(1)
| (a) | When members are enrolled into a pension or provident fund as a condition of employment, the rules of that fund must provide for members who leave the service of a participating employer before retirement to become paid-up members. |
| (b) | When members leave the service of a participating employer before retirement, such members─ |
| (i) | must be made paid-up members of the fund until the fund is instructed by the member, in writing, to pay out or transfer the benefits due to the member in terms of the rules, and |
| (ii) | must be presented with a paid-up membership certificate within two (2) calendar months of the fund becoming aware that the member has left the services of the participating employer. |
| (c) | Investment fees and charges in respect of the portion of retirement savings that is invested in the default investment portfolio may not differ on the basis of whether members are paid-up members or are still in the service of the participating employer. The administration fees for paid-up members must be fair, reasonable and commensurate with the cost of providing the administration service to members still in the service of the participating employer. |
| (d) | No initial once-off charge may be levied on the retirement savings of a member as a direct consequence of that member becoming a paid-up member. |
| (e) | The rules of funds to which a member belongs as a condition of employment must make provision to accept any amount or amounts transferred, to the fund from another fund for the benefit of a member or members, provided that such transfers comprise a defined contribution benefit component, and such funds must— |
| (i) | within four (4) months of a member joining the fund, request, in a manner which may be prescribed, a list of all paid-up membership certificates in respect of any retirement savings of that member; |
| (ii) | request, for each paid-up membership certificate, in a manner which may be prescribed, whether members wish to allow the retirement savings held in respect of each paid-up membership certificate to be transferred into the new fund; and |
| (iii) | if a member elects to transfer their retirement savings, arrange on behalf of that member, in respect of each paid-up membership certificate, the transfer of all such retirement savings into the fund, without levying a charge on such amounts in respect of the transfer. |
| (2) | The fund rules must with respect to paid-up members specify that─ |
| (a) | no new contributions to the fund may be permitted in respect of this class of member; |
| (b) | no deductions may be made from the retirement savings of paid-up members in respect of risk benefits; |
| (c) | upon the member becoming paid-up, a defined benefit amount, must be converted to a defined contribution component and have it preserved as such; |
| (d) | eligibility for death benefits, retirement and early retirement for paid-up members is as per fund rules; and |
| (e) | members are given access to retirement benefits counselling before any such withdrawal benefit as determined in the fund rules is paid to them or any transfer is made to another fund. |
| (3) | The Registrar may on written application by a fund or in general, exempt a fund, or categories, types or kinds of funds, from all or any of the provisions of these regulations, subject to conditions that the Registrar may impose. |
[Regulation 38 inserted by regulation 2(1) of Notice No. 863 of 2017]
