South African pension funds that are registered under the Pension Funds Act (Act 24 of 1956, PFA) are regulated in terms of the PFA by the FSB. In 2011 the Minister of Finance published new regulations prescribing the prudential investment limits applying to pension funds. These investment limits are commonly referred to as Regulation 28. The regulation addresses the registration, incorporation, regulation and dissolution of pension funds. The board of trustees of a pension fund has a fiduciary responsibility to act in the best interest of the members of the fund, whose benefits depend on the responsible management of the pension fund’s assets. A pension fund may only invest in the kinds of assets specified in Regulation 28, and within the relevant issuer and aggregate limits that are defined per asset class. A pension fund must disclose and report on the underlying assets to which it has economic exposure. The Public Investment Corporation (PIC), principal asset manager for South Africa’s public sector including the Government Employees Pension Fund, actively promotes environmental, social and governance issues (including disclosure) in the South African market.
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