The Financial Sector Conduct Authority has published a draft Conduct Standard for determining the minimum skills and training requirements for board members of pension funds. Comments are required by 4 July 2019
The purpose of the draft Conduct Standard is to prescribe the minimum skills and training requirements for board members of funds as contemplated in section 7A(3)(a) of the Pension Funds Act, 1956. This section requires the trustees (board members) of pension funds to attain the levels of skills and training within six months after being appointed to such position that may be prescribed by the Authority. Section 7A(3)(b) goes further to state that board members must maintain their skills and training throughout their term of appointment.
The draft Conduct Standard proposes that a board member should use the Trustee Toolkit which is provided for by the Authority on the website www.trusteetoolkit.co.za as the prescribed minimum skills and training requirement envisaged in section 7A(3)(A) of the Act. The Trustee Toolkit includes two types of assessment, namely:
1. Tutorials, case studies and initial assessments which are completed online and should pose no financial hardship on any trustee obtaining certification; and
2. The final assessment must be completed under the supervision of the principal officer or chairperson of the board to ensure that the assessment is completed without assistance. The importance of this assessment is to verify the board member has done the training. Unlike the initial assessments, there may be a cost involved with respect to the time spent by board members to undertake the final assessment.
The Authority has advised that the Trustee Toolkit has been designed with the aim of developing skills and providing training. It is not a form of qualification with a pass or fail outcome consequently allowing trustees to complete the Trustee Toolkit within a reasonable period without having to pass or fail. The Trustee Toolkit will provide board members with basic knowledge of the legislative requirements and information on fund governance, the responsibilities and obligations of board members towards the fund and its members, as well as guidance on what fit and proper conduct is deemed to be.
Board members who attained certification will be required to complete additional modules as and when these modules are added to the Trustee Toolkit by the Authority. The draft Conduct Standard proposes that:
- The Conduct Standard will take effect on 1 January 2020;
- A board member is appointed before 1 January 2020 will be required to attain the certification by 30 June 2020;
- A board member who successfully completed the Toolkit certification before 1 January 2020 is not required to complete the certification again; and
- A person who has successfully completed the Toolkit certification and is subsequently appointed to a board of a fund is not required to complete the certification again.
In the event that a board member is unable to complete the Trustee Toolkit within the prescribed time, such board member may make an application to the Authority requesting an extension of time to complete the Trustee Toolkit.
Submissions on the draft Conduct Standard can be submitted in writing on or before 4 July 2019 to the Authority at MinimumSkillsandTraining@fsca.co.za