Recent legislative and regulatory developments in South Africa affect long-term insurance, protection of personal data, and pension fund default investments.
─ Requirements of default investment portfolios (Regulation 37)
─ Default preservation and portability (Regulation 38)
─ Requirements for an annuity strategy (Regulation 39)
If fund rules permit, participating employers can choose the default investment portfolio for their employees (this is of particular relevance to umbrella funds). However, the ultimate decision on the range of investment portfolios that the employers may choose from and their appropriateness remains with fund trustees.
Where funds have only one default investment portfolio, that portfolio is considered the default investment portfolio and must meet the requirements of Regulation 37.
An existing default investment portfolio that doesn’t comply with the default regulations will no longer qualify as a default investment portfolio from 1 Mar 2019. “Grandfathering” won’t be permitted for noncompliant default portfolios.