PENSION AND PROVIDENT FUNDS: SUBSIDIARY LEGISLATION
INDEX TO SUBSIDIARY LEGISLATION
(23rd September, 1988)
ARRANGEMENT OF REGULATIONS
3. Application for a licence
4. License fee
5. Licensing of existing funds
Rules relating to Administration
6. Type of fund to be specified
7. Duties and responsibilities of officers
8. Acting principal officer
9. Settlement of disputes
10. Protection against dishonesty
Rules relating to Membership and Benefits
12. Pensionable income
13. Contributions to a fund
14. Retirement Age
15. Benefits from a fund
16. Commutation of pension
17. Death of member of pension fund or pensioner
18. Death of member of provident fund
19. Death of member of retirement annuity fund
20. Payment of benefits on death
21. Disabled member of pension or provident fund
22. Disabled member of retirement annuity fund
24. Dissolution of fund
25. Amendment of rules
Financial Provisions and Statements
27. Investigation and report of actuary
28. Consideration of methods to make fund financially sound
29. Report on fund
30. Financial statements by funds
31. Auditor's report
32. Cession or pledge of benefits
33. Withholding of benefits in certain circumstances
S.I. 107, 1988,
Act 2, 2007,
S.I. 18, 2007,
S.I. 42, 2008,
S.I. 105, 2008.
Preliminary (regs 1-2)
These Regulations may be cited as the Pension and Provident Funds Regulations.
(1) In these Regulations-
"child", includes an illegitimate child, stepchild or child adopted in accordance with the Adoption of Children Act, or in accordance with any enactment whatsoever, whether within or outside Botswana, relating to the adoption of children;
"dependent", includes a person nominated by a member as being a common law spouse dependent on the member for his or her support;
"forms" means the appropriate form set out in the Schedule;
"pensionable income" means the income of a member of a pension fund or provident fund on which the benefits payable from the fund are to be calculated, whether referred to as pensionable income, pensionable salary or salary or any similar term considered by the Registrar to be suitable;
"retirement annuity fund" means a fund established to purchase a pension to be paid to its members in the form of an annuity upon their retirement.
(2) Any reference in these regulations to a "widow" shall, unless otherwise expressly stated, be understood to include a widower.
Licensing (regs 3-5)
(1) Except as otherwise provided in subregulation (2), an application in terms of subsection (1) of section 5 of the Act for-
(b) the registration of a fund shall be made in Form No. 2.
(2) An application referred to in subregulation (1) shall be accompanied by-
(a) the relevant enclosures required by the appropriate form; and
(b) the appropriate fee prescribed in regulation 4.
(2) The fee for the licensing of a fund shall be P100.
An existing fund shall submit to the Registrar, within three months of the appointed day, a return in Form No. 2 duly completed and signed by the principal officer.
Rules relating to Administration (regs 6-10)
The name and rules of a fund shall accurately state the purpose for which it was established.
The rules of a fund shall make provision for the functions, powers, duties and areas of responsibility of every director, manager, controller, principal officer and, where the fund is a trust fund, the trustees.
The rules of a fund shall provide that if the principal officer is for any reason unable to discharge any duties imposed upon him by or under the Act for a period of one month or more, an acting principal officer shall be appointed.
The rules of a fund shall provide for the manner in which any dispute between the fund and any member or any person whose claim is derived from a member shall be settled.
The rules of a fund shall require the fund to protect itself against dishonesty on the part of any of its directors, managers, controllers, principal officers or trustees either by way of a guarantee from the participating employer or by way of insurance of such amount as the principal officer deems adequate.
Rules relating to Membership and Benefits (regs 11-25)
The rules of a pension fund or provident fund shall-
(a) define each category of persons eligible to become members of the fund; and
(b) not contain any provision the effect of which would be to render admission to membership subject to a discretion in any person other than the person seeking membership.
The rules of a fund shall, where relevant, define the pensionable income applicable in relation to each category of members which-
(a) shall include the basic income, salary or wage payable to the member; and
(b) may include the whole or part of any regular contractual commission or bonus payable to the member and of any other allowance considered by the Registrar to be suitable for inclusion.
