
(2)In pursuing its object the board shall—
(a)take all reasonable steps to ensure that the interests of members in terms of the rules of the fund and the provisions of this Act are protected at all times, especially in the event of an amalgamation or transfer of any business contemplated in section 14, splitting of a fund, termination or reduction of contributions to a fund by an employer, increase of contributions of members and withdrawal of an employer who participates in a fund;
(b)act with due care, diligence and good faith;
(c)avoid conflicts of interest;
(d)act with impartiality in respect of all members and beneficiaries.
(e)act independently;[paragraph (e) added by section 9 of Act 45 of 2013]
(f)have a fiduciary duty to members and beneficiaries in respect of accrued benefits or any amount accrued to provide a benefit, as well as a fiduciary duty to the fund, to ensure that the fund is financially sound and is responsibly managed and governed in accordance with the rules and this Act; and[paragraph (f) added by section 9 of Act 45 of 2013]
(g)comply with any other prescribed requirements.[paragraph (g) added by section 9 of Act 45 of 2013]
[section 7C inserted by section 2 of Act 22 of 1996]

7D. Duties of board

(1)The duties of a board shall be to—
(a)ensure that proper registers, books and records of the operations of the fund are kept, inclusive of proper minutes of all resolutions passed by the board;
(b)ensure that proper control systems are employed by or on behalf of the board;
(c)ensure that adequate and appropriate information is communicated to the members and beneficiaries of the fund informing them of their rights, benefits and duties in terms of the rules of the fund, subject to such disclosure requirements as may be prescribed;[paragraph (c) substituted by section 10(a) of Act 45 of 2013]
(d)take all reasonable steps to ensure that contributions are paid timeously to the fund in accordance with this Act;
(e)obtain expert advice on matters where board members may lack sufficient expertise;
(f)ensure that the rules and the operation and administration of the fund comply with this Act, the Financial Institutions (Protection of Funds) Act, 2001 (Act No. 28 of 2001), and all other applicable laws.[paragraph (f) substituted by section 4 of Act 11 of 2007]
(g)comply with any other prescribed requirements.[paragraph (g) added by section 10(b) of Act 45 of 2013]
[subsection (1), previously unnumbered, numbered by section 10(c) of Act 45 of 2013]
(2)
(a)The board may, in writing and in accordance with a system of delegation set out in the rules, delegate any of its functions under this Act to a person or group of persons, or a committee of the board, subject to conditions that the board must determine.
(b)The board is not divested or relieved of a function delegated under paragraph (a) and may withdraw the delegation at any time.
[subsection (2) added by section 10(c) of Act 45 of 2013]
[section 7D inserted by section 2 of Act 22 of 1996]

7E. Application of certain sections

(1)Sections 7A, 7B, 7C and 7D shall apply to all funds registered on, or after, a date 12 months after the date of commencement of the Pension Funds Amendment Act, 1996 (Act No. 22 of 1996).[subsection (1) substituted by section 6 of Act 104 of 1996]
(2)Any fund registered prior to a date 12 months after the date of commencement of the said Act, shall comply with sections 7A, 7B, 7C and 7D by 15 December 1998.
[section 7E inserted by section 2 of Act 22 of 1996]

7F. Liability of board member

(1)In any proceedings against a board member in terms of this Act, other than for wilful misconduct or wilful breach of trust, the court may relieve the board member from any liability, either wholly or partly, on terms that the court considers just, if it appears to the court that—
(a)the board member has acted independently, honestly and reasonably; or
(b)having regard to all the circumstances of the case, including those connected with the appointment of the board member, it would be fair to excuse the board member.
[section 7F inserted by section 11 of Act 45 of 2013]

8. Principal officer and deputy principal officer

[heading substituted by section 12(a) of Act 45 of 2013]
(1)Every registered fund shall have a principal executive officer.
(2)
(a)The principal officer of a registered fund shall be an individual who is resident in the Republic, and if the principal officer is absent from the Republic or unable for any reason to discharge any duty imposed upon the principal officer by any provision of this Act, the fund shall, in the manner directed by its rules, appoint another person to be its principal officer within such period as may be prescribed by the registrar, after the commencement of a continuing absence or inability to discharge any duty by the principal officer.
(b)A registered fund may appoint a deputy principal officer.
(c)The principal officer may, in writing and in accordance with a system of delegation set out in the rules, delegate any of the principal officer’s functions under this Act and the rules of the fund to the deputy principal officer, subject to conditions that the principal officer must determine.
(d)The principal officer is not divested or relieved of a function delegated under paragraph (c) and the principal officer may withdraw the delegation at any time.
(e)If a fund has appointed a deputy principal officer, the deputy principal officer acts as principal officer when the principal officer is absent from the Republic or unable for any reason to discharge any duty of the principal officer in terms of this Act, until the fund formally in the manner directed in its rules appoints a new principal officer.
[subsection (2) amended by section 30 of Act 104 of 1993 and substituted by section 12(b) of Act 45 of 2013]
(3)Every fund must within 30 days after the registration of a fund or within 30 days after the appointment of a principal officer give the registrar written notice of the appointment by furnishing the registrar with the prescribed information in respect of the appointee.[subsection (3) amended by section 6 of Act 22 of 1996 and substituted by section 4 of Act 22 of 2008]
(4)Despite anything to the contrary in any law or in any agreement, the appointment by a fund of a principal officer is subject to the condition that the appointment may be terminated under subsection (5)(b) and the fund must make any appointment subject to this condition.[subsection (4) amended by section 6 of Act 22 of 1996 and substituted by section 4 of Act 22 of 2008]
(5)
(a)The registrar, subject to the Promotion of Administrative Justice Act, 2000 (Act No. 3 of 2000), may, if the registrar reasonably believes that a principal officer is not, or is no longer, a fit and proper person to hold that office, or if it is not in the public interest that the principal officer holds or continues to hold such office, object to the appointment of a principal officer, stating the grounds for the objection, and provide such to the chairperson of the board and to the appointee.
(b)If the registrar objects to an appointment in terms of paragraph (a), the board must terminate the appointment within 30 days of the registrar informing the board of the finalisation of the processes and procedures provided for in the Promotion of Administrative Justice Act, 2000 (Act No.3 of 2000).
(c)The registrar may for purposes of assessing if a principal officer is not, or is no longer, a fit and proper person in accordance with paragraph (a), have regard to—
(i)the competence and soundness of judgment of the person for the fulfilment of the responsibilities of the particular office and type of fund;
(ii)the diligence with which the person concerned is likely to fulfil those responsibilities;
(iii)previous conduct and activities of the person in business or financial matters; and
(iv)any evidence that the person—
(aa)after 27 April 1994 has been convicted in the Republic or elsewhere of theft, fraud, forgery or uttering a forged document, perjury, an offence under the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004), an offence under the Prevention of Organised Crime Act, 1998 (Act No. 121 of 1998), or any offence involving dishonesty;
(bb)has been convicted of an offence committed after the Constitution of the Republic of South Africa, 1993 (Act No. 200 of 1993), took effect, and sentenced to imprisonment without the option of a fine;
(cc)has contravened the provisions of any law the object of which is the protection of the public against financial loss;
(dd)is a former principal officer of a fund and whose actions contributed to that fund’s inability to pay its debts or caused financial loss to its members;
(ee)has taken part in any business practices that, in the opinion of the registrar, were deceitful, prejudicial, or otherwise improper (whether unlawful or not) or which otherwise brought discredit to that person's methods of conducting business; or
(ff)has taken part in or been associated with any other business practices, or conduct that casts doubt on his or her competence and soundness of judgement.
(d)The registrar may request any person to assist him or her in assessing whether a person is fit and proper to act as a principal officer of a fund.
[subsection (5) added by section 4 of Act 22 of 2008]
(6)A principal officer of a fund must—
(a)within 21 days of his or her appointment being terminated, other than in accordance with the condition referred to in subsection (5)(b), submit a written report to the registrar detailing the principal officer’s perceived reasons for the termination; and
(b)on becoming aware of any matter relating to the affairs of the pension fund which, in the opinion of the principal officer, may prejudice the fund or its members, inform the registrar thereof in writing.
[subsection (6) added by section 4 of Act 22 of 2008]

9. Appointment of auditor

(1)Every registered fund shall in the manner set out in its rules appoint an auditor registered under the Auditing Profession Act, 2005 (Act No. 26 of 2005), who shall not be an officer of the fund, except where the accounts of such a fund in terms of the provisions of any law are to be audited by the Auditor-General.[subsection (1) substituted by section 23 of Act 104 of 1993 and by section 5 of Act 11 of 2007]
(2)Every registered fund shall within 30 days—
(a)from the date of registration appoint an auditor; and
(b)from the date of the appointment apply to the registrar for approval of such appointment.
[subsection (2) substituted by section 10 of Act 64 of 1990]
(3)Section 8(4) and (5) applies with the necessary changes to the appointment of an auditor under this section.[subsection (3) substituted by section 5 of Act 22 of 2008 and by section 13 of Act 45 of 2013]
(4)An auditor of a fund must—
(a)within 21 days of his or her appointment being terminated, other than in accordance with section 8(5), submit a written report to the registrar detailing the auditor's perceived reasons for the termination;
(b)if the auditor, but for the termination referred to in paragraph (a), would have had reason to submit a report contemplated in section 45(3) of the Auditing Profession Act 2005, (Act No. 26 of 2005), submit such a report to the registrar; and
(c)on becoming aware of any matter relating to the affairs of the pension fund, which, in the opinion of the auditor, may prejudice the fund or its members, inform the registrar thereof in writing.
[subsection (4) substituted by section 5 of Act 22 of 2008]
(5)Where the auditor of a pension fund is a partnership, the appointment of such auditor shall not lapse by reason of a change in the composition of the partnership, as long as not less than half of the partners in the reconstituted partnership are persons who were partners as at the date when the appointment of the partnership was last approved by the registrar.
[section 9 substituted by section 12 of Act 65 of 1968]

9A. Appointment of valuator

(1)Every registered fund which in terms of section 16 is required to have its financial condition investigated and reported upon by a valuator, shall appoint a valuator.
(2)The provisions of section 8, excluding the provisions of subsections (1) and (2), apply with the necessary changes to the appointment of a valuator under this section.[subsection (2) substituted by section 6 of Act 22 of 2008 and by section 14(a) of Act 45 of 2013]
(3)The valuator of a registered fund must be a natural person who is resident in the Republic, and if the valuator resigns the appointment or is unable for any reason to discharge any duty imposed upon a valuator by any provision of this Act, the fund shall appoint another person to be its valuator within such period as prescribed.[subsection (3) added by section 14(b) of Act 45 of 2013]
[section 9A inserted by section 13 of Act 65 of 1968]

9B. Protection of disclosures

(1)The registrar must provide a process for the submission of disclosures by a board member, principal officer, deputy principal officer, valuator or other officer or employee of a fund or an administrator, which ensures appropriate confidentiality and provides appropriate measures for the protection of disclosures.
(2)In addition to what is provided in sections 8 and 9 of the Protected Disclosures Act, a disclosure by a board member, principal officer, deputy principal officer, valuator or other officer or employee of a fund or administrator to the registrar constitutes a protected disclosure.
(3)
(a)A board member, principal officer, deputy principal officer, valuator or other officer or employee of a fund or an administrator who makes a protected disclosure in accordance with this section, may not suffer any occupational or other detriment.
(b)Any person referred to in paragraph (a) who suffers any detriment, including occupational detriment as defined in the Protected Disclosures Act, may—
(i)seek the remedies provided for in section 4 of the Protected Disclosures Act, where occupational detriment has been suffered;
(ii)approach any court having jurisdiction for appropriate relief; or
(iii)pursue any other process and seek any remedy provided for in law.
[section 9B inserted by section 15 of Act 45 of 2013]

10. Business which may be carried on

No registered fund shall carry on any business other than the business of a pension fund: Provided that the registrar may approve of a fund carrying on such other business on such conditions and for such period as he may determine if the registrar is satisfied that this is necessary in order to safeguard an investment made by the fund.

