Media Briefing: Commencement of the Retirement Funds Act 2022 and the Non-Bank Financial Institutions Tribunal
The Ministry of Finance held a media briefing on October 31, 2022 to update members of the public about the commencement of the Retirement Funds Act 2022 and the commencement of the operations of the Non-Bank Financial Institutions Tribunal (NBFIT).
Speaking about the commencement of the Act on October 14, 2022, Ms. Patrinah Masalela, Director Insurance and Pensions at the Ministry of Finance informed the media that the new Act is applicable to all occupational and private pension funds. She stated that the purpose of a pension is to provide income security to a member upon retirement, when they are no longer employed or earning a salary or may not be physically capable of economically providing for themselves. She implored pension members to be mindful of their income security and, therefore, try to avoid withdrawing the maximum allowable limits of their benefits unless their circumstances really require them to do so and they do not have any other options. Ms. Masalela clarified that the revised deductions from pension benefits and the withdrawal limit for retiring members have been increased from one-third to 50 percent under the new Act. This limit only applies to pension members who will retire following the commencement of the new Act.
For his part, Mr. Phineas Sesinyi, Acting Director of Retirement Funds at the Non-Bank Financial Institutions Regulatory Authority unpacked Section 52 of the new Act which contains the provisions relating to deductions from members’ benefits. He indicated that in light of the prevailing economic situation and the impact of Covid-19, the priority was to provide some financial relief particularly to deferred members. Deferred members are defined as pension fund members who for a variety of reasons no longer contribute to the fund but still have their benefits preserved and have not reached retirement age.
Mr. Sesinyi further stated that enhanced access to benefits is not automatic as the Board of Trustees still remain responsible for assessing all requests in line with prescribed criteria that are required to be met. In closing he noted that public education about the new Act will continue to be undertaken by all relevant parties including the Ministry of Finance, the Regulatory Authority and the industry.
Ms. Masalela also informed the media that the Non-Bank Financial Institutions Tribunal (NBFIT) commenced its operations on October 10, 2022 and its objective is to review decisions taken by the Regulatory Authority and any Self-Regulatory Organisation (SRO). She added that this development will enhance the efficiency of addressing complaints within the Non-Bank Financial Institutions (NBFI) sector.
For his part Mr. Thuto Senwedi, the Secretary of NBFIT outlined that NBFIT is an independent body that will make its decisions impartially. NBFIT may confirm, amend or reject a decision made by the Regulatory Authority or an SRO. He added that NBFIT also has the powers to review a decision made by the Regulatory Authority or an SRO that affects the NBFI sector as a whole, even if it has not received an application for the review of that decision. He encouraged members of the public to utilise NBFIT without any reservations.
