PFA
Pension Funds Act
Regulates the establishment, registration, governance, investment, and dissolution of pension, provident, and retirement annuity funds in South Africa, protecting members' retirement savings.
Sections
3
Duties
3
Questions
5
Assessment from
R 70 000
What it covers
The Pension Funds Act 24 of 1956 (PFA) governs occupational retirement funds in South Africa — pension funds, provident funds, retirement annuity funds, and umbrella funds — supervised by the FSCA's Retirement Funds Division. Every fund must be registered with the FSCA and governed by a board of trustees (or, increasingly, outsourced to a licensed umbrella fund's board) responsible for the fund's proper administration in the interests of members and beneficiaries. Section 7 prescribes board composition requirements, including member-elected trustee representation, and mandates trustee training (the FSCA Trustee Toolkit) to ensure trustees can discharge their fiduciary duties competently. Section 37 requires every fund to have a written investment policy statement and to invest fund assets prudently, subject to the prescribed limits in Regulation 28 (asset allocation limits by asset class and exposure concentration, designed to protect members from excessive risk concentration). The Act also governs death benefit distribution under s37C (requiring trustees to conduct a fair investigation into a deceased member's dependants and equitably allocate the benefit, irrespective of the member's nomination), surplus apportionment, fund mergers and conversions, and the appointment of a Principal Officer responsible for the fund's day-to-day compliance. The Office of the Pension Funds Adjudicator provides a no-cost dispute resolution mechanism for members and beneficiaries. The 2-pot retirement system reforms effective September 2024 introduced further obligations regarding the savings, retirement, and vested components of member funds.
Does this apply to you?
It applies if
- Your organisation operates, sponsors, or administers an occupational pension fund, provident fund, or retirement annuity fund for employees or members
- Your organisation acts as a board of trustees, Principal Officer, or fund administrator for a registered retirement fund
- Your organisation participates in or sponsors an umbrella fund arrangement for its employees
Thresholds that change what's required
- Applies to all registered funds regardless of size, though umbrella funds (where multiple employers participate in a shared fund with a professional, independent board) face a different governance structure than standalone funds
- Specific obligations under s37C (death benefit distribution) and Regulation 28 (investment limits) apply identically regardless of fund size
Exemptions
- Government Employees Pension Fund and certain other statutory funds are governed by separate dedicated legislation rather than the PFA
- Funds that have been deregistered following a complete winding-up are no longer subject to ongoing PFA obligations, though historical conduct remains subject to scrutiny
What non-compliance costs
Maximum fine
R 10 000 000
Imprisonment
Up to 10 years for fraud, theft, or other criminal conduct involving fund assets; specific PFA offences (e.g. operating an unregistered fund) carry separate penalties
Civil exposure
Trustees can face personal liability for breach of fiduciary duty resulting in loss to the fund or members; the Pension Funds Adjudicator can order a fund to pay compensation or correct an unfair benefit determination
Reputational
Adjudicator determinations against a fund or its trustees are published; persistent governance or investment failures damage the sponsoring employer's standing with employees and can trigger broader FSCA scrutiny of related fund arrangements
What the assessment covers
The assessment works through 5 questions across 3 duties, scored out of 61. Each answer generates the specific actions needed to close or prove that duty — and a “yes” only counts once its evidence is in, which is what makes the score defensible rather than self-declared.
The questions themselves are part of the assessment.
Find out where you stand on PFA
Run the assessment, get your score, and get the exact list of what to fix — with the evidence trail an auditor will ask for.