11. Requirements for rules

The rules of a fund shall comply with the requirements prescribed by regulation.[section 11 substituted by section 24 of Act 104 of 1993 and by section 17 of Act 83 of 1992]

12. Amendment of rules

(1)A registered fund may, in the manner directed by its rules, alter or rescind any rule or make any additional rule, but no such alteration, rescission or addition shall be valid—
(a)if it purports to effect any right of a creditor of the fund, other than as a member of shareholder thereof; or
(b)unless it has been approved by the registrar and registered as provided in sub-section (4).
(2)Within 60 days from the date of the passing of a resolution adopting the alteration or rescission of any rule or for the adoption of any additional rule, a copy of such resolution shall be transmitted by the principal officer to the registrar, together with the particulars prescribed.[subsection (2) substituted by section 18(a) of Act 83 of 1992, amended by section 17 of Act 22 of 2008 and substituted by section 16(a) of Act 45 of 2013]
(3)If any such alteration, rescission or addition may affect the financial condition of the fund, the principal officer shall also transmit to the registrar a certificate by the valuator or, if no valuator has been employed, a statement by the fund, as to its financial soundness, having regard to the rates of contributions by employers and, if the fund is not in a sound financial condition, what arrangements will be made to bring the fund in a sound financial condition.[subsection (3) substituted by section 18(b) of Act 83 of 1992]
(4)If the registrar finds that any such alteration, rescission or addition is not inconsistent with this Act, and is satisfied that it is financially sound, he shall register the alteration, rescission or addition and return a copy of the resolution to the principal officer with the date of registration endorsed thereon, and such alteration, rescission or addition, as the case may be, shall take effect as from the date determined by the fund concerned or, if no date has been so determined, as from the said date of registration.
(5)A registered fund may at any time consolidate its rules, and in such event the principal officer shall forward to the registrar a copy of such consolidated rules and if the registrar is satisfied that the consolidated rules are not different from the existing rules of the fund, the registrar shall register such consolidated rules and return a copy thereof to the principal officer with the date of registration endorsed thereon, and such consolidated rules shall take effect as from the date determined by the fund concerned or, if no date has been determined, as from the date of registration thereof.[subsection (5) substituted by section 16(b) of Act 45 of 2013]
(6)
(a)The registrar may request such additional information in respect of any alteration, rescission, addition or consolidation of the rules of a registered fund transmitted or forwarded to the registrar for approval as the registrar may deem necessary.
(b)If a registered fund fails to furnish the information requested by the registrar within 180 days from the date of that request, any submission for approval of an alteration, rescission, addition or consolidation of the rules of that fund lapses.
[subsection (6) added by section 16(c) of Act 45 of 2013]

13. Binding force of rules

Subject to the provisions of this Act, the rules of a registered fund shall be binding on the fund and the members, shareholders and officers thereof, and on any person who claims under the rules or whose claim is derived from a person so claiming.

13A. Payment of contributions and certain benefits to pension funds

(1)Notwithstanding any prevision in the rules of a registered fund to the contrary, the employer of any member of such a fund shall pay the following to the fund in full, namely—
(a)any contribution which, in terms of the rules of the fund, is to be deducted from the member’s remuneration; and
(b)any contribution for which, the employer is liable in terms of those rules.
(2)
(a)The minimum information to be furnished to the fund by every employer with regard to payments of contributions made by the employer in terms of subsection (1), shall be as prescribed.[paragraph (a) amended by section 17 of Act 22 of 2008]
(b)If that information does not accompany the payment of a contribution, the information shall be transmitted to the fund concerned not later than 15 days after the end of the month in respect of which the payment was made.
(3)
(a)Any contribution to a fund in terms of its rules, whether it be a contribution contemplated in subsection (1), a contribution for the payment of which a member of the fund is responsible personally, or a contribution to be paid on a member’s behalf—
(i)shall be transmitted directly into the fund’s account with a bank finally registered as such under the Banks Act, 1990 (Act No. 94 of 1990), not later than seven days after the end of the month for which such a contribution is payable, or
(ii)shall be forwarded directly to the fund in such a manner as to have the fund receive the contribution not later than seven days after the end of that month; or
(iii)in the case of a fund contemplated in section 15(4) that has been exempted from the provisions of sections 5(2) and 9 because, in operating as a fund, its assets consist exclusively of one or more policies of insurance with an insurer carrying on long-term insurance business as contemplated in the Insurance Act, 1943, shall be forwarded to the insurer concerned in such manner as to have the insurer receive the contribution not later than seven days after the end of that month.
(b)Any contribution forwarded to and received by a fund in the circumstances contemplated in paragraph (a)(ii), shall be deposited in the fund’s bank account on the first business day following the day of receipt.
(4)An amendment of the rules of a fund relating to the reduction of contributions or the suspension or discontinuation of the payment of contributions shall not affect any liability to pay any contribution which became payable at any time before the date of the resolution whereby the amendment was effected, irrespective of the date on which the amendment may take effect.
(5)When a person who, for any reason except a reason contemplated in section 14, 28 or 29, has ceased to be a member of a fund (in this subsection called the first fund), is in terms of the rules of another fund admitted as a member of the other fund and allowed to transfer to that other fund any benefit or any right to any benefit to which such person had become entitled in terms of the rules of the first fund, the first fund shall, within 60 days of the date of such person’s written request to it, or, if applicable, within any longer period determined by the registrar on application by the first fund, transfer that benefit or right to the other fund in full. The transfer shall be subject to deductions in terms of section 37D and to the rules of the first fund.
(6)
(a)For the purpose of monitoring and ensuring compliance with this section, the principal officer of the fund or any authorized person shall, at the times and in the manner and format prescribed, submit reports to the categories of persons, to be specified in that notice, who have an interest in such compliance.[paragraph (a) substituted by section 7 of Act 22 of 2008 and amended by section 17 of Act 22 of 2008]
(b)In applying paragraph (a), "authorized person" means any person who has been authorized by the relevant board to perform the functions contemplated in that paragraph and of whom the registrar has been advised in writing.
(7)Interest at a rate as prescribed shall be payable from the first day following the expiration of the period in respect of which such amounts were payable on—
(a)the amount of any contribution not transmitted into a fund’s bank account before the expiration of the period prescribed therefor by subsection (3)(a)(i);
(b)the amount of any contribution not received—
(i)by a fund before the expiration of the period prescribed there for by subsection (3)(a)(ii); or
(ii)in the circumstances contemplated in subsection (3)(a)(iii), by the insurer concerned before the expiration of the period prescribed therefor by that subsection;
(c)the value of any benefit, or right to any benefit, not transferred by the first fund to the other fund before the expiration of the period prescribed therefor by subsection (5).
[subsection (7) amended by section 6 of Act 11 of 2007 and by section 17 of Act 22 of 2008]
(8)For the purposes of this section, the following persons shall be personally liable for compliance with this section and for the payment of any contributions referred to in subsection (1):
(a)If an employer is a company, every director who is regularly involved in the management of the company’s overall financial affairs;
(b)if an employer is a close corporation registered under the Close Corporations Act, 1984 (Act No. 69 of 1984), every member who controls or is regularly involved in the management of the close corporation’s overall financial affairs; and
(c)In respect of any other employer of any legal status or description that has not already been referred to in paragraphs (a) and (b), every person in accordance with whose directions or instructions the governing body or structure of the employer acts or who controls or who is regularly involved in the management of the employer’s overall financial affairs.
[subsection (8) added by section 17 of Act 45 of 2013]
(9)
(a)A fund to which the provisions of subsection (8) apply, must request the employer in writing to notify it of the identity of any such person so personally liable in terms of subsection (8).
(b)In the event that an employer fails to comply with the requirements of this provision, all the directors (in respect of a company), all the members regularly involved in the management of the closed corporation (in respect of a closed corporation), or all the persons comprising the governing body of the employer, as the case may be, shall be personally liable in terms of subsection (8).
[subsection (9) added by section 17 of Act 45 of 2013]
(10)A board of a fund must report any non-compliance with the provisions of this section, in accordance with such conditions and in the format as may be prescribed.[subsection (10) added by section 17 of Act 45 of 2013]
[section 13A inserted by section 15 of Act 86 of 1984, amended by section 6 of Act 22 of 1996 and substituted by section 1 of Act 94 of 1997]

