Today's Labour News

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retirementBusiness Times reports that amendments to the Pension Funds Act have just come into force, aimed at helping investors ensure they retire with enough money, but many funds have failed to meet the deadline to enact the changes.  

The default regulations, as they are called, are the culmination of efforts by Treasury to ensure that retirees get cheaper retirement products, more education on preserving their savings and counselling on what products to buy when they retire.  But, many funds are not ready to implement new regulations under the Act and have applied for exemptions.  The regulations, which came into force at the beginning of March, oblige funds to establish (1) a default investment option for savings; (2) a default option for preserving savings if an employee changes employers before retiring and the ability to move savings to the new employer's fund; and (3) a default pension that can be opted into upon retirement.  Despite having had 18 months to put these measures in place, many funds failed to meet the deadline, with 541 funds (out of some 1,700 active funds) wanting exemptions from the provisions.  Naheem Essop of the Financial Sector Conduct Authority (FSCA) told the Pension Lawyers Association conference last week that it was neither reasonable nor responsible for funds to wait until the last minute to implement the regulations (in February, the FSCA received 451 applications and, of these, 318 were lodged in the last week of February and 154 on the last day).  

  • Read the original Devlin Brown’s informative report on this subject at BusinessLive

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