November 19, 2021

6 of 2021

Changes to customary marriages brought about by the Recognition of Customary Marriages Amendment Act

In the distribution of death benefits or approval of payment to non-member spouses in divorce claims, boards of management often deal with customary marriages.

The Recognition of Customary Marriages Act 120 of 1998 (“RCMA”) was amended on 1 June 2021, which changed the proprietary consequences of customary marriages.


Prior to the coming into operation of the RCMA in November 2000, customary marriages were recognised for limited purposes and the marriages were not solemnised in terms of the Marriages Act.

The RCMA conferred full legal recognition on customary marriages, regardless of when the marriages were concluded. However, the requirements for and the consequences of the customary marriage differ, depending on whether they were entered into before or after the coming into operation of the RCMA.

Customary marriages entered into before the RCMA (November 2000)

Marriages entered into before the RCMA came into operation preserve the old customs and consequences of a customary marriage. The marriage was valid if it complied with the customary law requirements for a valid marriage.

For the majority of the customs, the requirements were as follows:

  1. Irrespective of the bride and groom’s age, they and the bride’s father had to consent to the marriage.
  2. The bride had to leave her family to live with her husband and lobola had to be delivered to the bride’s family.

A celebration of the marriage was often held, but it was not a requirement for the validity of the marriage.

A customary marriage entered into before the commencement of the RCMA had to be registered at the Department of Home Affairs before 15 November 2002. However, the non-registration of these marriages does not affect the validity of the marriage.

The patrimonial consequences of marriages entered into before November 2000, where said marriage was not registered by November 2002, were and remain governed by customary law. Monogamous marriages that took place before the commencement of the RCMA were automatically out of community of property. For couples in polygamous marriages, a ranking system was used and the marriages were ranked according to the date of marriage, with the first wife being the main wife and the husband being the head of all the houses. This means that all the houses and property of all the wives formed part of one estate, with the husband as the family head in control of all family property.

Customary marriages entered into after the enactment of the RCMA

The requirements for valid customary marriages concluded after the commencement of the RCMA are as follows:

  1. The bride and the groom must both be over the age of 18 and they must both consent to the marriage. Where either of the spouses is younger than 18, the parent or legal guardian can consent to such marriage.
  2. The marriage must be negotiated and entered into, or celebrated in accordance with customary law.

A customary marriage concluded after the commencement of the RCMA, must be registered within three months after such conclusion, or within such longer period as determined by the Minister from time to time in the Gazette.  Although the RCMA provides for registration, it is not a requirement for a valid customary marriage. A registration certificate serves as prima facie proof of the existence of a customary marriage and of the particulars contained therein.  It therefore makes it easier to prove the existence of a marriage.

A monogamous customary marriage entered into without an antenuptial contract means that the couple is automatically married in community of property. The patrimonial consequences of marriages entered into after the commencement of the RCMA means that the wife’s status and capacity, including capacity to acquire assets and to dispose of the assets, was restricted to the matrimonial property system which operates in the marriage. This meant that in most cases, the husband remained the family head and controlled the family property. This resulted in the wife’s capacity to acquire and deal with property and her capacity to perform legal actions on her own, still being restricted.

A husband who has a customary wife and wants to enter into a polygamous marriage must, prior to the celebration of the new marriage, obtain the court’s approval of a written contract regulating the future matrimonial property system of his marriages. In the case of Ngwenyama v Mayelane, the Supreme Court of Appeal held that a failure by a husband in a polygamous marriage to obtain the court’s approval of a written contract regulating the future matrimonial property system of his marriages, will not render the subsequent marriage/s null and void. Instead, such failure will render the subsequent marriage/s to be marriages out of community of property.

Section 8 of the RCMA provides that a customary marriage may only be dissolved by a court by a decree of divorce, irrespective of whether the marriage was concluded before or after the commencement of the RCMA. The RCMA provides that a divorce order dissolving the customary marriage can be obtained only from a high court, a family court, or a divorce court.

The RCMA however, does not deal with the dissolution of customary marriage by death. This is usually because the death of the wife in a polygamous household does not necessarily dissolve and/or destroy that household.

Changes brought about by the Recognition of Customary Marriages Amendment Act

With effect from 1 June 2021, the RCMA was amended and spouses married under customary law will now be entitled to a share of the joint estate on either the death of their spouse, or when they divorce. All customary marriages, whether entered into before or after the enactment of the RCMA, will be regarded as marriages in community of property, unless it is set out differently in an antenuptial contract. Therefore, this will exclude couples who are customarily married out of community of property and have an antenuptial contract excluding community of profit and loss.

For couples who choose to enter into a customary marriage in future, it means that if they do not have an antenuptial contract, they will by default be married in community of property. This will apply to both polygamous and monogamous customary marriages and includes polygamous or monogamous marriages entered into before November 2000, when the RCMA came into effect.