13B. Restrictions on administration of pension funds

(1)No person shall administer on behalf of a pension fund the receipt of contributions or the disposition of benefits provided for in the rules of the fund, unless such person has been approved by the registrar and continuously complies with such conditions as may be prescribed.[subsection (1) substituted by section 18(a) of Act 45 of 2013]
(1A)Any application for approval in terms of subsection (1) shall—
(a)be made in the prescribed manner;
(b)be accompanied by the prescribed fee; and
(c)contain such information as may be prescribed by the registrar in order to satisfy the registrar that the applicant complies with the requirements for a fit and proper administrator prescribed by notice in the Gazette, including information in respect of—
(i)personal character qualities of honesty and integrity;
(ii)the competence and operational ability of the applicant to fulfil the responsibilities imposed by this Act;
(iii)the applicant’s financial soundness; and
(iv)any other requirements that may be prescribed.
[subsection (1A) inserted by section 18(b) of Act 45 of 2013]
(1B)The registrar may—
(a)require an applicant to furnish such additional information, or require such information to be verified, as the registrar may deem necessary; and
(b)take into consideration any other information regarding the applicant, derived from any source, including any other regulatory or supervisory authority, if such information is disclosed to the applicant and the applicant is given reasonable opportunity to respond.
[subsection (1B) inserted by section 18(b) of Act 45 of 2013]
(2)Approval in terms of subsection (1) may be limited to the performance of specified functions.
(3)[subsection (3) amended by section 17 of Act 22 of 2008 and deleted by section 18(c) of Act 45 of 2013]
(4)If the registrar deems it desirable in the public interest the registrar may on such conditions, to such extent and in such manner as it is deemed fit, exempt any person or category of persons from the provisions of subsections (1) and (3), and may at any time revoke or amend any such exemption in a similar manner.[subsection (4) substituted by section 7(a) of Act 11 of 2007]
(5)An administrator contemplated in subsection (1) must—
(a)endeavour to avoid conflict between the interests of the administrator and the duties owed to the fund, and any conflict of interest or potential conflict of interest must be disclosed by the administrator to the board setting out full particulars of how such conflict will be managed;
(b)administer the fund in a responsible manner;
(c)keep proper records;
(d)employ adequately trained staff and ensure that they are properly supervised;
(e)have well-defined compliance procedures;
(f)maintain the prescribed financial resources to meet its commitments and to manage the risks to which the fund is exposed;[paragraph (f) substituted by section 18(d) of Act 45 of 2013]
(g)furnish the registrar with such information as requested by the registrar where such request is reasonable, the purpose for the request is disclosed and reasonable notice is given to the administrator in order to meet the request.
(h)within a reasonable time provide a fund with information pertaining to the fund that the administrator has in its possession or under its control as requested by the fund in an electronic format capable of manipulation by the fund or in any other format if the information pertaining to the fund is not available in electronic format;[paragraph (h) added by section 18(e) of Act 45 of 2013]
[subsection (5) added by section 7(b) of Act 11 of 2007]
(6)If the registrar has reasonable grounds to consider that the interests of the members of a fund or of the public so require, the registrar may—
(a)direct the administrator to take any steps, or to refrain from performing or continuing to perform any act, in order to terminate or remedy any irregularity or undesirable practice or state of affairs that has come to the knowledge of the registrar: Provided that the registrar may not make an order contemplated in section 6D(2)(b) of the Financial Institutions (Protection of Funds) Act, 2001 (Act No. 28 of 2001);[paragraph (a) substituted by section 18(g) of Act 45 of 2013]
(b)direct—
(i)the administrator to withdraw from the administration of the fund, whereupon the board of the fund must in accordance with the registrar’s directions, but subject to this Act and the rules of the fund, arrange for the administration of the fund to be taken over by another administrator or person;
(ii)that the costs of the other administrator or person be defrayed from the financial resources maintained under subsection (5)(f); or
[paragraph (b) substituted by section 18(g) of Act 45 of 2013]
(c)suspend or withdraw the approval granted to the administrator on such conditions and for such period as the registrar deems fit, provided that where an administrator's approval is suspended, the registrar may permit the administrator to continue to provide services to the funds under its administration subsequent to the date of the suspension, but it may not enter into an agreement to provide any new or additional services to any fund while the suspension is in force.
[subsection (6) added by section 7(b) of Act 11 of 2007 and amended by section 18(f) of Act 45 of 2013]
(7)[subsection (7) added by section 7(b) of Act 11 of 2007 and deleted by section 8(a) of Act 22 of 2008]
(7A)
(a)All records, documentation and information relating to the administration of a fund, its members and former members that are held by an administrator or is under an administrator’s control, is the property of the fund, including information that the administrator, in the course and scope of its work as administrator or former administrator of the fund, created or came to possess or control.
(b)An administrator—
(i)may not destroy or otherwise dispose of any information referred to in paragraph (a) without the consent of the fund; and
(ii)must maintain information referred to in paragraph (a) in an orderly format.
[subsection (7A) inserted by section 18(h) of Act 45 of 2013]
(8)Before taking any action under subsection (6), the registrar must inform the administrator and the board of the fund of the proposed action and grounds therefor, and afford them a reasonable opportunity to be heard.[subsection (8) added by section 7(b) of Act 11 of 2007 and substituted by section 8(b) of Act 22 of 2008]
(9)If it is in the public interest, the registrar may through appropriate media make known the suspension or withdrawal of an approval referred to in subsection (6).[subsection (9) added by section 7(b) of Act 11 of 2007 and substituted by section 8(c) of Act 22 of 2008]
(10)When an administrator becomes aware of any material matter relating to the affairs of a fund, which in the opinion of the administrator may prejudice the fund or its members, the administrator must inform the registrar of that matter in writing without undue delay.[subsection (10) added by section 18(i) of Act 45 of 2013]
[section 13B inserted by section 20 of Act 83 of 1992]

14. Amalgamations and transfers

(1)Subject to subsection (8), no transaction involving the amalgamation of any business carried on by a registered fund with any business carried on by any other person (irrespective of whether that other person is or is not a registered fund), or the transfer of any business from a registered fund to any other person, or the transfer of any business from any other person to a registered fund, shall be of any force or effect unless—
(a)the scheme for the proposed transaction, including a copy of every actuarial or other statement taken into account for the purposes of the scheme, has been submitted to the registrar within a prescribed period of the effective date of the transaction;[paragraph (a) substituted by section 8(b) of Act 11 of 2007 and by section 19(a) of Act 45 of 2013]
(b)the registrar has been furnished with such additional particulars or such a special report by a valuator, as he may deem necessary for the purposes of this sub-section;
(c)the registrar is satisfied that the scheme referred to in paragraph (a) is reasonable and equitable and accords full recognition—
(i)to the rights and reasonable benefit expectations of the members transferring in terms of the rules of a fund where such rights and reasonable benefit expectations relate to service prior to the date of transfer;
(ii)to any additional benefits in respect of service prior to the date of transfer, the payment of which has become established practice; and
(iii)to the payment of minimum benefits referred to in section 14A, and that the proposed transactions would not render any fund which is a party thereto and which will continue to exist if the proposed transaction is completed, unable to meet the requirements of this Act or to remain in a sound financial condition or, in the case of a fund which is not in a sound financial condition, to attain such a condition within a period of time deemed by the registrar to be satisfactory;
[paragraph (c) substituted by section 3 of Act 54 of 1991, by section 21 of Act 83 of 1992 and by section 2 of Act 39 of 2001]
(d)the registrar has been furnished with such evidence as he may require that the provisions of the said scheme and the provisions, in so far as they are applicable, of the rules of every registered fund which is a party to the transaction, have been carried out or that adequate arrangements have been made to carry out such provisions at such times as may be required by the said scheme;
(e)the registrar has forwarded a certificate to the principal officer of every such fund to the effect that all the requirements of this sub-section have been satisfied.
[subsection (1) amended by section 8(a) of Act 11 of 2007]
(2)
(a)Whenever a scheme for any transaction referred to in subsection (1) has come into force in accordance with the provisions of this section, the relevant assets and liabilities of the bodies so amalgamated shall respectively vest in and become binding upon the resultant body, or as the case may be, the relevant assets and liabilities of the body transferring its assets and liabilities or any portion thereof shall respectively vest in and become binding upon the body to which they are to be transferred.
(b)Any transfer contemplated in paragraph (a) must be effected within 60 days of the date of the certificate issued by the registrar in terms of paragraph (e) of subsection (1).
(c)Any assets transferred in accordance with paragraph (b) must be increased or decreased with fund return from the effective date of transfer until the date of final settlement.[paragraph (c) added by section 19(b) of Act 45 of 2013]
[subsection (2) substituted by section 8(c) of Act 11 of 2007]
(3)The officer in charge of a deeds registry in which is registered any deed or other document relating to any asset which is transferred in accordance with the provisions of sub-section (2), shall, upon production to him by the person concerned of such deed or other document and of the certificate referred to in paragraph (e) of subsection (1), without payment of transfer duty, stamp duty, registration fees or charges, make the endorsements upon such deed or document and the alterations in his registers that are necessary by reason of the amalgamation or transfer.[subsection (3) substituted by section 15 of Act 81 of 1957]
(4)A transaction effected in terms of this section shall not deprive any creditor of a party thereto (other than in his capacity as a member or a shareholder of such party) of any right or remedy which he had immediately prior to that date against any party to the transaction or against any member or shareholder or officer of such party.
(5)Any application for approval of a scheme lodged with the registrar in terms of subsection (1)(a) shall lapse if the registrar requests further information and no satisfactory response is received from either the transferor or the transferee fund, as the case may be, within a period of 180 days from the date of such request.[subsection (5) added by section 8(d) of Act 11 of 2007]
(6)The registrar may withdraw or amend a certificate issued in terms of subsection (1)(e), in circumstances where the registrar is satisfied that—
(a)the scheme or information provided in terms of subsection (1) was so inaccurate that the registrar would not have granted such certificate had the registrar been aware of the actual facts;[paragraph (a) substituted by section 19(c) of Act 45 of 2013]
(b)the certificate contains a bona fide error; or[paragraph (b) amended by section 19(d) of Act 45 of 2013]
(c)as a result of amendments to legislation, the implementation of the scheme in terms of subsection (1) would prejudice members.[paragraph (c) added by section 19(d) of Act 45 of 2013]
[subsection (6) added by section 8(d) of Act 11 of 2007]
(7)
(a)Notwithstanding anything to the contrary in the rules of a fund, a retirement annuity fund shall not prohibit the transfer of business that relates to a member's interest or non-member spouse's interest, at the request of such a member or non-member spouse from one retirement annuity fund to another.
(b)No fees or commissions of any nature are payable, directly or indirectly, by any party or by any agent, mandatary or representative of such party—
(i)in return for the facilitation, intermediation or recommendation of the transfer; or
(ii)for financial services rendered by a financial services provider or representative after the transfer in respect of the transferred interest of the transferring member or non-member spouse which exceeds the fees or maximum commission that would have been permissible for such services in terms of the Long Term Insurance Act, 1998 or any regulations made thereunder had the transfer not been done other than fees—
(aa)payable to the registrar;
(bb)negotiated and agreed to in writing by the transferring member or non-member spouse annually, which fees are—
(A)payable by the transferring member or non-member spouse personally; or
(B)authorised by the transferring member or non-member spouse to be paid by the fund or administrator.
[paragraph (b) substituted by section 9(a) of Act 22 of 2008 and amended by section 19(e) of Act 45 of 2013]
[subsection (7) added by section 8(d) of Act 11 of 2007]
(8)With effect from the commencement of the Pension Funds Amendment Act, 2007, subsection (1) does not apply where the affected members were duly informed of a proposed transaction and any objection the members may have, has been resolved to the satisfaction of the board of the fund concerned, and—
(a)both transferor and transferee funds are valuation exempt;
(aA)both transferor and transferee funds are beneficiary funds; or
(b)the transferor or transferee fund is neither registered nor required to register under this Act and the other fund is valuation exempt,
and, furthermore, that—
(i)such registered funds keep proper records of all such transactions;
(ii)such registered funds comply with any further requirements as the registrar may prescribe;
(iii)the assets and liabilities are transferred within 180 days of the effective date of transfer; and
(iv)any assets transferred must be increased or decreased with fund return from the effective date until the date of final settlement.
[subsection (8) added by section 8(d) of Act 11 of 2007 and substituted by section 9(b) of Act 22 of 2008]
(9)Notwithstanding subsections (1) and (8), the registrar may exempt a transaction contemplated in subsection (1) from the provisions of this section, subject to such requirements or conditions as may be prescribed.[subsection (9) added by section 19(f) of Act 45 of 2013]

