Board and minister to work together
Much of the reform of retirement funds will be done by notices and directives issued by the Financial Services Board (FSB) rather than amendments to legislation.
Rosemary Hunter, the FSB’s deputy executive in charge of retirement funds, says that in 2008, many of the powers the Minister of Finance had to prescribe standards for retirement funds and administrators were transferred to the FSB. But the minister has retained some powers. So it is important that her team and the minister’s retirement reform team regularly consult each other to ensure that the reform measures that each might want to adopt are in harmony.
In his recent medium-term budget speech, Finance Minister Pravin Gordhan made a passing reference to retirement reform without spelling out details.
He said financial sector reforms are now in the implementation phase, with the “twin peaks” legislation to establish two new regulatory authorities (the FSB to regulate market conduct and the Reserve Bank to ensure the financial soundness of the sector) to be submitted to cabinet shortly.
“The retirement reform programme is also progressing, with the consultation process on retirement fund costs at its final stage. Draft regulations will soon be released,” Gordhan said.