On Friday, 09 December 2016, National Treasury released a revised set of draft default regulations aimed at lowering charges and improving market conduct in the retirement fund industry. The revisions are an update following consultation with industry stakeholders since the release of the initial drafts in July 2015.
Liberty Corporate said in a statement that it continues to support the need for default regulations, particularly where members do not traditionally receive advice.
“The actual operational implementation of the regulations was extensively debated following the first draft. We are encouraged to see that National Treasury has taken into account the feedback as reflected in the latest draft.
“The draft released on Friday further shifted more to a principles based approach, which is less restrictive and allows more freedom in the application of the regulations.”
Liberty Corporate said that some of the main changes reflected in the latest draft include:
· Allowance of smoothing, guarantees and performance fees
· Relaxation on the extent to which member characteristics are taken into account for investments
· A more practical approach to preservation
· Opting into a default annuity, rather than having to opting out of the default
“The revised set of defaults is a move in the right direction, and as Liberty, we will continue to engage with industry and the National Treasury to improve retirement outcomes for members.”