In November last year, the FSCA published a draft exemption designed to make it easier for retirement funds to get an exemption from the full liquidation process when the participating employer withdraws from the fund.
The Authority said it wanted to exempt retirement funds from having to meet the conditions set out in paragraphs 9.2(a) and 9.2(b) of Board Notice 75 of 2009. This board notice provides retirement funds and liquidators with guidance on the information the FSCA requires when a fund is liquidated or partially liquidated.
The proposals effected two key changes to the conditions that have to be met before the FSCA would consider granting an exemption from section 28 of the Pension Funds Act, which sets out the procedures for the voluntary winding up of a fund:
- Funds could be exempted from the requirement that the average benefit per member had to be less than R50 000 (paragraph 9.2(a)); and
- The fund or the participating employer did not have more than 100 members – an increase from 50 (paragraph 9.2(b)).
The FSCA invited stakeholders to comment on the draft exemption by 14 December.
In a communication published on 31 January, the Authority said only one stakeholder submitted comments, and no fundamental concerns or issues were raised with granting the proposed exemption or the related conditions. The FSCA said it responded, in detail, directly to the commentator.
The Authority said only minor drafting improvements and changes have been effected to the exemption notice since it was published in draft form.
Click here to download RF Notice 5 of 2023.
The exemption applies to funds that apply to the FSCA for an exemption from paragraph 9.2(a) and/or paragraph 9.2(b) from 1 February 2023.
The Authority confirmed that that Form D, as referred to in paragraph 9.3(a) of the Board Notice, will not be revised to refer to a specific request for an exemption from paragraphs 9.2(a) or 9.2(b).
Any applicant fund that intends to rely on the exemption must, alongside Form D, submit a cover letter confirming reliance on the exemption notice, together with a specific request to be exempted from paragraph 9.2(a) and/or 9.2(b) in accordance with paragraph 2(a) of the exemption notice.