(1) The rules of a fund shall-
(a) if they require a member to make compulsory contributions to the fund, specify the rate of contributions which shall be expressed as a percentage of his pensionable income or, where it is not related to income, set out in a scale;
(b) if they require a participating employer to make compulsory contributions to the fund, specify the basis of calculating contributions;
(c) where a participating employer deducts the contributions of a member from his remuneration, pay to the fund that contribution, and the corresponding contribution referred to in paragraph (b), within 21 days from the end of the calendar month in respect of which the contributions are payable;
(d) provide that if a participating employer fails to make the payment required in terms of paragraph (c), the principal officer shall report the failure to the Registrar forthwith;
(e) provide for the acceptance of sums without a maximum which are transferred to the fund by the appropriate principal officer on the instructions or at the request of a member from another fund:
Provided that a fund shall not be required to comply with this paragraph if the fund is not a fund the membership of which is not a condition or benefit of his terms of employment with a participating employer.
(2) The rules of a fund may provide that-
(a) a member shall be permitted to make additional voluntary contributions to the fund, in which case the maximum amount payable in each period shall be specified and it shall be stated whether the continuation of such voluntary contributions may be revoked by the member;
(b) if the pensionable income of a member is reduced, he may elect to contribute to the fund at an increased rate so that his contributions are not greater than they would have been if his pensionable income had not been reduced:
Provided that where the rules require a participating employer to make compulsory contributions the rules shall provide that it shall be subject to the consent of his employer;
(c) a participating employer may make a special contribution to the fund in order to make or keep it financially sound.
(1) The rules of a fund shall specify the normal retirement age for each category of member.
(2) The rules of a fund may provide for the early retirement or late retirement of a member.
(1) Subject to the provisions of this regulation, the rules of a fund shall-
(a) specify the amount of and the method of calculation of every benefit payable from the fund;
(b) not provide for differential rates of benefits within each category; and
(c) not permit a member to participate in only part of the benefits unless he is subject to a medical restriction imposed in terms of the rules.
(2) The rules of a fund shall not empower any directors, managers, controllers, principal officers and, where the fund is a trust fund, any trustees or any other person to have any discretion in determining the amount of any benefit, subject to the following exceptions-
(a) the rules may provide that in the case of an employee who leaves the employment of a participating employer, the whole or part of the employer's contributions, with or without interest be applied for the benefit of the member;
(b) the rules may authorise the principal officer of a fund to exercise his discretion in the following circumstances-
(i) the apportionment of a lump sum benefit amongst dependants,
(ii) the apportionment of a pension amongst qualifying widows, children and dependants,
(iii) the reinstatement of a widow or widower's pension that has ceased on re-marriage;
(c) the rules may provide for the transfer to or receipt from another fund of the benefits of a member:
Provided that no provision may be so made for the transfer of such benefits from a pension fund to a provident fund or the receipt of such benefits by a provident fund from a pension fund;
(d) the rules may provide for any variation of the benefits due to or in respect of a member not elsewhere provided for in this paragraph if such variation is approved by the Registrar.
(3) In the event of a member withdrawing from a fund prior to his retirement under the rules of the fund, he shall not be entitled to a refund of more than his own contributions with simple interest thereon at the rate of not less than two per cent per annum.
(1) Subject to the provisions of subregulations (2) the rules of a pension fund may provide for the commutation of a pension which is paid to a member on retirement or to a former member or to the widow or children or dependants of a member or former member as follows-
(a) if the pension does not exceed P500 per annum, the fund may commute the whole or part of the pension for a lump sum;
(b) if the pension exceeds P500 per annum, the fund may commute for a lump sum such portion, not exceeding one third, of the pension as is elected;
(c) the un-commuted portion of a pension which is payable-
(i) to a member on retirement or to a former member, shall be payable for his lifetime or the period for which payment is guaranteed in the rules, whichever is the longer,
(ii) to a widow or dependant, shall be payable for her lifetime or for the period for which payment is guaranteed in the rules, whichever is the longer or, if the rules provide that the pension ceases on re-marriage, until she re-marries,
(iii) to a child, shall be payable for his lifetime or until he attains a specified age, being not less than 18 years, or marries, whichever occurs first.
(2) The provisions of subregulation (1) shall not apply to a member who retires from a retirement annuity fund and who has previously retired from the same or another retirement annuity fund.
(1) The rules of a pension fund may provide-
(a) that a capital sum not exceeding four times the annual pensionable income may be paid on the death of a member who dies before his retirement;
(b) that a capital sum not exceeding four times his annual pension may be paid on the death of a pensioner.
(2) The sum referred to in subregulation (1) may be paid into the estate of the member or pensioner as the case may be.
(3) The payment of any sum referred to in subregulation (1) shall not affect the liability of the fund in respect of any pension payable to the widow, children or dependants of the member or pensioner concerned.
