On 27 January 2023, the Minister of Finance repealed Regulation 33. This is  a regulation published in terms of the Pension Funds Act 24 of 1956 (PFA).

Regulation 33 is replaced by the Conduct Standard, which takes effect on 20 February 2023.

As outlined in the previous alert, Regulation 33 sets out requirements relating to the payment of pension fund contributions by employers to pension funds in terms of section 13A (2) of the PFA. The Conduct Standard sets out requirements related to the payment of pension fund contributions which mirror those contained in Regulation 33, as well as additional measures to remedy shortcomings in Regulation 33.

Some important aspects of the Conduct Standard are:

Employer’s obligations and duties

One of the major changes brought by the Conduct Standard is the obligation on retirement funds to notify every employer that intends to join the fund of their duties, obligations and liability under section 13A of the PFA and the Conduct Standard. The retirements funds are required to do this on an annual basis.

Employer’s arrear contributions

Retirement funds will also be required to recover arrear contributions from participating employers. The Conduct Standard allows for this function to be outsourced to an attorney or third party. Trustees will therefore be required to formulate policies and procedures to account for this process. This is positive.

Conclusion

Trustees of Funds should ensure that the rules are in line with the Conduct Standard.

Employer’s data collection obligations

The Conduct Standard provides for an employer’s obligation to provide a retirement fund with information regarding contributions collected and paid over to retirement funds on behalf of its employees. This must be accompanied by a declaration from the employer stating that the information provided is a true and correct reflection of contributions required to be paid to the retirement fund. 

It is anticipated that the Conduct Standard will assist in eradicating employer non-compliance with their obligations as outlined in the PFA. This, however, will only be achieved through the collaboration of all the relevant stakeholders as well as strict compliance and application of the Conduct Standard.