The Financial Sector Conduct Authority has called for retirement funds to urgently submit rule amendments that can alleviate the financial difficulties faced by distressed employers and members during the coronavirus crisis.
In a statement issued on Friday morning, the regulator said it had released communication to the industry to provide guidance for both distressed employers and funds.
The pandemic could impact employers’ and members’ ability to comply with full, partial or even any payment of contributions, the FSCA warned.
It said most funds did have existing relevant rules for distressed employers and members. These could include a provision for paid or unpaid temporary absence from work; a break in service; a postponement of contribution payments and/ or a reduction of pensionable service, where employees may be working reduced hours
“[W]e encourage them to apply these rules to alleviate the financial difficulties they may be facing,” the regulator said.
However, it added, many funds do not yet have such rules in place, and called for these funds to submit amendments “urgently”. The document providing guidelines can accessed online.
The FSCA has been in consultation with the South African Revenue Service and the income tax approval status of the retirement funds will not be jeopardised, it added.
This intervention forms part of efforts to reduce the impact of the Covid-19 pandemic on financial customers, regulated entities and the SA economies.