Inactive retirement funds closed down
The number of retirement funds in South Africa has been slashed in five years, from more than 13 500 to 5 963 – and the regulator, the Financial Services Board (FSB), is proud of this achievement.
The reason for the reduction – and more than 3 000 retirement funds still face the chopping block – is that the funds had become inactive, with no members, assets or liabilities. Nevertheless, the FSB was obliged to demand annual returns from these funds. The sponsors and administrators of the funds had simply failed to close them down properly and notify the FSB.
Jurgen Boyd, FSB deputy executive in charge of retirement funds, says that by the time the clean-up exercise is finished, about 2 500 registered retirement funds should be left on its books.
This month, the FSB gazetted for the closure of 1 267 stand-alone retirement funds and 2 082 participating employer funds (which were members of umbrella funds).
Boyd says the big clean-up operation is being conducted with the assistance of retirement fund administration companies.
After the most recent delisting of funds, there are 5 963 funds left on the FSB’s books, of which 470 are in the process of liquidation and a further 3 058 have been identified for extinction, leaving 2 435 funds.