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South Africa: Another step closer to the implementation of the two-pot retirement system: FSCA Communication

16 February 2024
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Overview

  • The Financial Sector Conduct Authority published the requirements for rule amendments to be submitted by retirement funds to give effect to the two-component retirement system (or more colloquially known as the ‘two-pot system’) in its FSCA Communication 3 of 2023 (RF) earlier today (16 February 2024). The Communication also outlines the approach the FSCA will be taking when considering applications submitted by retirement funds.

The Financial Sector Conduct Authority (FSCA) published the requirements for rule amendments to be submitted by retirement funds to give effect to the two-component retirement system (or more colloquially known as the ‘two-pot system’) in its FSCA Communication 3 of 2023 (RF) (Communication) earlier today (16 February 2024).  The Communication also outlines the approach the FSCA will be taking when considering applications submitted by retirement funds.

The FSCA advised that all retirement funds, save for a few exceptions as set out in the Communication, are expected to communicate the proposed two-pot legislative changes to members in a manner that is ‘simple, clear and comprehensive’ and that these communications must be made timeously and regularly. The FSCA also advised that it may request a copy of the communication issued by retirement funds or administrators.

In the interest of considering applications for the approval of rule amendments expeditiously, the FSCA requested that the rule amendments be limited to those referred to in the Communication.

In respect of transitional arrangements, the FSCA advised that where applicable, retirement funds may apply for extension of time in terms of section 279 of the Financial Sector Regulation Act, 2017.

A copy of the Communication can be accessed here.

Some exciting news:  The template rule amendments necessary to implement the two-pot system, in line with the Communication, as well as other key information to assist with ensuring that retirement funds will be ready to implement the two-pot system, will be made available shortly as part of Bowmans’ Two-Pot Readiness Pack. Look out for further communications in this regard.