PENSION SCHEME REGULATION ACT
Arrangement of Sections
Section
PART I
PRELIMINARY
1. Short title
2. Application
3. Interpretation
PART II
THE PENSIONS AND INSURANCE AUTHORITY
4. Establishment of Authority
5. Functions of Authority
6. Constitution of Board
7. Registrar
PART III
REGISTRATION OF PENSION SCHEMES
8. Registration of Pension Schemes
9. Application for registration
10. Grant of certificate of registration
11. Creation of fund
12. Application of fund
13. Conditions of certificate of registration
14. Duration of certificate
15. Register of Pension Schemes
16. Use of Register in evidence
17. Inspection of Register
PART IIIA
REGULATION OF MANAGERS AND OTHERS
17A. Management etc of pension fund
17B. Qualification of manager, administrator or custodian
17C. Principal office
17D. Appointment of chief executive officer
PART IV
PRUDENTIAL REGULATIONS AND SUPERVISION OF PENSION SCHEMES
18. Conditions of compliance of Pension Schemes
19. Appointment of Actuary
20. Qualification of Actuary
21. Actuary rights and duties
22. Accounts and Audits
23. Appointment of auditor
24. Investment policy
25. Investment of funds
26. Returns
27. Institution of legal proceedings
28. Unsafe and unsound practices
29. Examination of fund by Registrar
29A. Imposition of levy
30. General obligation of manager
30A. Penalty for late remittance of pension contributions
31. Protection against attachment
32. Liability insurance
PART V
DE-REGISTRATION AND APPEALS
33. De-registration
34. Notification
35. Rights of contributors
36. Powers of Registrar if assets insufficient
37. Appeals
PART VI
MISCELLANEOUS
38. General guidelines
39. Appointment of inspectors
40. Powers of inspectors
41. Obstruction of inspectors
42. General penalty
42A. Inspector to furnish report
43. Exemption from Banking and Financial Services Act
44. Transitional provisions
44A. References to Registrar
44B. Vesting of assets of Registry Office
44C. Registration of property to be transferred by Government
44D. Legal proceedings
44E. Staff of Registry Office
45. Tax exemptions
46. Regulations
AN ACT
to establish the Pensions and Insurance Authority and define its functions and powers; to provide for the prudential regulation and supervision of pension schemes; and to provide for matters connected with or incidental to the foregoing.
[Long title subs by s 2 of Act 27 of 2005.]
[21st February, 1997]
Act 28 of 1996,
Act 10 of 2000,
Act 27 of 2005,
Act 28 of 2022,
SI 27 of 1997,
SI 51 of 2006.
[General Note— Section 4 of the Act 28 of 2022 deleted the words "pension plan rules" wherever they appeared in the Act and substituted them by the words "pension scheme rules".]
PART I
PRELIMINARY
This Act may be cited as the Pension Scheme Regulation Act.
This Act shall apply to any institution or company that establishes or manages a pension scheme except the National Pension Scheme established under the National Pension Scheme Act.
In this Act, unless the context otherwise requires—
"administrator" means a company or institution registered under this Act whose business includes—
(a) undertaking, pursuant to a contract or other arrangement the management and day to day administration of the fund; or
(b) providing consultancy and secretarial services to the scheme funds;
[Ins by s 3(a) of Act 27 of 2005.]
"Authority" means the Pensions and Insurance Authority established by section 4;
[Ins by s 3(a) of Act 27 of 2005.]
"Board" means the Pensions and Insurance Authority Board constituted under section 6;
[Ins by s 3(a) of Act 27 of 2005.]
"Chairperson" means the person appointed as Chairperson of the Board under section 6;
[Ins by s 3(a) of Act 27 of 2005.]
"committee" means a committee of the Board established under paragraph 5 of the Schedule;
[Ins by s 3(a) of Act 27 of 2005.]
"custodian" means a company which is incorporated under the Companies Act and which holds a banking licence issued under the Banking and Financial Services Act and is registered under this Act;
[Ins by s 3(a) of Act 27 of 2005.]
"Deputy Registrar" means the Deputy Registrar appointed under section 6;
"Fidelity Fund" means the Fidelity Fund established by section 109 of the Insurance Act;
[Ins by s 3(a) of Act 27 of 2005.]
"fund" means the total assets of a pension scheme;
"member" means a member of the Board or a committee of the Board;
[Ins by s 3(a) of Act 27 of 2005.]
"manager" means a company or institution registered under this Act whose business includes—
(a) undertaking, pursuant to a contract or other arrangement the management of the funds and other assets of a scheme fund for purposes of investment; or
(b) providing professional services on the investment of the scheme funds; or
(c) reporting or disseminating information concerning the assets available for investment of scheme funds
[Subs by s 3(c) of Act 27 of 2005.]
"Multi-employer trust" means the legal entity established by a group of employers into which all contributions, investment earnings, surpluses and other moneys are accumulated on behalf of members of a pension scheme or an entity which allows affiliation by any established pension scheme for the purposes of pooling resources for investments;
[Am by s 3(b) of Act 27 of 2005.]
"pension scheme" means any scheme or arrangement, other than a contract for life assurance, whether established by a written law for the time being in force or by any other instrument, under which persons are entitled to benefits in the form of payments, determined by age, length of service, amount of earnings or otherwise and payment primarily upon retirement, or upon death, termination of service, or upon the occurance of such other event as may be specified in such written law or other instrument;
[Subs by s 3(d) of Act 27 of 2005.]
