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
(4) All the assets of a licensed fund, including
any policy of insurance, shall be controlled and held in the name of-
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 fund from making investments of a certain class or description;
any one or all funds to realise the whole or part of a particular investment
within a specified period;
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-
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
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;
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
(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-
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
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
(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
(9) In this section-
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;
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;
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-
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
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-
the scheme, either unconditionally or subject to such conditions as he thinks
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-
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;
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).