Board of Trustees and Principal Officer
Every fund must appoint a management board to run the affairs of the fund. This is called the board of trustees. In addition, the fund must appoint a principal officer, to deal with the day-to-day running of the fund.
The objective of the board of trustees is set out in Section 7C of the Pension Funds Act. This section provides that the object of the board shall be to direct, control and oversee the operations of a fund in accordance with the applicable laws and the rules of the Fund. In pursuing its object, the board “shall take all reasonable steps to ensure that the interests of members in terms of the rules of the fund and the provision of this Act are protected at all times.”
Appointees to a board of Trustees thus require legal training. Board members with insufficient training expose the fund to the risk of regulatory non-compliance. This risk can be minimized by appointing dedicated professional trustees, as are typically available in an umbrella fund.
More about starting a retirement fund
- Legal structure: umbrella or stand-alone?
- Product: Pension or provident fund?
- Who should be eligible to join? Membership criteria
- How much should you contribute? Contribution rates
- Should you attach risk benefits to the fund?
- Who does what? Service providers
- Governance: Board of Trustees and Principal Officer
- Specifics: Fund rules
- Should you offer investment choice?
- Should you offer a preservation fund option?
