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Regulation 28 of Pensions Fund Act Under the Spotlight

November 3, 2021

National Treasury

Proposed amendments to Regulation 28 of the Pensions Fund Act have been drawn up.

National treasury published the draft amendments in Government Gazette 45396 for comment.

Regulation 28 limits the extent to which retirement funds may invest in particular assets or in particular asset classes in order to limit exposure to risky asset classes.

A new definition on “crypto-asset” is inserted.

It means a “digital representation of value that is not issued by a central bank, but is capable of being traded, transferred or stored electronically by natural and legal persons for the purpose of payment, investment and other forms of utility; applies cryptographic techniques and uses distributed ledger technology”.

A new definition on “hedge fund” is also proposed.

“Hedge fund has the meaning assigned to it in paragraph 2 of the declaration of the business of a hedge fund by the Minister of Finance, in Government Notice No. 141 in Gazette No. 38503 of 25 February 2015, to be a collective investment scheme to which the prescribed provisions of the Collective Investment Schemes Control Act, 2000 (Act No. 45 of 2002), apply”.

A definition on “infrastructure” is also proposed.

“Infrastructure means any asset class that entails physical assets constructed for the provision of social and economic utilities or benefit for the public”.

A new paragraph (dA) authorizing investment in a hedge fund subject to prescribed conditions is proposed for subregulation 3.

A new paragraph (iA) stipulates that the “aggregate exposure by a fund to all issuers in respect of infrastructure, including the aggregate exposure in respect of the rest of Africa, excluding South African government and government guaranteed instruments, may not exceed 45%, of the aggregate fair value of the total assets”.

A new Table 1 is also proposed.

Comment is invited until 12 November 2021.

Meanwhile, in Notice 1461, the South African Revenue Service (SARS) listed the incidences of non-compliance that are subject to a fixed amount penalty in accordance with section 210(1) and 211 of the Tax Administration Act.

The notice comes into effect on 1 December 2021.

In a statement, SARS announced the decision to revert to the method of calculating the qualifying medical expenses for school fees as set out in the 2012 Disability List.

The change will be effective retrospectively from 1 March 2020.

An amended 2020 Disability List has also been drawn up.

SARS highlights that the changes affect taxpayers whose children living with a disability attend a private special education needs school.