MASERU – Legal action will be taken against entities or persons who fail to comply with the Pension Fund Registration and Licensing Regulations of 2020 which came into effect in March. The regulations require that all pension funds, administrators or intermediaries operating in the country be licensed.
These regulations, according to the Central Bank of Lesotho (CBL), set out the requirements for registration of pension funds and service providers in the pensions industry, and prescribe the steps to be followed, including the forms to be filled for registration.
“The Pension Fund Act, 2019, was published on November 15, 2019, and came into force on the said date of its publication as per Section 1 of the Act. However, it is important to note that, in terms of Section 80 of the Act, a transition period of six months was granted for pension funds to register under the Act after its commencement.
“So in order to facilitate for and regulate registration of Pension Funds under the Act, Parliament published Pension Funds (registration and Licensing) Regulations of 2020,” CBL said last week.
Since the industry will now be regulated post-transition date of March 12, the regulator emphasised, there is need for compliance be all regulated entities under the Act.
“Actions will be taken as provided in the Act and Regulations. In particular, Section 71 of the Act makes provision for offences and penalties for persons who will fail to comply with the Act,” the CBL also showed.
Section 71 of the Act provides that a person who contravenes or fails to comply with any provision of this Act or any regulation may be liable to an administrative fine as may be imposed by the regulator.
A person may, upon conviction, be liable to a fine not exceeding M5 million or to imprisonment for a term not exceeding three years or both. The Act shall apply to all pension funds in Lesotho. The CBL revealed that in cases where an entity has its own regulations, both laws complement each other.
“Both laws complement each other. This means, they both equally apply to protect the interests of contributors. In this regard, Section 3(1) of the Act, provides that, the Act will apply to all pension funds in Lesotho,” explained the CBL.
Section 3(2) of the Act provides that, where a pension fund is subject to the provisions of any other law specifically applicable to such pension fund, the provisions of this Act which would otherwise apply to such pension fund shall not apply wherever those provisions would be inconsistent with any such law.