Getting to Grips with Regulation 28

(For information on our Namibian Regulation 28 services, please click here.)

Fundamental amendments to Regulation 28 of the Pension Funds Act place complex reporting and compliance obligations on the trustees of retirement funds. Trustees must fully understand these new responsibilities if they are to integrate the strategies and systems necessary to ensure compliance.

Key Changes to Regulation 28

The revisions to Regulation are numerous and represent a sea-change in the way Trustees are required to consider their Funds’ investments. Changes include:

• Member level compliance with Regulation 28
• Quarterly reporting that includes the daily compliance position of members
• Identification of the underlying assets in any portfolio, using the look-through principle
• The recognition of hedge funds and private equity as separate asset classes
• Accurate, daily compliance with Regulation 28, not just at a particular point in time
• Embodiment of the principle of liability driven investing

Top Challenges for Trustees

In addressing compliance and applying solutions around changes to Regulation 28 trustees need to:

• Assess and identify any variance between the current level of compliance by the fund and its members and that required by Regulation 28
• Develop a plan that maps out the route to becoming compliant
• Apply for exemptions where and if necessary
• Establish appropriate systems that will monitor compliance on an on-going basis

Applying RisCura’s Regulation 28 Compliance Report

Using a unique combination of specialisation, industry relationships and proprietary technology, our retirement fund clients benefit from class-leading solutions to the problems of Regulation 28, combining:

• All the necessary relationships with asset managers (providing us with data feeds), facilitating rapid assessment of compliance levels, as well as the on-going compliance monitoring and quarterly reporting obligations of funds.
• A proprietary analysis and reporting system that is flexible, robust and proven. This enables us to gather data directly from asset managers and market data providers and deliver efficient, timeous and cost-effective reporting to trustees on every level of a retirement fund.

The result is an easy-to-follow report that highlights all possible compliance issues, and identifies where and how corrective action should be taken.

RisCura’s 8-Step Regulation 28 Compliance Process

1. All client fund holdings and transactions are obtained on a look-through basis from asset managers
2. Where applicable, we acquire details of member ownership of each asset manager portfolio from the fund’s unitisation service provider.
3. This data is then reconciled to check the daily holdings files for the fund and, where applicable, each member-choice product
4. Each investment instrument is evaluated to determine whether all information fields required for competent and consistent classification are included in our database
   1. For unlisted investment instruments, data is obtained from the asset manager
   2. For listed instruments, we obtain market related information directly from market data providers
5. All investment instruments are organised into correct Regulation 28 categories and thoroughly checked to ensure consistency and accuracy
6. Daily compliance checks are run at fund level and, where applicable, member-choice level
7. Trustees receive our report on compliance at each level of the fund
8. We facilitate transmission of all relevant reports to the FSB

Regulation 28 Made Easy

To learn more about how we can assist your fund in meeting its Regulation 28 training, compliance and reporting requirements, please contact René Swart on +27 (0) 21 673 6999 or email reg28@riscura.com for more information.