Changes to process for considering section 14 transfer applications

The FSCA will host a webinar on Monday, 30 January, to demonstrate changes to the online process to obtain approval for retirement benefit transfers. The changes come into effect on 1 February.

The changes will enable the Authority to expedite the consideration of section 14 applications, resulting in faster turnaround times, the FSCA said in a communication published on 23 January.

Section 14(1) of the Pension Funds Act requires that, subject to sub-section (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 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, including a copy of every actuarial or other statement take 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.”

What are the changes?

The FSCA said the following enhancements will be made to the online submission system:

• • Additional fields will alert applicants to any inaccuracies, helping to avoid delays in the approval of applications.
  • Applicants will be provided with a checklist of all the required information and documents, to ensure that these are not missing.
  • Applicants will be able to indicate on the application whether the transfer is a full or partial transfer, so that the minimum requirements can be confirmed upfront.
  • Applicants will be able to capture multiple participating employers, so that the correct service fee is charged upfront, and the certificate reflects the correct name/s of the participating employer/s.
  • Applicants will be able to select the correct transfer type, so they are aware of the relevant documents/information.
  • Applicants will be made aware of the turnaround times for accepted applications so that they can plan their follow-up activities.
  • Applicants will be able to select single or multiple effective date/s so that the correct service fee is charged upfront.
  • When selecting a transfer to an insurer or foreign fund, the transferee fund’s fields will be disabled on the system and there will be no requirement to capture the transferee fund’s details.
  • The administrators linked to the transferor and transferee funds should be able to view and/or download a list of all section 14 applications and the audit trail/lifecycle of their status changes. This will give them the status of the application on demand and obviate the need to email queries to the FSCA.
  • Applicants will be able to ascertain the mandatory documents and other requirements, which will allow for the successful submission of an application. The mandatory documents and requirements are:
    • Cover letter;
    • Prescribed transfer application forms;
    • Member communication (if applicable);
    • Trustee registers;
    • In the case of a full transfer, the transferor fund’s valuation reports must be up-to-date;
    • The status of the funds must be active; and
    • The status of the participating employer must be active.

• Applicants will complete a checklist that validates the basic requirements of a transfer
  type. An unsuccessful validation will result in the automatic rejection of the submission.

Webinar registration

The free webinar will take place between 10am and 11.30am on Microsoft Teams.

Click here to register.

For more information, contact Ms Corlia Buitendag at cornelia.buitendag@fsca.co.za.