The Financial Services Board will try to nudge small, employer-sponsored funds into umbrella funds — but if that fails, the regulator will consider “a much more blunt instrument”, Olano Makhubela, the deputy executive registrar for retirement funds at the FSB, told the recent Pension Lawyers Association conference in Cape Town.
National Treasury has instructed the FSB to reduce the more than 1,650 active retirement funds to less than 200.
Makhubela said it may mean policy makers would have to prescribe the number of members and assets under management that funds needed to have to be viable.
He also said the FSB was looking to improving its monitoring of retirement funds by requesting funds to submit monthly cash flow statements that could provide an early warning system by enabling the FSB to detect problematic changes at an early stage.
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