Key Benefits:
PART IV
Financial Requirements (ss 15-19)
[Ch2703s15]15. Accounts and holding of assets
(1) Every licensed fund shall maintain such books of account and other records as may be necessary for the purposes of the fund.
(2) A licensed fund shall, within six months after the end of its financial year, submit to the Registrar audited accounts and such other statements and reports as may be prescribed.
(3) If the Registrar is not satisfied with any audited accounts, statements or report submitted in terms of subsection (2), he shall reject the document or documents concerned and direct the fund to provide such explanation or do such other thing as he thinks fit, and the fund shall, within two months of receiving any such direction, comply with the terms thereof.
(4) All the assets of a licensed fund, including any policy of insurance, shall be controlled and held in the name of-
(a) the fund; or
(b) a nominee which is a company registered under the Cap. 46:04 Banking Act.
[Ch2703s16]16. Investigations by actuary
(1) Subject to the provisions of this section, a licensed fund shall cause its financial condition to be investigated and reported upon by an actuary at such period and in such manner as may be prescribed and shall, within one month of receiving any report from the actuary, submit a copy thereof to the Registrar.
(2) An actuarial report in terms of subsection (1) shall be lodged with the fund within one year of the date specified in that report as the actuarial valuation date.
(3) If the Registrar is satisfied that the financial methods adopted by a licensed fund are such as to render periodical investigations by an actuary unnecessary, he shall, if so requested by the fund in writing, exempt the fund from compliance with the provisions of subsection (1), subject to such conditions as he thinks fit.
(4) The Registrar may at any time vary any conditions fixed in terms of subsection (3) or cancel any exemption granted in terms of that subsection.
(5) A licensed fund shall be exempted from compliance with the provisions of subsection (1) if the rules thereof provide for the payment of a lump sum benefit, based on a return of contributions with interest and a share of profits, which may be applied to the purchase of a pension from an insurer.
(1) Except with the prior express consent in writing of the Registrar, no fund shall invest or otherwise lend moneys belonging to the fund outside Botswana.
(2) The provisions of subsection (1) shall not apply in relation to an external fund which has less than 10 Botswana members.
(3) Except with the prior express consent in writing of the Registrar no fund shall borrow monies in excess of 25 per cent of the current value of its assets.
(4) Where any fund acts in contravention of subsection (3) every director, manager, controller and principal officer shall be and continue to be personally liable to pay such excess until such time as the total borrowings of the fund are reduced to the permissible level.
[Ch2703s18]18. Minister may regulate investments
(1) The Minister may by regulation-
(a) prohibit a fund from making investments of a certain class or description;
(b) require any one or all funds to realise the whole or part of a particular investment within a specified period;
(c) require any one or all funds to invest such percentage not exceeding 55 per cent of moneys belonging to the fund or funds, as the case may be, accruing from contributions made in Botswana in Botswana Government securities or such other securities in Botswana as may be specified by him.
(2) An investment made under subsection (1) may prescribe different percentages of such funds to be invested according to whether the fund is a local or external fund.
(3) Subject to the provisions of subsection (7), no licensed fund shall invest, whether by way of loans or otherwise-
(a) more than five per cent of the aggregate value of its assets in Botswana in the business of a participating employer or of an associate of a participating employer:
Provided that the Registrar may exempt, either wholly or in part, any fund established by a local authority or a statutory body from the provisions of this subsection;
(b) its assets in any business referred to in paragraph (a) unless the return on such investment is reasonable and the investment is not prejudicial to the fund.
(4) A licensed fund may, if its rules so provide, grant to a member a loan secured by a first mortgage of immovable property on which a dwelling-house has been or is to be erected for the personal residence of the member:
Provided that the loan shall not exceed-
(i) the amount of the benefit to which the member would be entitled if he resigned voluntarily on the date on which the loan was granted, together with 50 per cent of the market value of the property; or
(ii) if the employer of the member guarantees the fund that he will meet any shortfall between the amount referred to in paragraph (i) and the market value of the property, the market value of the property.