14A. Minimum benefits

(1)Every registered fund shall provide the following minimum benefits:
(a)The benefit paid to a member who ceases to be member of the fund prior to retirement in circumstances other than liquidation of the fund shall not be less than the minimum individual reserve;
(b)the benefit paid to a member if the fund is liquidated in terms of section 28 or 29 shall not be less than the minimum individual reserve: Provided that, where the fair value of the assets of the fund after recovery of any debt owed by the employer in terms of section 30(3) is lower than the sum of the minimum individual reserves for all members who are being included in the distribution of the assets after adjustment for any benefits paid previously and the cost of annuity policies which will provide equivalent pensions to all existing pensioners and deferred pensioners, the minimum individual reserve may be proportionally reduced in the ratio which the fair value of the assets bears to the total of all the minimum individual reserves adjusted for any benefits paid previously plus the cost of such annuity policies;
(c)if a category ofthe fund is converted from a defined benefit category to a defined contribution category, the amount to be credited to the member's individual account shall not be less than the minimum individual reserve: Provided that, where the fair value of the assets of the fund after recovery of any debt owed by the employer in terms of section 30(3) is lower than the sum of the minimum individual reserves for all members after adjustment for any benefits paid previously and the cost of annuity policies which will provide equivalent pensions to all existing pensioners and deferred pensioners, the minimum individual reserve may be proportionally reduced in the ratio which the fair value of the assets bears to the total of all the minimum individual reserves adjusted for any benefits paid previously plus the cost of such annuity policies;
(d)at least once every three years, a pension increase shall be granted to pensioners and deferred pensioners (other than pensioners referred to in section 14B(3)(c)) with effect from the valuation date on which the increase is based, which increase shall not be less than the minimum pension increase, starting with the first actuarial valuation following the commencement date.[paragaraph (d) substituted by section 20 of Act 45 of 2013]
[subsection (1) substituted by section 9 of Act 11 of 2007]
(2)
(a)In respect of a fund which is registered on or after a date three months after the commencement date, subsection (1) shall apply on registration.
(b)In respect of a fund which is registered prior to a date three months after the commencement date—
(i)subsection (1)(a) shall apply from a date 12 months after the surplus apportionment date; and
(ii)subsection (1)(b), (c) and (d) shall apply from the commencement date.
(3)If the employer or the board exercises any right that the employer or the board has in terms of the rules to liquidate the fund, or to terminate participation of a particular employer in the fund, prior to the commencement date or to change the basis upon which future benefits accrue prior to the date from which subsection (1)(a) applies to the fund, the members may not seek redress against the employer or the board in respect of any increase in value of the benefits that would occur as a result of the application of minimum individual reserves to the fund.
[section 14A inserted by section 3 of Act 39 of 2001]

14B. Determination of member's individual account, minimum individual reserve and minimum pension increase

(1)The member's individual account in relation to an individual member of a defined contribution category of a fund shall be determined by the board in accordance with the formula—MC+EC-X+[AS] IC+OCwhere—
(a)MC represents the contributions paid by the member;EC represents the contributions paid by the employer in respect of the member;X represents such reasonable expenses as the board determines;IC represents the amount credited to the member's individual account upon the commencement of the member's membership of the fund or upon the conversion of the category of the fund to which the member belongs from a defined benefit category to a defined contribution category of a fund or upon the amalgamation of the member’s fund with any other fund, if any, other than amounts taken into account in terms of OC; andOC represents any other amounts lawfully permitted, credited to or debited, deducted or withdrawn from the member’s individual account, in terms of this Act, if any, and includes any savings withdrawal benefit paid from the savings component; and[paragraph (a) substituted by section 21(a) of Act 45 of 2013 and amended by section 3(a) of Act 31 of 2024]
(b)MC, EC, X, IC and OC are increased or decreased with fund return: Provided that the board may elect to smooth the fund return.
(2)In determining the minimum individual reserve of a member of a—
(a)defined benefit category of a fund, the board shall determine the greater of—
(i)the fair value equivalent of the present value of the member's accrued deferred pension: Provided that—
(aa)where there is not a uniform rate of accrual over the full period of membership of the fund, the accrued deferred pension shall be calculated assuming a uniform rate of accrual as if the member had remained in service until normal retirement date as defined in the rules of the fund, but which uniform rate of accrual will not be less than the uniform rate of accrual that is calculated based on the period of service completed up to the date of calculation;
(bb)the fair value equivalent of the present value shall assume rates of increase in the pension before and after retirement, mortality rates and rates of discount as prescribed by the registrar; and
(cc)the term "accrued deferred pensions" in this section shall include the portion of any lump sum benefit payable at normal retirement date which corresponds to prior service;[subparagraph (cc) amended by section 3(b) of Act 31 of 2024]
(ii)an amount equal to the value of the member’s contributions, less such reasonable expenses as determined by the board as from the date of payment of a contribution plus any amount payable in terms of the rules of the fund in excess of the member contributions, increased or decreased with fund return as from the date that the member joined the fund: Provided that the board may elect to smooth the fund return; and[subparagraph (ii) amended by section 21(b) of Act 45 of 2013]
(iii)when determining the amounts referred to in subparagraphs (i) and (ii), the pensionable service applied in the determination of the accrued deferred pension referred to in subparagraph (i) must be reduced to take into account any savings withdrawal benefit previously paid from the savings component as permitted in terms of the Income Tax Act and the amount referred to in subparagraph (ii) must be reduced by any savings withdrawal benefit previously paid from the savings component; and[subparagraph (iii) added by section 3(b) of Act 31 of 2024]
(b)defined contribution category of a fund, the board shall determine the value of the member's individual account as determined in terms of subsection (1) plus a share of the investment reserve account, the member surplus account, and such contingency reserve accounts as the board may determine should be included in terms of section 15G, in the proportion that the member's individual account value as at the effective date of the calculation bears to the total of all members' individual account values as at that date or such other method of apportionment as the board deems reasonable.
(3)
(a)The board shall establish and implement a policy with regard to increases to be granted to pensioners and deferred pensioners, which policy must—
(i)aim to award a percentage of the consumer price index, or some other measure of inflation which is deemed suitable by the board; and[subparagraph (i) substituted by section 21(c) of Act 45 of 2013]
(ii)set the frequency with which increases will be considered in line with the policy: Provided that increases should be considered each year, with comparison to the minimum pension increase at least once every three years.
(b)The policy contemplated in paragraph (a) must be communicated to pensioners and deferred pensioners when it is established and whenever it is changed.
(c)The policy contemplated in paragraph (a) will not be required where—
(i)pensioners on or after retirement in terms of the rules of a fund and in line with the pension increase policy of the fund at the time of purchase, purchase a policy from a long-term insurer registered under the Long-term Insurance Act, 1998 (Act No. 52 of 1998);[subparagraph (i) substituted by section 21(d) of Act 45 of 2013]
(ii)pensioners on whose behalf a fund, on or after retirement in terms of the rules of the fund and in line with the pension increase policy of the fund at the time of purchase, purchase a policy of insurance covering that fund’s full liability in respect of those pensioners from a long-term insurer registered under the Long-term Insurance Act, 1998 (Act No. 52 of 1998);[subparagraph (ii) substituted by section 21(d) of Act 45 of 2013]
(iii)pensioners elected to receive a level pension, or a pension with fixed increases, or a pension the amount of which is elected by the pensioner from time to time, paid from the fund in terms of the rules of the fund.
(4)
(a)In determining the minimum pension increase, the board shall increase pensions by a factor, P, where P is equal to the greater of the increase that the board would grant in terms of the pension increase policy established in terms of subsection (3) and—
(i)the increase in paragraph (b), if the increase in paragraph (b) is less than the increase in paragraph (c); or
(ii)the increase in paragraph (c), if the increase in paragraph (b) is greater than or equal to the increase in paragraph (c):
Provided that if the application of the increase factor, P, causes a fund to become financially unsound, the board, after taking into account any balance in any contingency reserve account, may limit P to such amount as will not cause the fund to be in a financially unsound condition.[paragraph (a) amended by section 21(e) of Act 45 of 2013]
(b)The board shall determine the increase that would result from—
(i)accumulating with fund return the liabilities for pensioners at their dates of retirement in the fund or date of joining the fund if the pensioner retired from another fund and became a member of the fund as a result of an approval granted in terms of section 14(1) and deferred pensioners at their dates of termination of service, including any contingent liabilities payable, in terms of the rules of a fund, on termination of those pensions or deferred pensions to persons who are still alive at the effeetive date of the calculation, adjusted to an equivalent fair value of assets less—
(aa)pension payments;
(bb)cash amounts paid on retirement; and
(cc)those expenses that the board deems reasonable,
plus the liability in respect of any special increases that have been granted to pensioners and deferred pensioners which were funded otherwise than through fund return: Provided that, if the board is unable to grant the full minimum pension increase as at the surplus apportionment date, the board may reduce the amount determined in terms of this subparagraph at that date such that the amount equals the pensioner liability as at the surplus apportionment date after enhancement in terms of section 15B(5)(b), if applicable, increased to an equivalent fair value of assets, and the board may accumulate thereafter in terms of this paragraph, using such reduced amount, as if it was the balance determined in terms of this paragraph as at the surplus apportionment date prior to such reduction; and
(ii)dividing the amount calculated in terms of subparagraph (i) by the present value of current pensions and deferred pensions after making allowance for mortality, expenses and future pension increases at the rate determined by the board, adjusted to an equivalent fair value of assets.
(c)The board shall determine the increase required to each pension to provide the pension payable in the month following retirement, nett of the commutation of any portion of the pension for cash or the deferred pension at the date of termination of service, multiplied by the change in the consumer price index from the date of retirement in the case of a pensioner, or the date of termination of service in the case of a deferred pensioner, to the effective date of the calculation of the increase.
(d)Where the board finds it impractical to derive the increases in paragraphs (a), (b) and (c) for each individual pensioner or deferred pensioner, the board may use an approximate method which will preserve the broad principles behind paragraphs (a), (b) and (c).
(5)For purposes of subsection (4), where the pension has arisen because of the death of a member rather than the member's retirement, any reference in that subsection to "retirement" shall be construed as a reference to death.
(6)In determining the minimum individual reserve of a pensioner or a deferred pensioner, the board shall determine the fair value equivalent of the present value of the pension, or the deferred pension, payable to that member after implementation of any minimum pension increase in terms of subsections (4) and (5), including the present value of any contingent pension payable to the member's spouse, children and other dependants
[section 14B inserted by section 3 of Act 39 of 2001 and substituted by section 10 of Act 11 of 2007]

