Lize de la Harpe, Senior Legal Advisor, Sanlam Corporate

The deadline for trustees to complete the Trustee Toolkit has passed.

To evaluate whether trustees met this deadline, and whether or not to proceed with regulatory action in instances of non-compliance, the FSCA requires up-to-date regulatory information on board members of retirement funds.

On 09 October 2024 the FSCA accordingly published FSCA Information Request 3 of 2024 (RF): Request for information in respect of board members of retirement funds.

Minimum skills and training for Board members

Due to the fiduciary nature of their position, it is critical that a board of trustees has the appropriate qualifications and experience to deal with the complexities surrounding pension funds.

Section 7A(3) of the Pension Funds Act, 1956 provides that Board members must attain such levels of skills and training as may be prescribed by the FSCA, within six months from the date of their appointment. Board members are also required to retain the prescribed levels of skills and training throughout their term of appointment.

Trustee Toolkit

In July 2020 the FSCA issued Conduct Standard 4 of 2020 which set out the requirements for minimum skills and training for Board members. It confirmed that attaining the certification of the Trustee Training Toolkit will serve as the minimum skills and training requirement for trustees as contemplated in section 7A(3).

Prior to this Conduct Standard the completion of the FSCA’s Trustee Training Toolkit was voluntary. It was also very basic in content. From July 2020 the completion of the trustee toolkit is compulsory.

On 26 September 2023 the FSCA published Communication 25 of 2023 introducing the updated the trustee toolkit which included 11 of the 22 modules. Retirement Fund (RF) Notice 21 of 2023 set out the timelines for completion of the first 11 modules (phase 1).

In March 2024 the FSCA rolled out phase 2 of the Trustee Training Toolkit comprising the last 11 modules.

Existing Board members had until 30 September 2024 to complete all 22 modules.

The FSCA emphasised that non-compliance would result in regulatory action being taken against uncooperative trustees.

At the recently held IRFA conference, the FSCA confirmed that the completion rate of the Trustee Toolkit as at 2 October 2024 (against those who have registered) is 80% for phase 1 and 84% for phase 2.

Information Request 3 of 2024 (RF)

The purpose of this Information Request is to obtain the necessary and up-to-date information to enable the Authority to take appropriate regulatory action against non-compliant trustees.

It is the Authority’s intention to publish a list of non-compliant trustees’ names following receipt of the requested information as a first step.

Conclusion

The deadline for submission is 6 November 2024. It is important for Boards to note that any failure to provide the specified information by or within the timeframe specified constitutes an offence under section 37 of the Pension Funds Act and section 267 of the Financial Sector Regulations Act, 2017.

You can read the full request here.

ENDS