By Ashford Meikle, Staff ReporterTHE FINANCIAL Services Commission (FSC) will be the regulatory body for pensions management when the Pensions (Superannuation Funds and Retirement Schemes) Act comes into effect.
So said actuary Daisy Coke, while speaking at the Pensions Fund Seminar organised by Guardian Asset Management which was held last Thursday at the Knutsford Court hotel in New Kingston. Essentially, the Act, which is now before the Senate, will seek to register superannuation funds and retirement schemes. Superannuation funds (SFs) differ from retirement schemes (RS) in that the former are company-administered, while RS are personal plans. The Act will replace current legislation some of which are approximately 50 years old.
Mrs Coke pointed out that the main purposes of the Act were to:
1. Enhance and improve pension administration.
2. Protect assets held in pension funds.
3. Enable the self-employed to contribute to a pension, as well as those who are in non-pensionable employment.
4. Provide contributors with the security and facility to appeal to the regulator (FSC).
DETAILS OF NEW LEGISLATION
Importantly, as Mrs. Coke pointed out, unlike previous legislation governing pension schemes, the new legislation will entail:
1. Approval and registration of plans, trustees, investment managers and administrators by the FSC.
2. Pension schemes will now have to file annual returns.
3. Regular benefit statements to be made available to members.
4. Winding up of pension schemes clearly defined to be licensed by the FSC, investment mangers and administrators must satisfy the commission's fitness and proprietary requirements. Failing the requirements means that the applicant cannot legally manage a fund or invest funds on behalf of any pension scheme. The Act also makes it clear that only companies in good standing with the FSC as security dealers licence holders will be allowed to manage pension funds.
The FSC will have the power to investigate the activities of any superannuation fund or pension schemes, as well as the activities of its officers. Importantly, the commission will be empowered to appoint any person to carry out investigations. Such costs would be borne by the either the administrator, manager or trustee of the scheme. The FSC will also have the power to wind up a fund or scheme if it is felt to do so would be in the best interest of the members contributing to the fund/scheme. Breach of the Act can result in a fine of up to $3 million or imprisonment of up to two years.
Last Thursday's seminar wa the first in series planned by Guardian Asset Management. The seminars will focus principally on pension management. Guardian Asset management is wholly owned subsidiary of Guardian Holdings Limited. It specialises in money management, pension fund management, bond trading and management of mutual funds.