Chapter IV
Documents to be deposited with registrar

15. Accounts

(1)Subject to the provisions of subsection (4), every registered fund shall, within six months as from the expiration of every financial year, furnish to the registrar such statements in regard to its revenue, expenditure and financial position as may be prescribed, duly audited and reported on by the auditor of the fund.[subsection (1) substituted by section 22(a) of Act 83 of 1992 and amended by section 17 of Act 22 of 2008]
(2)Every registered fund shall, when furnishing to the registrar the documents referred to in sub-section (1), also furnish to the registrar—
(a)a copy of any special report by the auditor relating to any of the activities of the fund during the financial year to which such documents relate;
(b)a copy of any annual report that the fund may have issued to its members or shareholders in respect of the said financial year; and
(c)a copy of any other statement that the fund may have presented to its members or shareholders in respect of any of its activities during such financial year.
(3)If the registrar is of the opinion that any document furnished by a registered fund in terms of sub-section (1) does not correctly reflect the revenue and expenditure or the financial position (as the case may be) of the fund, he may reject the said document, and in that event—
(a)he shall notify the fund concerned of the reasons for such rejection; and
(b)the fund shall be deemed not to have furnished the said document to the registrar: Provided that in such event the registrar may apply the provisions of section thirty-three, even though the period concerned may have expired before application is made for extension.
(4)If a fund has been exempted as contemplated in section 2(5)(a), the registrar may authorise such fund to furnish to him or her, instead of the statements referred to in subsection (1), the information prescribed.[subsection (4) added by section 22(b) of Act 83 of 1992 and substituted by section 10 of Act 22 of 2008]

15A. Rights to use of actuarial surplus

(1)All actuarial surplus in the fund belongs to the fund.
(2)Once actuarial surplus is apportioned to either the member surplus account, or the employer surplus account in terms of sections 15B and 15C, or directly for the benefit of members and former members subject to the uses specified in section 15D(1), members, former members and the employer acquire rights to such actuarial surplus as provided for in this section.[subsection (2) substituted by section 22(a) of Act 45 of 2013]
(3)After the commencement date, the only portion of the assets of the fund that may be utilised by, or for the benefit of, the employer is any credit balance in the employer surplus account: Provided that the employer may continue a contribution holiday, which the employer was already taking immediately prior to the commencement date, only if the value of any contribution holiday taken by the employer during any period between the commencement date and the surplus apportionment date, as increased or decreased with fund return, over the corresponding period is added to the actuarial surplus to be apportioned at the surplus apportionment date in terms of section 15B(5).[subsection (3) amended by section 22(b) of Act 45 of 2013]
(4)Any credit balance in the member surplus account must be used for the benefit of members as provided for in section 15D.
[section 15A inserted by section 4 of Act 39 of 2001]

