Retirement Funds

REGULATION AND SUPERVISION OF RETIREMENT FUNDS

The Retirement Funds Department is responsible for the regulation and supervision of the entities in the retirement funds industry in Botswana. Supervisory activities include issuing licenses, conducting surveillance of business operations, consumer protection and applying enforcement action against entities who fail to comply to the regulatory framework for the industry.

Retirement Fund Industry Players

Regulatory Framework

Pension Funds
Provident Funds
Fund Administrators

NBFIRA Act (2016)
Retirement Funds Act (2022)
Retirement Funds Regulations (2016)
Part IV of the Income Tax Act
Pension Administrative Rules (2012)

COMMENCEMENT OF THE RETIREMENT FUNDS ACT (2022)

The Retirement Funds Act 2022 (“the Act”) commenced on the October 14, 2022. The Act repeals and replaces the previous Retirement Funds Act (2014). Associated Regulations are currently being developed and stakeholders will be informed in due course. The existing Rules and Guidelines remain applicable as far as they are consistent with the provisions of the Act.

The main changes introduced by the Act pertain to:

Expanding and strengthening the Authority’s regulatory oversight powers;
Improving Governance of Pension Funds to enhance professionalism;
Strengthening Pension Fund Administration regulation and supervision;
Changes in early withdrawals of accrued pension benefits by members, subject to qualifying conditions..

Note some of the key changes and requirements under the Act, the implementation, and timelines for the following provisions.

Retirement Funds Act	Retirement Funds Act and Chapeau	Transition Period	Comments

Part III -Governance of Funds and Fund Administrators
Section 14	Board of Trustees	Within six months	The board shall have seven or 11 trustees, except where the Regulatory Authority has approved otherwise provided that one shall be a representative of pensioners and at least two shall be independent trustees
Section 19	Duties of Principal Officer	Immediate	More responsibility for the Principal Officer
Section 20	Termination and resignation of controllers.	Within one month
Section 21	Appointment of Auditor, actuary, fund administrator custodian asset manager or investment advisor.	Within 3 months	Additional requirements included
Section 25	Governance of Fund Administrator	Within 12 months	New Section
Section 26	Appointment and termination of service providers by auditor, fund administrator	Within 3 Months	Fund Administrators shall appoint service providers, including an Auditor
PART IV -Financial Requirements
Section 28	Duty to establish measures to prevent money laundering and financing of terrorism	Immediate	New section
Section 29	Duties to report financial crime	Immediate	New Section
Section 34	Investments	Immediate	A fund shall not borrow money in excess of 25 percent of the previous annual contributions, except with the prior written consent of the Regulatory Authority.
PART V – Statutory Management, Termination and Winding up
Section 35 -37	Appointment of Statutory manager Duties statutory Manager Tenure of statutory manager	Immediate	New sections
Section 38-39	Appointment of curator trustees Tenure of curator trustee	Immediate	New sections
PART VII-Provisions Relating to Pension Benefits
Section 52	Deductions from member’s benefits	Immediate	Revised provisions of deductions pertaining to pension benefits.
PART VII-Miscellaneous Provisions
Section 55	Applications for extensions	Immediate	New section

Section 67 of the Act prescribes the transitional and savings provisions. All retirement funds and fund administrators that have been licensed under the repealed Act shall continue to carry on that business subject to the conditions referred to under the new Act.

Stakeholders are advised to familiarise themselves with the new Act and other applicable Financial Services Laws.

For more information:

Find out more about the Retirement Funds Act of 2022