29 Jul 2014

Legislators have welcomed a bill that seeks for the licensing, regulation and administration of all retirement funds including pension and provident funds.

The Retirement Funds Bill passed the committee stage and its third reading without any noticed amendments. It was presented by the Minister of Finance and Development Planning, Mr Kenneth Matambo.

When presenting the bill, Mr Matambo explained that the bill repealed the Pension and Provident Funds Act and sought to re-enact under the new name, Retirement Funds Act. He said it was intended to be the law, which provided regulation over all forms of retirement funds in Botswana.

“The retirement funds that are to be regulated by the Retirement Funds are annuities, preservation funds, beneficiary funds and external funds among others. This bill also regulates administrators and boards of retirement’s funds, “he said.

The minister said the drafting of the Bill involved extensive consultations with a wide range of stakeholders including pension fund members, assert managers, fund administrators, pension fund providers and trustees.

Mr Matambo told the House that the Bill empowered NBFIRA to exercise better supervision over retirement funds in terms of risk based oversight, investment of fund asserts, transparency of funds to their members, participation by members in the affairs of the funds and clear requirements for trustees and management of fund contributions.

When debating the Bill South East South MP Mr Odirile Motlhale said it was vital to protect pensioner’s rights. He said different nations had sad stories about what happened when pensioners were not protected.

A clear example could be in the United Kingdom where a certain company, Northernrock lost money because of investments that they undertook or lack thereof of management of those funds,” he said.

Mr Motlhale pleaded with the minister to lay out safeguard mechanisms that could assure that pensioners would be protected in the event that the company goes insolvent or any other reasons.

The objectives of the Bill are to provide for a framework that explicitly lays out the governance of administrators of funds, to provide for investments to be approved and guarded by the Regulatory Authority in a manner where the interests of the members are protected and provide for the amalgamation and transfer of funds.

Parliament also passed the Securities Bill and the Companies (Amendment) Bill. Minister of Trade and Industry, Ms Dorcus Makgato-Malesu presented the Companies (Amendment) Bill whose objective was to amend the Companies Act (Cap 42:01) as a consequence of the Building Societies (Amendment) Act.

She said the amendment will enable the building societies to convert to companies so as to be able to apply for banking licenses as one way of making them more competitive.

She also said that the Bill also seeks to amend the Companies Act so that the registrar is given powers to either de-register a company or refuse to register it if in his opinion it will be in public interest to do so.

The Bill further seeks to amend the Companies Act in order to make it a requirement for companies engaged in a share transfer, to lodge a copy of the share register reflecting such transfer with the office of the register.

Ms Makgato-Malesu said this will allow the registrar to be aware, at any given time, who the shareholders of a particular company are. ENDS