RETIREMENT MATTERS 5 OF 2025
Draft Ombud Council Rules for the Pension Funds Adjudicator
On 30 September, the Ombud Council published draft rules for the Office of the Pension Fund Adjudicator (OPFA). These rules clarify procedural aspects of complaint handling and aim to enhance fairness, efficiency, and transparency. No material changes are introduced to complaint-handling processes or obligations for funds and employers.
Key proposals:
- Procedures for receiving complaints and referring premature complaints to funds first.
- Communication protocols requiring funds to share both internal complaints channels and OPFA contact details.
- Consequences for non-cooperation, including default determinations.
- Confirmation of the Adjudicator’s authority to order costs and interest.
- Liaison arrangements with the FSCA and other ombud schemes.
The draft Rules were open for comments until 14 November 2025. The Rules are proposed to come into operation one month after the date of final publication on the Ombud Council’s website.
OPFA Communication 2 of 2025 – Death Benefits Jurisdiction
On 24 October 2025, the OPFA clarified its jurisdiction over death benefit distributions.
It emphasised that fund boards have wide discretion but must base decisions on a thorough investigation.
If discretion is not properly exercised, the Adjudicator can set aside the decision of the board and order a fresh investigation or reconsideration.
In rare cases, the Adjudicator may substitute the fund’s decision, although the fund’s discretion is generally respected by the Adjudicator.
Boards must act promptly on those referrals by conducting further investigations and issue new decisions, and communicate the new outcomes to beneficiaries.
Any dissatisfied party may then lodge a new complaint and the Adjudicator’s jurisdiction is not limited by prior rulings. This means that although the complaint regarding the first decision by the board will be closed, a new complaint based on the second decision may be lodged with the Adjudicator.
Financial Sector Transformation Council (FSTC) Reporting Notice 1 of 2025
The FSTC has issued Reporting Notice 1 of 2025 regarding B-BBEE reporting for retirement funds. While many B-BBEE elements do not apply to retirement funds, the Financial Sector Code encourages funds to measure themselves annually against relevant scorecard aspects, especially in appointing service providers.
For funds that submit B-BBEE reports, the report for the period between 1 January 2025, and 31 December 2025 must be submitted by 27 February 2026.
King V Code on Corporate Governance
The Institute of Directors in South Africa (IoDSA) published the King V Code on 31 October 2025, replacing King IV. King V introduces a simplified, outcomes-based governance framework effective for financial years starting 1 January 2026. A guidance note for retirement funds was published alongside the Code.
Highlights for retirement funds:
- Boards as the governing body must act ethically and in members’ best interests.
- Emphasis on ESG, responsible investment, and transparent reporting.
- Board composition should reflect diversity, independence, and skills, supported by ongoing training.
- Risk management, IT governance, and combined assurance models are critical.
- Stakeholder engagement and fair remuneration practices are encouraged.
- In the context of umbrella funds, manco members should equally apply the principles of good governance in their decision-making.
FSCA Notice – Budget, Levies and Fee Proposals
The Financial Sector Conduct Authority (FSCA) has published its levies and fees proposals for the 2026/2027 financial year. The FSCA is proposing to increase the levy variables by inflation adjustments of 4%, which is below the reported Average Consumer Price Index (CPI) of 4.4% as at December 2024. The FSCA is not proposing any fee increases.
The proposed levy increases were open for comments until 20 November 2025.
Update on implementation of cross-sectoral OMNI-Risk Return
The FSCA on 30 September 2025 published Communication 19 of 2025 regarding stakeholder consultation and engagement on the cross-sector OMNI-Risk Return (no longer OMNI-CBR) for financial institutions.
With the communication, the draft OMNI-Risk Return template and an Explanatory Guide have been published for consultation and were open for comments until 30 November 2025.
The OMNI-Risk Return will be the foundational data source for the FSCA’s new automated risk model, supporting a more modern, efficient, and harmonised approach to supervision.
The FSCA hosted six virtual industry workshops in November 2025 to discuss the OMNI-Risk Return.
The development of the new supervisory risk model and OMNI-Risk Return will come into operation in three phases, i.e.:
- Phase 1 will focus on the review and integration of all existing FSCA reporting requirements or returns onto the FSCA’s new technology platform;
- Phase 2 will involve the finalisation of the new automated risk model and supporting OMNI-Risk Return; and
- Phase 3 will focus primarily on the review and integration of the FSCA’s overall licensing, supervision and enforcement processes, which is currently under development.
The implementation date has not yet been determined, but it is unlikely that it will be implemented before Q4 of 2026.
Draft Prudential Standard on the requirements related to regulatory reporting and annual financials statements
The draft Prudential Standard with its supporting documents were submitted to Parliament on 25 November 2025. The submission to Parliament is a requirement in terms of section 103(1) of the Financial Sector Regulation Act, which requires that before making a regulatory instrument, it must be submitted to Parliament for a period of at least 30 days while Parliament is in session.
The current auditing and reporting rules under Board Notices 14 and 77 are fragmented and outdated, with exemptions for smaller funds and obsolete formats despite updates by the Independent Regulatory Board for Auditors (IRBA). A need to consolidate and modernise regulatory reporting and financial statement formats into a single instrument was therefore identified.
The Prudential Standard will set out the new regulatory reporting framework for retirement funds and will introduce the following key changes:
- Consolidation: Combines all audit and regulatory reporting requirements, replacing existing Board Notices 14 and 77.
- Integration: Merges regulatory reporting requirements with the prescribed financial statement format into a single instrument.
- Enhanced Guidance: Provides more detailed concepts and a clear conceptual framework for reporting (accounting guide)
- Alignment: Updates requirements to align with the latest International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS).
- The changes from the revised Regulation 28 on infrastructure assets and asset spreading are incorporated.
- Guidance Notice 1 of 2019 on Sustainability of Investments requires pension funds to promote transparency, accountability, and fair member treatment by adopting sustainable reporting practices. Boards must disclose how their Investment Policy Statement (IPS) aligns with this guidance, with specific disclosures included in Schedule E of the financial statements.
- The current exemption allowing certain funds to avoid appointing an auditor and having audited financial statements will be removed. As a result, the draft Prudential Standard will apply to all funds, including those with assets below R50 million.
Although the effective date will be 1 January 2026, the implementation date has not been decided yet, and it is not expected to be implemented during 2026.
New Pension Funds Adjudicator
The Minister of Finance has appointed Mr Lebogang Paul Mogashoa as the new Pension Funds Adjudicator. The appointment is for a period of three years, effective 8 December 2025.