The proprietary consequences of a customary marriage in which a person is a spouse in more than one customary marriage, including those entered into before the commencement of the Recognition of Customary Marriages Amendment Act, are that the spouses in such a marriage will now have joint and equal ownership and rights of management and control over matrimonial property. This means that a spouse will have rights in respect of the house and property of “her” house and joint rights in respect of all family property, with the husband and the other wives.

These women will now have the same rights and status in terms of their lawful entitlement to their share of their partner’s estate and be classified as married in community of property.

The way customary marriages are concluded or celebrated has not changed. What has changed is that women in customary marriages will now have the same rights and status as other women and men married in terms of the Marriage Act in South Africa and will not be discriminated against.

Customary spouses must upon divorce obtain a divorce decree and divorce settlement agreement allowing them to split pension interest and enable them to claim against each other’s retirement fund benefits.

 FSCA Information Request 2 of 2021: Request for information related to profiles of licensed financial institutions

The FSCA has issued Information Request 2 of 2021 on 11 October 2021, in which certain information is requested from all licensed financial institutions. Licensed financial institutions include retirement funds, financial services providers, collective investment schemes and insurers. The purpose of the request is to ensure that the FSCA has accurate and complete information regarding financial institutions.

Principal officers must complete the verification and/or update the information on the FSCA’s e-portal on or before 15 December 2021. Failure to provide the relevant information by 15 December 2021 constitutes an offence and an entity that fails to comply with the requirements may be liable on conviction to a fine not exceeding R1 000 for every day during which the offence continues. The FSCA issued step-by-step guidance for retirement funds on how to access the portal, the information required and how to verify and load the information.

The FSCA has confirmed that:

  • Principal officers must ensure that they are registered in respect of each fund that they are appointed to.
  • They are investigating the possibility to authorise other individuals to have access to and sign off on procedures.
  • In the case of an umbrella fund, participating employer data per fund must be submitted by the end of January 2022 and a template to be used is being developed.
  • The approximately 1 900 funds that are in the process of being deregistered will be excluded from the process.
  • Funds in the process of liquidation must only complete the Fund Profile data.

Unclaimed benefits

Although the default regulations introduced paid-up fund membership after withdrawal, certain benefits may still become unclaimed. The FSCA has developed a platform through which members of the public who are prospective beneficiaries of unclaimed retirement benefits that are currently managed by various retirement funds and/or administrators, can access unclaimed benefits in a more cost-effective way. The responsibility of tracing and paying unclaimed benefits however, remains with the board of management of a fund.

The FSCA indicated the following contributing factors to the large number of unclaimed benefits at a recently held media roundtable:

  • Inaccurate member data – members do not provide the fund with updated contact details, or employers do not provide funds or administrators with comprehensive details of members of the fund.
  • Many employers or funds don’t provide members with sufficient fund information and do not inform members of their entitlement to withdraw their benefits.
  • There aren’t enough mechanisms to enable workers coming from other countries and leaving South Africa shortly after the expiry of their work permits, to claim their benefits from their home countries and get paid in those countries.
  • Poor administration and record keeping by funds or administrators.

Legislation has been formally prepared and presented to the public on consolidating various unclaimed benefits into a single fund and registry under the supervision of the FSCA. The governance model will be refined to ensure that the fund is run and managed properly, efficiently and effectively.

FSCA annual report

The FSCA has published their 2020/2021 annual report, stating that their three-year regulatory strategy was implemented successfully, regardless of many new obstacles. This strategy had been developed at the inception of the FSCA and was an articulation of the objectives as stipulated in the Financial Sector Regulation (FSR) Act, which are to enhance the efficiency and integrity of financial markets, promote fair customer treatment by financial institutions, provide financial education, promote financial literacy and to assist in maintaining financial stability.

The FSCA has commissioned a research into South Africa’s domestic financial sector outlook over the medium-term, to assess how the Covid-19 pandemic may affect industry and customer trends going forward.

The retirement funds supervision division’s priorities are aligned with the following objectives of the FSCA:

  • Transformed and inclusive retirement funds industry.
  • A robust regulatory framework that promotes fair treatment of retirement fund members and beneficiaries.
  • Informed retirement fund members.
  • Proactive retirement fund industry stakeholder management.

Retirement funds industry

A significant amount of technical work took place in relation to retirement fund regulatory framework developments. These developments are at varying stages of completion, with the following Conduct Standards finalised and published:

  • Minimum skills and training requirements for board members of pension funds.
  • Conditions for smoothed bonus policies to form part of default investment portfolios.

