FSCA moves to ensure pension fund board members are up to the task

The Financial Sector Conduct Authority (FSCA) has published a draft conduct standard for determining the skills and training requirements for board members of pension funds. Comments are required by July 4.

The standard seeks to prescribe the minimum skills and training requirements for board members of funds as contemplated in the Pension Funds Act, which requires that trustees (board members) of pension funds attain the levels that may be prescribed by the FSCA within six months of being appointed to such position – and that they maintain their skills and training throughout their term of appointment.

The draft proposes that board members use the Trustee Training Toolkit provided by the FSCA, which includes two types of assessment:

1. Tutorials, case studies and initial assessments that are completed online and should pose no financial hardship on any trustee obtaining certification, and
2. A final assessment to verify that the board member has done the training that must be completed under the supervision of the principal officer or board chair to ensure that it is completed without assistance. There may be a cost involved with respect to the time spent by board members in doing this final assessment.

The FSCA says the toolkit has been designed with the aim of developing skills and providing training. It is not a qualification with a pass or fail outcome, and allows trustees to do the necessary within a reasonable period.

The toolkit will provide board members with basic knowledge of the legislative requirements and information on fund governance, the responsibilities and obligations of board members towards the fund and its members, and guidance on what fit and proper conduct is deemed to be.

Board members who attain certification will be required to complete additional modules as and when these are added to the toolkit by the FSCA.

The draft conduct standard proposes that:

• It take effect on January 1, 2020
• Board members appointed before this date be required to attain the certification by June 30, 2020
• Board members who successfully complete the toolkit certification before January 1, 2020 not be required to do so again, and
• A person who has successfully completed the toolkit certification and is subsequently appointed to the board of a fund not be required to complete the certification again.

In the event that a board member is unable to complete the toolkit within the prescribed time, they may apply to the FSCA for an extension.

Submissions on the draft standard can be submitted in writing on or before July 4, 2019 to the FSCA at [email protected]. 

Michelle David and Amina Yuda are from Norton Rose Fulbright.