The FSC was given the mandate, pursuant to the Pensions Act, to regulate and supervise the pensions industry. This mandate includes the approval and registration of approved superannuation funds, retirement schemes, trustees and responsible officers; and the licensing of administrators and investment managers. The FSC provides these and other regulatory services in order to protect pension plan beneficiaries as well as to support a healthy and stable pension industry. The FSC is also charged with responsibility to promote compliance with provisions of the Pensions Act and the attendant Regulations.
A critical component in building a stable industry and protecting pension plan beneficiaries is ensuring that trustees and their agents, such as administrators and investment managers, operate in an ethical manner by faithfully discharging their fiduciary and other responsibilities. It is for this reason that the FSC, with the approval of the Minister of Finance, promulgated four (4) sets of regulations namely the:
- The Pensions (Superannuation Funds and Retirement Schemes) (Registration, Licensing And Reporting) Regulations (“Registration, Licensing and Reporting Regulations”);
- The Pensions (Superannuation Funds and Retirement Schemes) (Governance) Regulations (“Governance Regulations”);
- The Pensions (Superannuation Funds and Retirement Schemes) (Investment) Regulations (“Investment Regulations”); and
- Pensions (Superannuation Funds and Retirement Schemes) (Specified Pension Fund And Specified Pension Schemes) Regulations (“Specified Plans Regulations”).
Status of Pensions Phase II Reform
Phase II of the Pension Reform seeks to incorporate in the Pensions Act and Regulations, all matters that were identified in the White Paper but were not addressed as part of Phase I of the reform. During this phase, focus will be placed on issues such as vesting, locking-in and portability, among other things. The regulatory framework for approved retirement schemes will also be dealt with in Phase II. Included in this phase, is the proposed promulgation of additional regulations, such as:
- Winding-Up – aims to provide procedural guidelines to trustees for the winding up of approved superannuation funds or retirement schemes.
- Conduct of Business–aims to deal with conduct of business issues for retirement schemes.
- Funding and Solvency – aims to provide guidance on actuarial valuation and to ensure that defined benefits (DB) superannuation funds are adequately funded by the sponsor and that solvency is maintained to facilitate payment of promised benefits.
In proposing amendments to the regulations, the FSC solicited comments and feedback from industry stakeholders. The proposed amendments are therefore the result of extensive consultations between the FSC and key industry stakeholders. The outcome of these consultations, along with discussion papers from the FSC and other interest groups, resulted in a concept paper that was sent to the Ministry of Finance and Planning.