Significant supervisory issues that were identified during on-site inspections conducted on retirement funds were:

  • Vacancies of boards were not filled within 90 days.
  • Failure of board members to complete the Trustee Training Toolkit.
  • Failure by boards to monitor compliance with section 13A of the Act.
  • Failure of boards and principal officers to monitor compliance with Directive 8.
  • Expenses and remuneration of board members are high.
  • Funds are being managed in terms of unregistered rules.
  • Failure by boards to timeously submit annual financial statements and valuation reports.
  • Failure by principal officers to comply with their fiduciary duties in terms of applicable legislation.

 The recent proposed amendments to Regulation 28 by government are supported by the FSCA and should encourage funds to play a larger role in boosting economic growth locally and in Africa.

 Promotion of Access to Information act (PAIA)

The new revised PAIA regulations have been published by the Minister of Justice and Correctional Services.

Guide on how to use PAIA

A guide on how to use PAIA is available in each of the official languages, containing information required by a person who wishes to exercise any right contemplated in PAIA. The guide must be placed on each fund’s website (if any), be made available to any requester of information at the office of the Information Officer during normal office hours and at the office of the fund, in at least two of the languages.


The Information Officer must compile and keep a PAIA manual with a description of the categories of records that are voluntarily disclosed, or automatically available without a requester having to request access thereto. The manual must also be made available on the website of the fund and from the Information Officer and registered office of the fund. The Information Officer must, if a request for access to a record is made orally by a requester as a result of illiteracy or disability, complete the prescribed request form on behalf of the requester.


A complaint process has also been put in place from 30 June 2021 whereby a requester whose request for information has been refused, may submit a complaint to the Information Regulator. The regulations set out the procedure applicable to such complaints and the forms to be used.

FSCA Communication – Notification of processing in terms of POPIA

The FSCA distributed the communication on 19 October 2021, confirming that the FSCA is empowered in terms of the FSR Act to collect and use personal information to perform its objectives, obligations and duties.

The FSCA undertakes to take the necessary measures to safeguard personal information it processes, to ensure compliance with POPIA.

 Pension Funds Adjudicator

Communication 1 of 2021

The Office of the Pension Fund Adjudicator (OPFA) issued Communication 1 of 2021 dated 14 October 2021, dealing with section 13A orders relating to arrear contributions.

It has been the practice of the OPFA to order an exchange of information between the employer and the fund, and only subsequent to that exchange has ordered the employer to pay the fund an amount calculated based on the exchange of information. Such an order by the OPFA is deemed to be a civil judgment and must be given effect to.

With effect from 1 December 2021, the OPFA will commence conducting investigations relating to arrear contributions in a manner that will enable the OPFA to make orders sounding in money. Funds that are responding to complaints pertaining to arrear contributions should provide the necessary information pertaining to the arrear contributions in their initial response to such complaints.

Annual report

The OPFA has issued its annual report for the 2020/2021 year and stated that the economic downturn did not result in an increase in complaints. In the year under review, 7 014 new complaints were received, representing a 37.25% reduction from the previous year and 10 940 complaints were closed, which includes those carried over from the previous reporting period. 5 245 complaints were closed by way of formal determinations, 2 807 matters were settled and 615 were closed for other reasons. 2 273 complaints were deemed as out of jurisdiction and therefore, could not be investigated further by the OPFA.

From September 2020, the OPFA implemented a revised complaints management process in order to deal with administrative-related complaints such as requests for benefit statements, clarification of information, completion of claim forms, requests for breakdown of benefits pay-outs and non-payment of benefits. The new process was also aimed at addressing the interpretation of section 30A(1) of the Pension Funds Act which gives an option to the complainant to first approach the fund/administrator/employer with his/her complaint before lodging it with the OPFA.

Withdrawal benefits remained the highest category of complaints at 52.93%. Complaints relating to the non-payment of retirement fund contributions (section 13A compliance) came in second at 23.87%. Both withdrawal benefit and section 13A complaints involve complainants claiming their withdrawal benefits and there being delays in the payment thereof, either because proper documents have not been submitted to the fund, or more commonly, a partial payment has been made/no payment has been made at all owing to non-payment of (full) contributions.

6.91% of complaints finalised related to the payment of death benefits in terms of section 37C of the Pension Funds Act. Clarity continues to be provided to funds by the OPFA, the Financial Services Tribunal, the various high courts, and the Supreme Court of Appeal on the interpretation of section 37C. It is most prudent that funds/administrators invest in training initiatives within their boards of management or organisations to ensure that technical expertise or knowledge on how to deal with death benefit payments is shared and maintained.

Protection of Personal Information Act (POPIA) update: prior authorisation

POPIA prescribes that responsible parties must apply for prior authorisation by the Information Regulator for the processing of personal information in certain circumstances. The commencement date of section 58(2) of POPIA, which deals with prior authorisation, has been extended to 1 February 2022. If prior authorisation is not granted, the processing must stop and the penalties for non-compliance are a fine of up to R10 million and/or imprisonment for a period not exceeding twelve months.

