Reg 28
Regulation 28 of the Pension Funds Act Regulations
Prescribes maximum asset allocation limits by asset class, issuer concentration, and offshore exposure for retirement fund investments, applying a look-through approach to pooled and derivative investments.
Sections
3
Duties
3
Questions
4
Assessment from
R 65 000
What it covers
Regulation 28, made under section 36 of the Pension Funds Act, is the specific prudential investment regulation governing how retirement funds may allocate member assets. While the Pension Funds Act broadly requires prudent investment, Regulation 28 operationalises this through hard percentage limits: maximum exposure to equities (75%), property (25%), and combined growth assets; specific sub-limits on offshore/foreign exposure (currently 45% combined Africa and offshore allowance following 2022 amendments, with no more than 45% in non-African offshore assets); issuer concentration limits (no more than 15% in a single bank, 10% in any other single issuer except government bonds, with specific look-through rules for collective investment schemes); and limits on hedge funds, private equity, and unlisted investments. Regulation 28 applies a 'look-through' principle — funds must assess and report their actual underlying exposure through pooled vehicles, derivatives, and fund-of-fund structures rather than only the headline allocation. The 2022 amendment notably removed the prior fixed split between African (10%) and other offshore (30%) allowances, replacing it with a combined 45% non-domestic allowance with flexibility, while removing prescribed dividend and infrastructure investment incentives in favour of a simplified framework. Trustees must obtain quarterly compliance certificates from their investment managers/administrators and ensure the fund's overall combined exposure across all underlying mandates remains compliant, not just each individual mandate in isolation.
Does this apply to you?
It applies if
- Your organisation is a pension, provident, retirement annuity, or preservation fund subject to the Pension Funds Act
- Your organisation manages investment mandates on behalf of a retirement fund subject to Regulation 28
- Your organisation is an investment manager, multi-manager, or asset consultant constructing portfolios that must remain within Regulation 28 limits at the fund level
Thresholds that change what's required
- Limits apply at the aggregate fund level across all underlying mandates and pooled investments, not merely within each individual mandate considered separately
- Look-through requirements apply specifically to collective investment schemes, fund-of-funds, and derivative exposures used to gain or hedge asset class exposure
Exemptions
- Defined contribution member 'self-select' portfolios within an umbrella fund may have specific considerations depending on fund rules, though the fund as a whole remains subject to Regulation 28
- Funds that are being wound up or are dormant with no active investment decision-making may have reduced practical application, though formal compliance obligations remain technically applicable until deregistration
What non-compliance costs
Maximum fine
R 10 000 000
Imprisonment
Reg 28 itself does not prescribe imprisonment directly; breaches are addressed through Pension Funds Act enforcement mechanisms and trustee fiduciary liability
Civil exposure
Trustees can face personal liability for breach of fiduciary duty where a Regulation 28 breach causes member loss; the Pension Funds Adjudicator has jurisdiction over member complaints linked to investment governance failures
Reputational
Persistent or material Regulation 28 breaches reported to the FSCA can trigger enhanced supervisory engagement and are a negative factor in any subsequent fund governance or merger assessment
What the assessment covers
The assessment works through 4 questions across 3 duties, scored out of 51. 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 Reg 28
Run the assessment, get your score, and get the exact list of what to fix — with the evidence trail an auditor will ask for.