The registrar may grant valuation exemption to a fund, commencing on a fund's financial year-end or anniversary (`the effective date') and for a period not exceeding three years, provided that it complies with all of the following conditions:
| (a) | At the effective date, A equals or exceeds B, where: |
A is the fair value of the assets of the fund less any credit balances in the member and employer surplus accounts; and
B is the sum of the values of the amounts standing to the credit of all the accounts held for individual members, whether contributory or paid-up, plus the value of any other liabilities plus the amounts standing to the credit of any investment reserve account set up to facilitate the smoothing of fund return credited to member accounts and such contingency reserve accounts which are established or which the board deems prudent to establish;
| (b) | All existing pension payments and any future pension that become payable in terms of the rules of the fund are fully secured by one or more annuity policies purchased from one or more registered long-term insurers; and/or the fund, in terms of its rules, provides and fully secures living annuities for its members upon retirement in terms of which the liability of the fund in respect of each such member is limited to the amount available per member in the fund at the date of the member's retirement and at any point thereafter; |
| (c) | All members of the fund, other than pensioners, belong to defined contribution categories of the fund; |
| (d) | Where any benefit payable to a member exceeds the value of the member's individual account, the excess is fully insured with one or more registered insurers; |
| (e) | Where the fund has a contingency reserve account in terms of the rules of the fund, other than a processing error reserve account, the rules provide that such reserve account could never have a negative balance; |
| (f) | The fund complied with the provisions of section 15B of the PFA in that: either a surplus apportionment scheme has been approved; a nil return has been noted; or the fund is not required to make a submission in terms of section 15B; and |
| (g) | Unless the fund was valuation exempt subsequent to its surplus apportionment date, the statutory actuarial valuation following such valuation as at its surplus apportionment date, has been accepted by the registrar. |