15B. Apportionment of existing surplus

(1)
(a)Subject to paragraph (b), the board of every fund that commenced prior to 7 March 2002 shall submit to the registrar a scheme for the proposed apportionment of any actuarial surplus (in this section referred to as the scheme) plus the details regarding any surplus utilised improperly by the employer as defined in subsection (6) as at the effective date of the statutory actuarial valuation of the fund coincident with, or next following, the commencement date.
(b)The board shall submit the scheme not later than 18 months after the effective date contemplated in paragraph (a): Provided that—
(i)if the board elects to apportion actuarial surplus at a date earlier than the effective date of the next statutory actuarial valuation, it may do so if the statutory valuation date is advanced to such earlier date and the registrar is satisfied as to the reasons therefor;
(ii)if the fund is liquidated in terms of section 28 or 29 at a date prior to the effective date of the next statutory actuarial valuation, the effective date of the liquidation shall be the surplus apportionment date;
(iii)if a category of members of the fund is converted from defined benefit to defined contribution and the effective date of the conversion is earlier than the next statutory actuarial valuation date, the effective date of the conversion shall be the surplus apportionment date and a statutory actuarial valuation is required as at such date; or
(iv)if the registration of a fund is cancelled in accordance with section 27 and the effective date of cancellation is earlier than the next statutory actuarial valuation date, the effective date of the cancellation shall be the surplus apportionment date.
(2)A scheme—
(a)shall comply with such conditions as may be prescribed; and
(b)may involve—
(i)the improvement of benefits to existing members;
(ii)increases to benefits or transfer values in respect of former members;
(iii)the crediting of an amount to the member surplus account;
(iv)the crediting of an amount to the employer surplus account; or
(v)any two or more of the matters contemplated in subparagraphs (i) to (iv).
(3)The board shall appoint a person to represent the interests of former members in the development of the scheme and such person shall—
(a)assist the board in—
(i)identifying former members;
(ii)communicating proposals to former members and to the funds to which former members transferred;
(iii)conveying proposals from former members, and the funds to which they transferred, to the board; and
(iv)collating any objections to the scheme from former members and the funds to which they transferred;
(b)be required to report, in writing to the board, on—
(i)the adequacy of the steps taken by the board to include former members in terms of subsection (4); and
(ii)where it was necessary for the board to apply its discretion with regard to the inclusion of former members and the apportionment of actuarial surplus to such former members, whether or not the exercise of such discretion was reasonable taking into account the demands of equity within the bounds of practicality and the circumstances of the particular fund: Provided that such report must accompany the scheme when it is submitted to the registrar in terms of subsection (9).
(4)The board shall determine who may participate in the apportionment of actuarial surplus, and shall include in such apportionment existing members and any former members who left the fund in the period from 1 January 1980 to the surplus apportionment date: Provided that—
(a)the board may exclude from participation former members in respect of whom the board satisfies the registrar that insufficient records are available to enable the additional benefits that may be due to such former members to be calculated, after the board has taken reasonable steps—
(i)to obtain such records from the administrator;
(ii)to construct such records from the records of the—
(aa)employer;
(bb)any fund to which former members transferred; or
(cc)a trade union or staff association active in the workplace during this period; or
(iii)if the steps in subparagraphs (i) and (ii) do not yield sufficient information, to obtain such records from the potential claimants themselves following an advertisement—
(aa)on a national basis and in the area where the former members used to work; or
(bb)on a more limited basis as approved by the registrar if representations by the fund satisfy the registrar that limited advertisement will be adequate,
inviting the former members to come forward with evidence to substantiate their claim, after which advertisement the board should wait at least six months but no longer than nine months before excluding any former members because of a lack of sufficient information to enable the calculations to be performed;
(b)rather than excluding former members whose individual benefits cannot be determined, the board may set aside a portion of the actuarial surplus in a contingency reserve account explicitly established to satisfy claims of former members in terms of subsection (5)(e).
(5)The board shall apportion the actuarial surplus between the various classes of stakeholders whom the board has determined shall participate in the apportionment in terms of subsection (4), following which such portion as is due to the employer shall be credited to the employer surplus account: Provided that—
(a)the actuarial surplus to be apportioned shall be increased by the amount of actuarial surplus utilised improperly by the employer prior to the surplus apportionment date as determined in terms of subsection (6);
(b)former members shall have the benefits previously paid to them, or the amounts previously transferred on their behalf, increased to the minimum benefit determined in terms of section 14B(2) or 14B(6) as at the date when they left the fund, with such increase adjusted to the surplus apportionment date with fund return over the corresponding period, and pensioners and deferred pensioners shall have their pensions increased to the minimum pension as determined in terms of section 14B(4), as a prior charge on the actuarial surplus to be apportioned: Provided further that, where the actuarial surplus to be apportioned is insufficient to permit such increases after being increased in terms of paragraph (a), the amounts shall be proportioned downwards until the total to be paid to former members, pensioners and deferred pensioners equals the actuarial surplus to be apportioned;[paragraph (b) amended by section 23(a) of Act 45 of 2013]
(c)after deducting the cost of the increases to former members, pensioners and deferred pensioners in terms of paragraph (b) the balance of the actuarial surplus shall be equitably split between existing members, former members and the employer in such proportions as the board shall determine after taking account of the financial history of the fund: Provided further that the registrar may prescribe certain methods which, if used, shall be deemed to be equitable;
(d)if the amount apportioned to the employer in terms of paragraph (c) is less than the actuarial surplus utilised improperly by the employer as determined in subsection (6), the difference between the amount—
(i)determined in terms of subsection (6); and
(ii)apportioned to the employer in terms of paragraph (c),
shall represent a debt owed by the employer to the fund and the employer must submit a scheme conforming with the prescribed reguirements and repay that debt within a maximum period approved by the registrar;
(e)the board shall determine how, in the case of existing members and former members, the allocated portion of actuarial surplus shall be applied for their benefit, including the crediting of any portion to the members' surplus accounts or to the members' individual accounts, as the case may be: Provided further that the board may allocate a portion of the actuarial surplus to be used for former members to a contingency reserve account which will be used to satisfy the claims of former members—
(i)who have been identified in subsection (4)(a) but who cannot be traced; or
(ii)who did not substantiate their claim during the nine-month period following the advertisement in subsection (4)(a)(iii) but who do so after the end of this period; and
(f)the surplus due to any stakeholder as a result of a surplus apportionment scheme approved by the registrar, shall be increased or decreased with fund return from the date determined in line with section 15B(1) until the date the surplus is awarded, paid or allocated.
(6)
(a)For the purposes of this subsection—"cost" means the difference between the accrued liabilities in the fund as determined by the valuator immediately before, and immediately after, the improper utilisation of surplus: Provided that, where more than one use of actuarial surplus occurred simultaneously, the valuator shall determine how the difference between the accrued liabilities before any of the uses, and the accrued liabilities after all the uses at that date, shall be split between those uses;"employer" means the employer or employers participating in the fund at the time of the improper utilisation of surplus, determined in accordance with this section, and whom benefited from the improper use: Provided that where a subsequent employer or employers by contract or law became liable for the employee-related liabilities of the previous employer or employers, the subsequent employer is also liable for the apportionment of surplus used improperly;'selected', in relation to members, means, in the case of a granting of benefits, a group of members to whom the benefits were granted to the exclusion of other members, and, in the case of a granting of benefits conditional on election by the member, a group of members to which the election was granted to the exclusion of other members.
(b)The board shall investigate any improper utilisation of surplus by the employer prior to the surplus apportionment date which shall consist of any of the following amounts incurred from I January 1980 or since the date of the fund's commencement or such earlier date agreed to by the employer to the surplus apportionment date:
(i)The cost of benefit improvements for executives in excess of the cost that would have applied had the executives enjoyed the benefits provided to other members;
(ii)the cost of any additional pensions or deferred pensions or lump sum benefits granted to selected members in lieu of the employer's obligation to subsidise medical costs of those members after retirement;
(iii)the cost to recognise prior pensionable service for selected members or for members transferred into the fund in excess of any amount paid into the fund in respect of such prior service; and
(iv)the value of any contribution holiday enjoyed by the employer after the commencement date.
(c)The board may exclude the following from surplus utilised improperly:
(i)Any use of actuarial surplus which the registrar is satisfied was approved by the members, or by trade unions representing members, after a clear and comprehensive communication exercise occurred as part of a negotiated utilisation of surplus by stakeholders;
(ii)the cost or value of surplus utilised improperly by the employer shall be reduced by any contributions or payments made to the fund by the employer and for such specific purpose;
(iii)for the purposes of paragraph (b)(i), where, in accordance with the rules of the fund, the use for the executive benefit in question has existed in the fund in its current form since inception of the fund; or
(iv)such surplus utilised for the purposes of remedying past unfair discrimination if the registrar is satisfied that the surplus utilised improperly was used for such purposes.
(d)The investigation contemplated in paragraph (b) shall—
(i)be conducted at the fund's surplus apportionment date; and
(ii)be carried out by the board irrespective of the fund's financial position at the surplus apportionment date.
(e)Any surplus utilised improperly shall be increased or decreased with fund return from the effective date of the use until the date of receipt thereof by the fund.[paragraph (e) substituted by section 23(b) of Act 45 of 2013]
(7)At least 75 per cent of the members of the board duly constituted in terms of section 7A must approve the scheme.
(8)[subsection (8) deleted by section 23(c) of Act 45 of 2013]
(9)An apportionment in terms of this section shall be of no force or effect unless—
(a)the scheme, the statutory actuarial valuation as at the surplus apportionment date of the fund, as well as a copy of any other actuarial or other statement taken into account for purposes of the scheme and the report by the person appointed in terms of subsection (3), has been submitted to the registrar;[paragraph (a) substituted by section 23(d) of Act 45 of 2013]
(b)the registrar has been furnished with a certificate signed by the valuator stating—
(i)whether the valuator finds that the process of apportionment complied with this Act; and
(ii)where it was necessary for the board to apply its discretion, whether the exercise of such discretion was not unreasonable taking into account the demands of equity within the bounds of practicality and the circumstances of the particular fund, together with such additional particulars or such special report by the valuator as the registrar may deem necessary for purposes of this subsection;
(c)the registrar has been furnished with such additional report as he or she may require from an independent actuary appointed by him or her on such matters associated with the apportionment of the actuarial surplus as the registrar shall determine and including such information as may be prescribed: Provided that the costs resulting from the appointment of such independent actuary shall be borne by the fund;[paragraph (c) amended by section 23(e) of Act 45 of 2013]
(d)the fund demonstrates that reasonable measures have been taken to inform employers, members and former members, together with any fund to which former members transferred, of the scheme in a manner which is clear and understandable to the members and former members and which gives details of the allocation of the actuarial surplus for the benefit of the various stakeholders, including the amounts of any actuarial surplus which it is intended to credit to the member surplus account and to the employer surplus account, respectively, and the costs of any benefit improvements for members and former members: Provided that—
(i)the manner of communication and the type of information to be included in this communication may be prescribed and such prescription may include a requirement that the person appointed in terms of subsection (3), the independent actuary, if any, and the valuator shall certify that they are satisfied that the communication material is objective and contains sufficient information to enable any stakeholder to judge the reasonableness of the scheme; and
(ii)the communication shall be explicit about how and where any complaint should be lodged;
(e)the employer, members, former members, and any fund to which former members have transferred have had 12 weeks after despatch of the communication in which to complain, in writing, to the board;
(f)the board has considered any objection contemplated in paragraph (e) before submitting the scheme to the registrar;
(g)the principal officer of the fund has furnished the registrar with details of all objections lodged with the board and the actions taken to address such objections;
(h)the registrar is satisfied that the scheme is reasonable and equitable and accords full recognition to the rights and reasonable benefit expectations of existing members and former members in respect of service prior to the surplus apportionment date; and
(i)the registrar has forwarded a certificate to the fund to the effect that the scheme is approved and the requirements of this subsection have been fulfilled.[paragraph (i) substituted by section 23(f) of Act 45 of 2013]
(10)[sebsection (10) deleted by section 23(g) of Act 45 of 2013]
(11)
(a)Where a board is not required in terms of subsection (1)(a) to submit a scheme to the registrar, such board shall submit a nil return, together with such additional particulars or reports by the board or other parties as the registrar may deem necessary.
(b)For purposes of this section "nil return" means a written statement by the board, as may be prescribed, including the investigation, existence and details of improper utilisation of surplus contemplated in subsection (6).
(c)The effective date of the nil return is the surplus apportionment date.
(d)The employer, members, former members, and any fund to which former members have transferred may within 12 weeks after the date of submission of a nil return object to such return in writing to the board, and a copy of the objection must be forwarded by the board to the registrar.
(e)
(i)The board must consider such objections and to the satisfaction of the registrar demonstrate that the objections have been dealt with.
(ii)If the registrar is not satisfied that the objections have been dealt with satisfactorily, the registrar may direct that the nil return be reviewed or a scheme be submitted by the board where the registrar is of the opinion that a scheme is required in terms of this Act.
(f)The nil return shall be submitted to the registrar within 18 months of the fund's surplus apportionment date: Provided that a fund may apply to the registrar in writing to extend the period for such submission.
(g)The costs of submitting a nil return to the registrar shall be borne by the fund.
(h)The registrar may direct the fund to communicate the nil return to members, former members and current employers and may specify the manner in which the communication must take place.
(i)The registrar may prescribe additional requirements for nil returns.
(12)Where the board satisfies the registrar that employers which participate in the fund, on the understanding that their membership, financial position and contribution rates will be determined separately for each employer and communicated to such employer, the registrar may permit such board to apply this section to the actuarial surplus in respect of the members employed by a particular participating employer as if the corresponding membership, assets and liabilities constituted a separate fund.
(13)The registrar may, on application by the board of a fund and subject to such conditions as may be prescribed, withdraw the certificate issued in terms of subsection (9)(i), in which event the fund shall be deemed not to have submitted a scheme in terms of subsection (1).[subsection (13) added by section 23(h) of Act 45 of 2013]
[section 15B inserted by section 4 of Act 39 of 2001 and substituted by section 11 of Act 11 of 2007]

15C. Apportionment of future surplus

(1)The rules may determine any apportionment of actuarial surplus arising in the fund after the surplus apportionment date between the member surplus account, the employer surplus account or directly for the benefit of members and former members subject to the uses specified in section 15D(1).[subsection (1) substituted by section 24(a) of Act 45 of 2013]
(2)If the rules are silent on the apportionment of actuarial surplus arising after the surplus apportionment date, any apportionment between the member surplus account, the employer surplus account or directly for the benefit of members and former members, subject to the uses specified in section 15D(1), shall be determined by the board taking into account the interests of all the stakeholders in the fund: Provided that, notwithstanding anything to the contrary in the rules, neither the employer nor the members may veto such apportionment.[subsection (2) amended by section 24(b) of Act 45 of 2013]
[section 15C inserted by section 4 of Act 39 of 2001]

15D. Utilisation of surplus for benefit of members

(1)Notwithstanding anything to the contrary in the rules of a fund but subject to subsection (2), any credit balance in the member surplus account may only be used by the board to—
(a)improve benefits for members;[paragaraph (a) substituted by section 25 of Act 45 of 2013]
(b)where reasonable and equitable, improve the benefits paid to, or the amounts transferred in respect of, former members who exited the fund subsequent to the surplus apportionment date;[paragraph (b) substituted by section 25 of Act 45 of 2013]
(c)reduce current contributions due from members; or[paragraph (c) substituted by section 25 of Act 45 of 2013]
(d)meet, in full or in part, expenses which would otherwise reduce the proportion of the members’ contributions that are invested for retirement:
Provided that the employer appointed members of the board shall not have a vote in any deliberation over the use of any credit balance in the member surplus account unless the proposal before the board will increase the contribution rate payable by the employer.
(2)The credit balance contemplated in subsection (1) after the apportionment of actuarial surplus as at the surplus apportionment date must be used as specified in the scheme submitted in terms of section 15B(1) if the scheme makes provision for the use of such credit balance.
[section 15D inserted by section 4 of Act 39 of 2001]