(5) A licensed fund may, if its rules so provide, contribute to any other licensed fund that is conducted for the benefit of the employees of the first-mentioned fund.
(6) No licensed fund shall engage in or carry on-
(a) any business undertaking for which a licence is required in terms of the Cap. 43:02 Trade Act or the Cap. 43:11 Liquor Act; or
(b) any form of business not referred to in paragraph (a) unless the form of business has been prescribed for the purposes of this subsection or the Registrar has agreed in writing that such fund may carry on the business concerned and any terms and conditions fixed from time to time by the Registrar are complied with.
(7) Notwithstanding anything to the contrary in this section, if on the appointed day a fund is in contravention of the provisions of section 17 or subsection (3), (4) or (6) of this section, it shall be allowed a period of three years from the appointed day within which to comply with those provisions:
Provided that the Registrar may extend such three year period in any case where he considers that there are good reasons for so doing.
(8) The Minister may, by statutory instrument, order the Registrar himself to take or require a fund to take such action as appears to the Registrar appropriate to protect the members of the fund against the risk that the fund is, in the opinion of the Minister, being mismanaged, or may be unable to meet its liabilities or fulfil the reasonable expectation of its members.
(9) In this section-
(a) "assets in Botswana", in relation to any fund, means the amounts paid to that fund after the appointed day in respect of Botswana members (including, in the case of an existing fund, the assets of that fund which were realisable in Botswana on the appointed day) less the amounts paid on or after the appointed day from that fund in Botswana currency in respect of Botswana members and former Botswana members, with the income and profits and losses derived from the amounts so paid to that fund and such assets;
(b) "market value", in relation to immovable property referred to in subsection (4), means the market value of the property concerned at the time of the grant of the loan in terms of that subsection or, if a dwelling-house is to be erected on that property or has been erected but is to be improved, at the time of the completion of the erection or improvement, as the case may be;
(c) "statutory body" means any body established directly by a law in force in Botswana for the purposes specified in that law.
[Ch2703s19]19. Fund in unsound financial condition
(1) If, after examining any return or report in terms of this Act in respect of a licensed fund, the Registrar is of the opinion that the fund is not in a financially sound condition and a satisfactory scheme for bringing the fund into a sound financial condition within a reasonable time has not been submitted to him-
(a) the Registrar shall direct the fund to submit a scheme setting out arrangements for the purpose of bringing the fund into a financially sound condition within a period which he considers to be reasonable in the circumstances; and
(b) the fund shall deposit such scheme with the Registrar within three months from the date directed by the Registrar in terms of paragraph (a), together with a report on the scheme by the actuary or, if in terms of section 14 the fund has not appointed an actuary a report on the scheme by the auditor.
(2) After considering a scheme deposited in terms of subsection (1), the Registrar may-
(a) approve the scheme, either unconditionally or subject to such conditions as he thinks fit; or
(b) reject the scheme, in which case the fund shall submit a new scheme in accordance with the directions of the Registrar, together with a report thereon by the actuary or auditor who reported on the scheme which has been rejected.
(3) If the Registrar is of the opinion that the financial condition of a licensed fund is such that it is not possible or practicable to bring the fund into a financially sound condition within a reasonable time, he may direct that the whole or any part of the business of the fund shall be wound-up and that the provisions of section 10 shall apply, subject to such modifications as the Registrar considers it reasonable to impose in the circumstances.
(4) Notwithstanding any other law to the contrary, in the event of the liquidation or bankruptcy of a licensed fund-
(a) secured creditors shall have preference to the extent of the percentage each individual borrowing bore to the total assets of the fund at the time of the borrowing, up to the limit of the borrowing permitted under section 17;
(b) the members of a fund shall have preference against all claimants in the distribution of such assets of the fund as remain after the claims of secured creditors have been met under paragraph (a).