There are four circumstances in which prior authorisation must be obtained:

  1. Unique identifiers

Unique identifiers include bank details, policy numbers, employee numbers and phone numbers. In terms of POPIA, prior authorisation is needed to process these unique identifiers if it is used for a different purpose than what it was collected for, and with the aim of linking it to other information collected by a different responsible party. This means that if a fund uses the information for another purpose than the lawful management of the fund, prior authorisation to use the information would be needed.

  1. Criminal behaviour

If information on criminal behaviour, or unlawful or objectionable conduct is processed on behalf of third parties, prior authorisation would be needed. This applies to persons contracted to do reference checks. This section does not apply to retirement funds, as funds may receive information pertaining to a member’s criminal behaviour for the purpose of section 37D of the Pension Funds Act, but does not make the enquiry for a third party and are not contracted to do so.

  1. Credit reporting

This section applies to a credit bureau or responsible party processing personal information for credit reporting purposes and therefore not to a retirement fund.

  1. Sending information outside South Africa

Prior authorisation must be obtained if the responsible party intends to transfer (including for purposes such as storage) special personal information, or the personal information of children to a third party in a foreign country that does not provide an adequate level of protection for the processing of personal information, or where a binding agreement is not in place to provide the protection. It is advisable for funds to ensure personal information is only sent to jurisdictions where there is adequate protection of information, or to have a binding agreement in place to provide the protection required in terms of POPIA.

Updated draft amendments to Regulation 28

On 26 February 2021, National Treasury published the first version of draft amendments to Regulation 28 of the Pension Funds Act for public comment. The purpose of the amendments is to make it easier for retirement funds to invest in infrastructure. An updated version of the draft amendments was published on 29 October 2021 and any comments must be submitted to National Treasury by 12 November 2021.

The noteworthy differences between the first and the latest draft are the following:

  • In this version a definition of “crypto-asset” is introduced and a fund may not invest in crypto-assets directly or indirectly, not even as part of “other assets” as referred to in the table prescribing the asset limits.
  • The proposed overall limits for investment in infrastructure across all asset categories was set in the previous draft at a maximum of 45% in respect of domestic exposure and an additional limit of 10% in respect of the rest of Africa, and aggregate exposure per issuer or entity to 25% of the total assets of the fund. In the updated draft the investment in infrastructure, including in the rest of Africa, is limited to 45%. South African government and government guaranteed instruments are not included in the 45% limit.
  • In the updated draft, “infrastructure” is defined as “any asset class that entails physical assets constructed for the provision of social and economic utilities or benefit for the public”. This is broader than the definition in the previous version, where it was limited to the national infrastructure plan for the development of public infrastructure.
  • Although infrastructure assets are not prescribed, it will have to be reported on. A new Table 2 is inserted, which includes reporting on investments in infrastructure.

National Treasury: Technical Paper 2021 – financing a sustainable economy

On 15 October 2021, National Treasury published an updated version of the technical paper (hereafter referred to as “the paper”) first published in May 2020. The media statement that accompanied the publication of the paper summarised its purpose clearly: The paper serves as a foundational step towards encouraging more long-term investments in sustainable economic assets, activities and projects. Where previously financial institutions would only focus on the return on investment of projects, the focus on sustainable finance encourages them to also be cognisant of how their investment decisions impact the environment.

The paper also emphasises the importance of the FSCA and National Treasury to work together to develop a strategic framework that guides the financial sector’s role in and ability to promote climate change and promote sustainable ESG practices relating to sustainable investments.

The following recommendations are made:

  • Regulators should issue guidance to or regulatory oversight of instruments on sustainable finance.
  • All investment decisions should consider environmental and social factors, as well as climate risk, which have implications for the training of boards of management and actuaries, as well as investment managers.
  • Amendment of requirements for annual financial statements and other reports to ensure the disclosure, monitoring and reporting of responsible finance investments.
  • Making it easier to invest in sustainable finance investment vehicles or projects and green investments.
  • Retirement funds and asset managers to develop and disclose ESG risk management policy frameworks and governance systems in line with the recommendations in the Guidance Note published in 2019.

This is an important initiative from National Treasury. True impact will only be made if the boards of all investee companies and retirement funds consider sustainability in their businesses. It is possible for larger retirement funds to consider specific sustainability-themed investment funds. Boards of management are encouraged to engage with their consultants and asset managers on these matters.


Must umbrella funds have independent board members?

Section 7B of the Pension Funds Act provides for possible exemption from the requirement that 50% of board members must be member elected board members. If a fund has exemption in terms of section 7B(1)(b), but only for a limited period, PF96 states that one independent board member must serve on the board of management. If the fund has indefinite exemption in terms of section 7B(1)(b), the requirement in Guidance Note 4 of 2018 is that 50% of board members must be independent.