15E. Utilisation of surplus for benefit of employer

(1)Notwithstanding anything to the contrary in the rules, a participating employer may require the board to use actuarial surplus allocated to the employer surplus account in terms of sections 15B, 15C and 15F, for use by that employer for any of the following purposes, namely—
(a)funding a contribution holiday;
(b)payment of pensions, or an increase in pensions in course of payment, so as to compensate members for the loss of any subsidy from the employer of their medical costs after retirement;
(c)meeting, in full or in part, expenses which the employer is obliged to pay in terms of the rules of the fund;
(d)improving the benefits payable to all members, or a category of members as defined in the rules, as determined by the employer;
(e)transferring part, or all, of the employer surplus account in terms of subsection (2) to the employer surplus account in another fund where the employer is a participating employer;
(f)on liquidation of the fund in terms of sections 28, or 29, payment in cash to the employer in terms of section 15I;[paragraph (f) amended by section 12(a) of Act 11 of 2007]
(g)in order to avoid retrenchment of a significant proportion of the workforce, payment in cash to the employer in terms of section 15J;[paragraph (g) amended by section 12(a) of Act 11 of 2007 and by section 26(b) of Act 45 of 2013]
(h)transferring part, or all, of the employer surplus account to the member surplus account in the same fund; or[paragraph (h) added by section 12(b) of Act 11 of 2007 and amended by section 26(b) of Act 45 of 2013]
(i)repaying part, or all, of surplus utilised improperly by the employer in terms of section 15B(6).[paragraph (i) added by section 26(b) of Act 45 of 2013]
Provided that the members of the board who have been elected by members of the fund shall not have a vote in any deliberation over the use of any credit balance in the employer surplus account.[subsection (1) amended by section 12(a) of Act 11 of 2007 and by section 26(a) of Act 45 of 2013]
(2)The registrar may approve the transfer of all, or a portion of, the employer surplus account from the fund to the employer surplus account in another fund, if the following conditions are satisfied, namely that—
(a)the employer who has control of the employer surplus account in terms of the rules of the fund has similar control of the employer surplus account in the transferee fund;
(b)employees of the employer are members or former members of the fund to which the transfer is made;
(c)the employer applies to the registrar for approval of the transfer, giving such details and supporting reports as the registrar may require; and
(d)the registrar is satisfied that such transfer is necessary in order to achieve an equitable distribution of the surplus between the funds.
[subsection (2) amended by section 26(c) of Act 45 of 2013]
[section 15E inserted by section 4 of Act 39 of 2001]

15F. Existing employer reserve accounts

(1)On or after the commencement date, the board may apply to the registrar to transfer all or some of the credit balance in an existing reserve account as defined in the rules to the employer surplus account.[subsection (1) substituted by section 13(a) of Act 11 of 2007]
(2)The registrar may approve such transfer if the registrar is satisfied that—
(a)the allocation of actuarial surplus to such account was negotiated between the stakeholders in a manner consistent with the principles underlying sections 15B and 15C; and
(b)the allocation of actuarial surplus to the existing reserve account was reasonable and equitable.
[subsection (2) substituted by section 27 of Act 45 of 2013]
(3)Any remaining portion of the credit balance in an existmg reserve account shall be treated as actuarial surplus to be distributed in terms of section 15B.[subsection (3) substituted by section 13(b) of Act 11 of 2007]
[section 15F inserted by section 4 of Act 39 of 2001]

15G. Right to share in surplus accounts on exit

(1)Notwithstanding anything to the contrary in the rules, members who cease to be members of the fund should receive, as part of their transfer values or benefit payments, a share of any credit balances in the member surplus account, the investment reserve account and such contingency reserve accounts as the board deems appropriate, in the ratio that the liability of the fund in respect of the past service of the members leaving the fund bears to the liability of the fund towards all its members in respect of past service at that date: Provided that the board may use a reasonable alternative if there are sound administrative reasons why such a calculation cannot be performed.
(2)Notwithstanding anything to the contrary in the rules, existing members and former members may not participate in the employer surplus account when they transfer out of a fund or when they become entitled to a benefit, unless the relevant employer so directs.
[section 15G inserted by section 4 of Act 39 of 2001]

15H. Use of contents of any surplus accounts to fund deficits

(1)If a fund has credit balances in the member surplus account or the employer surplus account and the fund is found to have a deficit following an actuarial valuation, including a valuation carried out for the purpose of distributing assets on liquidation of the fund, such credit balances shall be reduced in the same proportion by the amount of the deficit: Provided that no credit balance may be reduced by more than the amount to which the account was in credit.
(2)If the deficit exceeds the credit balances in the member surplus account and the employer surplus account, these credit balances shall be applied in full to reduce the deficit and shall be reduced to zero.
[section 15H inserted by section 4 of Act 39 of 2001]

15I. Application of surplus accounts on liquidation of fund

On liquidation of a fund in terms of section 28 or 29, any credit balances in any reserve accounts, the member surplus account and the employer surplus account shall be applied in the following order of priority:
(a)All credit balances in such accounts may be drawn upon to secure the rights and reasonable benefit expectations of the members participating in the distribution: Provided that the credit balances in any such accounts shall be reduced by the same proportion.
(b)Any remaining credit balances in the member surplus account, any contingency reserve accounts and any surplus which has not been allocated to the member and employer surplus accounts, shall be used for the benefit of the members and former members of the fund, in such manner as the liquidator, acting on the advice of the valuator, shall determine.
(c)Any remaining balance in the employer surplus account shall be paid to the employer unless the employer was liquidated prior to the commencement of the liquidation of the fund, in which case it shall be used in the following order of priority, namely—
(i)to meet contributions deducted from members’ earnings and not paid to the fund;
(ii)to meet contributions due from the employer but not paid to the fund; and
(iii)to be distributed amongst the members at the date of liquidation and such former members as are eligible in terms of the rules to participate in the distribution.
[section 15I inserted by section 4 of Act 39 of 2001]

15J. Use of employer surplus to prevent job losses

(1)A fund may apply to the registrar for permission to pay any credit balance in an employer surplus account to an employer where negotiations in terms of section 189 of the Labour Relations Act, 1995 (Act No. 66 of 1995), have confirmed the need to retrench employees if additional capital is not obtained: Provided that an independent auditor may be required by the fund to certify such need.
(2)The application must be made to the registrar in the prescribed manner.
(3)The registrar may only grant an application, and issue a certificate to the applicant to the effect that the requested payment may take place, if the registrar is satisfied that—
(a)members have had full disclosure of the current financial position of the fund and the proposed distribution to the employer, and the need of the employer for additional capital in order to maintain employment, together with the report of the independent auditor, if any, and any information that members may require to exercise their rights under the Labour Relations Act, 1995 (Act No. 66 of 1995);
(b)members have had a reasonable opportunity to consider the proposal;
(c)at least 75 per cent of the members currently in employment have approved the proposal, in writing; and
(d)negotiations in terms of section 189 of the Labour Relations Act, 1995 (Act No. 66 of 1995), have confirmed the need to retrench more than 10 per cent of the membership of the fund at the previous financial year end if the payment is not made.
[section 15J inserted by section 4 of Act 39 of 2001]

15K. Specialist tribunal

(1)The registrar may appoint a special ad hoc tribunal to make a determination, as set out in this section if—
(a)a fund fails to submit a scheme for the apportionment of actuarial surplus or a nil return in terms of section 15B, within the prescribed period; or
(b)the registrar—
(i)is not satisfied that the scheme submitted by the board in terms of section 15B is reasonable and equitable;
(ii)considers that unresolved complaints require investigation which may lead to a review of such scheme;
(iii)is not satisfied that section 15B(11) has been complied with; or
(iv)does not agree with the result of the investigation contemplated in section 15B(6);
(c)the board requests it;
(d)the person appointed in terms of section 15B(3) requests it; or
(e)the board of the fund submits a nil return to the registrar in terms of section 15B(11) and the registrar is not satisfied that a nil return is justified.
[subsection (1) substituted by section 14 of Act 11 of 2007 and by section 28(a) of Act 45 of 2013]
(2)The tribunal shall consist of at least three members who must all be independent of any stakeholder in the fund, and of whom—
(a)at least one shall be a lawyer;
(b)at least one shall be an actuary; and
(c)at least two have experience in retirement fund financing: Provided that the registrar—
(i)may allow a fund a reasonable opportunity to propose members for the tribunal; and
(ii)must appoint a replacement within a reasonable period of time where a member of a tribunal dies, becomes incapacitated, resigns or the registrar is of the opinion that the member is no longer suitable to hold such position.
[subsection (2) substituted by section 28(a) of Act 45 of 2013]
(3)The tribunal shall make its determination in relation to the apportionment of actuarial surplus within such period as may be determined by the registrar: Provided that—
(a)where the tribunal estimates that the cost contemplated in subsection (12) exceeds the actuarial surplus, the tribunal may resign and the fund must submit a scheme under section 15B(1); or
(b)where the tribunal determines that the fund is not required to submit a scheme in terms of section 15B(1), the tribunal must request the registrar to terminate its appointment and the fund must submit a nil return under section 15B(11).
[subsection (3) substituted by section 28(a) of Act 45 of 2013]
(4)At least two-thirds of the members of the tribunal shall constitute a quorum.[subsection (4) substituted by section 28(a) of Act 45 of 2013]
(5)The tribunal shall elect a chairperson from amongst its members, and inform the registrar of its election, and such chairperson shall have a deliberative vote but no casting vote.[subsection (5) substituted by section 28(a) of Act 45 of 2013]
(6)At least two-thirds of the members of the tribunal must agree to any decision or step taken by the tribunal under this section.[subsection (6) substituted by section 28(a) of Act 45 of 2013]
(6A)The board must submit to the tribunal—
(a)the report on the statutory actuarial valuation of the fund as at the surplus apportionment date;
(b)any other actuarial or other statement that should be taken into account for purposes of the determination; and
(c)any report by the person appointed in terms of section 15B(3), where the report or statement referred to in paragraph (a) or (b) was secured by the board of the fund prior to the appointment of the tribunal: Provided that the registrar must agree with the actuarial surplus quantified by the valuator in the report referred to in paragraph (a) before submission in terms of this subsection.
[subsection (6A) inserted by section 28(b) of Act 45 of 2013]
(6B)
(a)Section 15B, excluding subsections (1), (7), (9) and (11), applies with the changes required by the context to the tribunal and any determination by the tribunal.
(b)For the purposes of paragraph (a), any reference to the board and a scheme in section 15B must be construed as a reference to the tribunal and a determination, respectively.
[subsection (6B) inserted by section 28(b) of Act 45 of 2013]
(6C)The tribunal—
(a)must take reasonable measures to inform stakeholders of its determination in relation to the apportionment of actuarial surplus and must resolve any objections in respect of the determination;
(b)may not duplicate any of the functions in respect of the apportionment of actuarial surplus or the submission of a nil return in terms of section 15B, performed by the board prior to the appointment of the tribunal, unless the tribunal can demonstrate that it was necessary to do so in order to comply with this Act;
(c)may request an additional report from an independent actuary on matters associated with the apportionment of the actuarial surplus if the tribunal deems it necessary; and
(d)must be satisfied that its determination is reasonable and equitable and accords full recognition to the rights and reasonable benefit expectations of members and former members in respect of service prior to the surplus apportionment date.
[subsection (6C) inserted by section 28(b) of Act 45 of 2013]
(7)The tribunal may follow any procedure which it considers appropriate in conducting an investigation, including procedures in an inquisitorial manner, and affording any stakeholder the right to a hearing.
(8)Notwithstanding section 22 of the Financial Services Board Act, 1990 (Act No. 97 of 1990), the tribunal may obtain copies of any document or correspondence contained in the files of the registrar relating to a fund in connection with which the tribunal is conducting an investigation.
(9)
(a)For purposes of an investigation, the tribunal may—
(i)under the hand of the chairperson, summon any person who in the opinion of the tribunal may be able to give material information concerning the subject matter of the investigation or who is believed by the tribunal to have in his or her possession or custody or under his or her control any book, document, record or thing which has any bearing on the subject matter of the investigation, to appear before it at a time and place specified in the summons, to be questioned or to produce that book, document, record or thing, and may retain for inspection any book, document, record or thing so produced; and
(ii)through the chairperson administer an oath to, or accept an affirmation from, any person summoned under subparagraph (i) and question that person and require the person to produce any book, document, record or thing in his or her possession or custody or under his or her control.
(b)A summons referred to in paragraph (a) shall be served in the same manner as a summons for the attendance of a witness at a civil trial in a magistrate's court.
(c)In connection with the questioning of any person summoned under this section or the production by such person of any book, document, record or thing, the law relating to privilege as applicable to a witness summoned to give evidence or to produce a book, document, record or thing in a civil trial before a court of law shall apply.
(d)
(i)Any person summoned in terms of this section or who has given evidence before a tribunal shall be entitled to the same witness fees as if he or she had been summoned to attend or had given evidence at a civil trial in a magistrate's court held at the place where the investigation is held.
(ii)Any fees which may become payable in terms of subparagraph (i) shall be paid by the fund.
(10)The tribunal shall keep, whether in writing or by mechanical or electronic means, a permanent record of the proceedings relating to the determination of a matter before it, including the apportionment of actuarial surplus and any evidence given: Provided that such record shall be passed to the fund and made available to the registrar on request, once the tribunal has completed its determination.[subsection (10) amended by section 28(c) of Act 45 of 2013]
(11)The tribunal must submit its determination to the registrar and to the fund.[subsection (11) substituted by section 28(d) of Act 45 of 2013]
(12)
(a)Any reasonable costs arising from the work or the performance of the functions of the tribunal, including periodical allowances or compensation for personal expenses of the members of the tribunal, shall be recovered from the fund.
(b)Despite the provisions of paragraph (a), the costs must be recovered from the actuarial surplus if the tribunal determines an apportionment of actuarial surplus.
[subsection (12) substituted by section 28(d) of Act 45 of 2013]
(13)Any member of the public may obtain a copy of the record from the registrar on payment of a fee determined by the registrar.
(14)The determination of the tribunal shall be binding on the stakeholders.
(15)The registrar must accept a determination in relation to the apportionment of actuarial surplus as satisfying the requirements of section 15B and forward a certificate to the fund to the effect that section 15B has been complied with, unless the registrar is of the opinion that the tribunal failed to exercise its discretion properly and in good faith.[subsection (15) substituted by section 28(e) of Act 45 of 2013]
[section 15K inserted by section 4 of Act 39 of 2001]

