FSB proposes sweeping changes to pension fund rules

Deputy executive officer for retirement funds Jurgen Boyd, is quoted in a Business Day report as saying he had sent out a circular to pension funds proposing that all boards of trustees should establish a code of conduct outlining their duties and obligations, a fund-specific investment policy statement and a communication strategy to members. In addition, all retirement funds should introduce a performance appraisal system for their trustees, which would be reviewed annually and subjected to regulatory inspections, he said. Boyd added it had been recommended that board members should receive comprehensive training and maintain an up-to-date understanding of risk management, investment risks and strategies, benefit structures, legal issues, regulatory and compliance requirements, taxation, actuarial and reform issues. Boyd said while pension funds might, in terms of the Pension Funds Act, engage experts where trustees did not have the required skills, trustees should, however, ensure the quality and independence of the advice given. There was also a need for a risk management policy for each retirement fund, where the trustees identified all risks facing the fund and listed controls and monitory procedures for those risks. Full Business Day report