The rules of a provident fund shall not provide for the payment on the death of a member of a capital sum that is greater than the amount that would have been payable to the member had he retired from the fund on the date of his death.
(1) The rules of a retirement annuity fund shall not provide for the payment on the death of a member of a benefit that is greater in capital value than 20 times the total contributions made in respect of that member in the preceding 12 months by him and his employer.
(2) The payment of the sum referred to in subregulation (1) shall not affect the liability of the fund in respect of any pension payable to the widow, children or dependants of the member.
(1) The rules of a fund-
(a) shall not authorise the payment on the death of a member or pensioner who leaves one or more dependants of any benefit to a person who is not a dependant;
(b) may provide that on the death of a member or pensioner who does not leave any dependant the benefits shall be payable to his estate.
(2) The rules of a pension fund or provident fund may provide for a member to nominate, as a guide to the fund, one or more dependants to receive any benefits payable from the fund on the death of the member.
(1) The rules of a pension or provident fund may provide that a member be permitted to retire before attaining retirement age if satisfactory medical evidence is submitted to the fund showing that he is permanently incapable of performing his normal gainful employment or any similar employment or any other occupation for which he is reasonably suited by education, training or experience.
(2) Where the rules of a provident fund make provisions such as is referred to in subregulation (1), they shall not provide for the payment of a benefit which exceeds the amount that the member would have received on attaining the age of retirement.
(1) The rules of a retirement annuity fund may provide that a member may be permitted to retire on the production to the fund of satisfactory medical evidence that he is incapable of performing his normal employment.
(2) Where the rules of a retirement annuity fund make provision such as referred to in subregulation (1), they shall not provide for the payment of a benefit which exceeds the value of the benefit referred to in regulation 19 and such benefit shall be paid as an annuity payable during the lifetime of the member or the surviving spouse where a joint pension has been elected.
(1) The rules of a fund which is required to comply with the provisions of subsection (1) of section 16 of the Act shall specify the manner in which any surplus disclosed by an investigation in terms of that subsection shall be applied.
(2) A surplus referred to in subregulation (1)-
(a) shall not be applied, in whole or in part, as a refund of contributions to a member or a participating employer;
(b) may be applied to improve benefits or to be offset against future contributions.
(3) Any surplus which arises other than as provided in subregulation (1) shall be dealt with in terms of the rules of the fund but no part of such surplus shall be refunded to a member or participating employer.
(1) The rules of a fund shall specify in what circumstances and the manner in which the fund shall be dissolved in terms of subsection (1) of section 10 of the Act and shall provide for the appointment of a liquidator.
(2) The rules of a fund may provide that when the fund is dissolved-
(a) if it is not possible, after all reasonable efforts have been made, to trace a member to whom an amount is payable from the fund, that amount shall, after a specified period, be deposited with the Registrar of the High Court to the credit of that member or his estate as the case may be;
(b) if there remains a surplus after all payments and provisions for payments that are required have been made, the surplus may be distributed to the members, paid to the participating employers or otherwise disposed of to the satisfaction of the Registrar.
The rules of a fund shall specify the procedure for any amendment or repeal and replacement of the rules.
Financial Provisions and Statements (regs 26-31)
A fund which is required to comply with the provisions of subsection (1) of section 16 of the Act shall keep such records as are necessary to enable the actuary to make an investigation in terms of that section at any time.
(1) The investigation and report in terms of subsection (1) of section 16 of the Act shall be conducted and made at least once every three years as at the end of a financial year or, if so required or permitted by the Registrar, as at any other date.
(2) A licensed fund shall submit to the Registrar with the report following on the investigation-
(a) a certificate signed by the principal officer that to the best of his knowledge and belief the information furnished to the actuary or person conducting the investigation for the purposes of his investigation was correct and complete in every material respect; and
(b) a certificate signed by the principal officer that every participating employer has been given details of all amounts paid by an insurer to any agent or broker in respect of the fund since the appointed day or the last investigation in terms of section 16 of the Act, as the case may be.
(3) In the case of an existing fund, the first investigation referred to in subregulation (1) shall be made-
(a) as at the end of the financial year that commences first after the appointed day or, if that fund so elects, the financial year during which the appointed day falls; or
(b) if a date other than the end of the financial year has been fixed in terms of subregulation (1), as at the date so fixed:
Provided that an existing fund may, with the written permission of the Registrar, defer the investigation in terms of this subregulation for such period, not exceeding three years, as the Registrar may authorise.
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