16. Investigations by a valuator

(1)A registered fund shall, once at least in every three years, cause its financial condition to be investigated and reported upon by a valuator, and shall deposit a copy of such a report with the registrar, and shall send a copy of such report or a summary thereof, prepared by the valuator in a form prescribed and signed by the valuator, to every employer participating in the fund.[subsection (1) substituted by section 16(a) of Act 86 of 1984, amended by section 17 of Act 22 of 2008 and substituted by section 29(a) of Act 45 of 2013]
(2)Such investigation shall be made in respect of the position as at the expiration of a financial year, and such report shall be deposited with the registrar within twelve months from the close of that year.
(3)In the case of a fund which is registered on the date of commencement of section 16 of the Financial Institutions Amendment Act, 1984, and which, before that date, has caused its financial condition to be investigated in terms of subsection (1), the first investigation after the said date shall be made in respect of the position as at the expiration of the fifth financial year which is completed after the financial year-end in respect of which the previous investigation was made or as at the expiration of such earlier financial year as the fund may select.[subsection (3) substituted by section 16(b) of Act 86 of 1984]
(3A)In the case of a fund which is registered on the date of commencement of section 16 of the Financial Institutions Amendment Act, 1984, but which has not, before that date, caused its financial position to be investigated in terms of subsection (1), the first investigation shall be made in respect of the position as at the expiration of the third financial year which is completed after that date or as at the expiration of the fifth financial year which is completed after the registration of the fund, whichever date is the earlier, or as at the expiration of such previous financial year as the fund may select.[subsection (3A) inserted by section 16(c) of Act 86 of 1984]
(4)In the case of a fund other than a fund mentioned in sub-section (3) or (3A), the first investigation shall be made in respect of the position as at the expiration of the third financial year which is completed after the date of registration or as at the expiration of such previous financial year as the fund may select.[subsection (4) substituted by section 16(d) of Act 86 of 1984]
(5)Notwithstanding anything contained in the preceding subsections, the registrar may, after not less than one month's notice in writing to any registered fund, require that fund to cause such an investigation to be made in respect of the position as at the expiration of any financial year, if the registrar is of the opinion that an investigation would show that the fund is not in a sound financial condition: Provided that in the case of a fund which is carrying out the terms of a scheme approved by the registrar in terms of section eighteen, the registrar shall not act in accordance with the preceding provisions, unless he is of the opinion that an investigation would show that such scheme is unlikely to accomplish the objects of that section.[subsection (5) amended by section 29(b) of Act 45 of 2013]
(6)
(a)If the rules of a fund provide that the benefits which may become payable to a category of members are subject to the discretion of the board or management of the fund, the registrar shall, on request of the fund, on good cause shown by any officer of the fund or on the initiative of the registrar, determine what amount or scale of benefits is to be taken into consideration for the purpose of the valuation, and such determination by the registrar shall be binding upon the fund.
(b)The fund shall bear any expenses incurred by the registrar in respect of a matter contemplated in paragraph (a).
[subsection (6) substituted by section 29(c) of Act 45 of 2013]
(7)A report in terms of any of the preceding subsections shall include the particulars prescribed.[subsection (7) amended by section 16(e) of Act 86 of 1984, substituted by section 9 of Act 50 of 1986 and by section 23 of Act 83 of 1992 and amended by section 17 of Act 22 of 2008]
(8)Whenever a registered fund deposits with the registrar a copy of a report made by a valuator in terms of this section, it shall also deposit with the registrar a certificate by the board and by the principal officer that to the best of their knowledge and belief the information furnished to the valuator for purposes of the report was correct and complete in every material respect and, where applicable, that a copy of the report or a summary thereof referred to in subsection (1) was sent to every employer participating in the fund.[subsection (8) substituted by section 16(f) of Act 86 of 1984 and amended by section 6 of Act 22 of 1996]
(9)The provisions of section 15(3) in connection with a document relating to the financial position or the revenue or expenditure of a fund referred to therein, shall apply with the necessary changes in respect of a copy of a report deposited with the registrar in terms of subsection (1) of this section and which in the opinion of the registrar—
(a)other than in respect of a report on the valuation of a fund as at its surplus apportionment date, does not correctly reflect its financial condition referred to in the said subsection (1); or
(b)in respect of a report on the valuation of a fund as at its surplus apportionment date, does not correctly reflect its financial condition in subsection (1) or does not fairly take into consideration the interests of one or more of the stakeholders that may be entitled to participate in a scheme in terms of section 15B(1) based on the result of such report.
[subsection (9) added by section 16(g) of Act 86 of 1984 and substituted by section 29(d) of Act 45 of 2013]

17. ***

[section (17) repealed by section 30 of Act 45 of 2013]

18. Fund not in a sound financial condition

(1)If any return under this Act indicates that a registered fund is not in a sound financial condition as determined in accordance with prudential standards, the Authority may, save as provided in section 29, direct the fund to submit a scheme setting out the arrangements which have been made, or which it intends to make, to bring the fund into a financially sound condition within such period, and subject to such conditions, as determined by the Authority.[subsection (1) substituted by section 31 of Act 45 of 2013 and by section 290 of Act 9 of 2017]
(1A)When any return under this Act indicates a deficiency in a registered fund, the fund shall, within three months from the date of such return, submit a scheme to the registrar setting out the arrangements which have been made or which it is intended to make to eliminate the deficiency, together with a report thereon by a valuator.[subsection (1A) inserted by section 10(a) of Act 50 of 1986]
(2)If the registrar finds that a scheme submitted in terms of subsection (1) or (1A) is not inconsistent with the provisions of this Act and is satisfied that the arrangements set out therein should suffice to accomplish the objects of this section, he shall approve the scheme.[subsection (2) substituted by section 10(b) of Act 50 of 1986]
(3)If the registrar is not satisfied regarding the matters referred to in subsection (2), he shall request the fund to make such amendments to the scheme, or to submit such new scheme, as will enable him to be so satisfied, and the fund shall comply with the request within a period prescribed by the registrar, not being less than 30 days from the date of the request, and shall at the same time furnish to the registrar a report on such amendments or such new scheme by the valuator or auditor mentioned in subsections (1) and (1A), and the provisions of subsection (2) shall apply to any such amended scheme or new scheme which the fund may submit.[subsection (3) substituted by section 10(c) of Act 50 of 1986]
(4)The fund shall carry out the terms of any scheme approved by the registrar under this section: Provided that—
(a)the registrar may, if he is satisfied that none of the objects of this section would be thereby prejudiced, permit the said fund to amend such scheme from time to time;
(b)if any return deposited with the registrar during the currency of such scheme in terms of this Act shows, in the opinion of the registrar, that the scheme is unlikely to accomplish the objects of this section, he may withdraw his approval of the scheme, and the fund concerned shall, within three months thereafter, prepare a further scheme, to which the provisions of this section shall apply; and
(c)if any such return shows, in the opinion of the registrar, that the financial condition of the fund is no longer unsound, he shall communicate with the principal officer of the fund to that effect and on receipt of such communication the obligations of the fund in respect of that scheme shall terminate immediately.
(5)
(a)The Authority may at any time, if it is necessary in the interests of the members of a fund, direct that an investigation in terms of section 16 or an audit or both an audit and such investigation be conducted into the financial position of a fund generally or with reference to any financial aspect of the fund.[paragraph (a) substituted by section 290 of Act 9 of 2017]
(b)The costs pertaining to the audit or investigation contemplated in paragraph (a) shall constitute a first charge on the assets of the fund unless otherwise determined by the registrar.
(c)Following the audit or investigation contemplated in paragraph (a) a report must, within the time and in the format stipulated by the registrar, be furnished to the registrar and the board.
[subsection (5) added by section 15 of Act 11 of 2007]

18A. Business rescue

(1)Notwithstanding the provisions of the Companies Act or any other law under which a pension