"pension scheme rules" means the regulations which shall be issued by each pension fund and which shall be distributed to each member;
[Am by s 4 of Act 28 of 2022.]
"register" means the Register of Pensions established under this Act;
"Registrar" means the person appointed as Registrar under section 7;
[Ins by s 3(a) of Act 27 of 2005.]
"Registry Office" means the Registry Office for pension funds established as a Government department under the Ministry responsible for finance and national planning for the purposes of this Act;
[Ins by s 3(a) of Act 27 of 2005.]
"single-employer trust" means a legal entity established by a single employer into which contributions, investment earnings, surpluses and other moneys are accumulated on behalf of members of a pension scheme established pursuant to this Act;
[Ins by s 3(a) of Act 27 of 2005.]
"trust" means the legal entity, separate from the employer, in which the pension scheme funds are accumulated and includes a multi-employer trust or a single-employer trust.
[Subs by s 3(e) of Act 27 of 2005.]
PART II
THE PENSIONS AND INSURANCE AUTHORITY
[Part II subs by s 4 of Act 27 of 2005.]
(1) There is hereby established the Pensions and Insurance Authority which shall be a body corporate with perpetual succession and a common seal, capable of suing and of being sued in its corporate name, and with power, subject to the provisions of this Act, to do all such acts and things as a body corporate may by law do or perform.
(2) The provisions of the Schedule shall apply to the Authority.
[S 4 subs by s 4 of Act 27 of 2005.]
(1) The functions of the Authority shall be to—
(a) register and deregister pension schemes in accordance with this Act and in consultation with the minister responsible for labour and social security;
(b) register and deregister managers, administrators and custodians of pension schemes;
(c) regulate and supervise the establishment and management of occupational pension schemes and insurance businesses;
(d) protect the interests of members and sponsors of occupational pension schemes, and of shareholders and policy holders;
(e) licence re-insurers, insurers, insurance brokers, insurance agents, loss adjustors, loss assessors, claims agents and insurance risk surveyors;
(f) administer and manage the Fidelity Fund established pursuant to section 109 of the Insurance Act and settle claims against that Fund;
(g) formulate and enforce standards in the conduct of the business of insurance with which a member of the insurance industry must comply;
(h) monitor the solvency of insurers and ensure the observance of sound insurance principles and practices by the insurers in the conduct of insurance business;
(i) monitor and periodically review premium rates and scope of cover of policies that provide insurance cover in satisfaction of a legal requirement;
(j) in consultation with the Competition Commission, formulate and implement measures calculated to encourage healthy competition and eliminate unfair practices in the insurance and pensions industries;
(k) advise the Minister and the Minister responsible for Labour and Social Security in policies relating to the pensions and insurance industries;
(l) advise the Government on adequate insurance protection of national assets and properties;
(m) implement policies relating to the insurance and pension industries;
(n) promote the development of the insurance and pensions industries;
(o) set and enforce standards for the conduct of the business of insurance and occupational pension schemes; and
(p) undertake such other activities as are conducive or incidental to the performance of its functions under the Act;
(2) Notwithstanding sub-section (1), the Board may, by direction in writing and subject to such conditions as it considers fit, delegate to any member, committee or the Registrar any of its functions under this Act.
[S 5 subs by s 4 of Act 27 of 2005.]
(1) There is hereby constituted the Pensions and Insurance Authority Board which shall, subject to the provisions of this Act, perform the functions of the Authority under this Act.
(2) The Board shall consist of the following part-time members appointed by the Minister—
(a) a representative of the Ministry responsible for finance;
(b) a representative of the Ministry responsible for labour and social security;
(c) a representative of the Bank of Zambia;
(d) a representative of the Zambia Association of Chambers of Commerce and Industry;
(e) a representative of the Attorney-General;
(f) a representative of the Zambia Institute of Certified Accountants;
(g) a representative of the Zambia Federation of Employers;
(h) a representative of a trade union representing workers in the insurance or pensions industry; and
(i) one other person who shall have expertise in the administration of pension funds, insurance or actuarial matters.
(3) The members referred to in sub-section (2) shall be nominated by their respective organisations or ministries.
(4) The Chairperson and the Vice-Chairperson shall be appointed by the minister from among the members of the board.
(5) A person shall not be appointed as a member of the Board if the person—
(a) is an undischarged bankrupt;
(b) has been convicted of an offence involving fraud or dishonesty; or
(c) has been convicted of an offence under any other written law and sentenced to a term of imprisonment of not less than six months, without the option of a fine.
[S 6 subs by s 4 of Act 27 of 2005.]
(1) The board shall, with the approval of the Minister, in consultation with the Minister responsible for labour and social security appoint a Registrar who shall be the chief executive officer of the Authority and who shall, subject to the control and direction of the Board, be responsible for the implementation of the decisions of the Board and the day to day administration of the Authority.
(2) A person shall not be qualified for appointment as Registrar unless the Minister is satisfied that the person has qualifications and experience in actuarial analysis, business management, law or accounting.
(3) The Board shall, with the approval of the Minister, determine the terms and conditions of service of the Registrar.
(4) The Registrar shall attend meetings of the Board and may attend meetings of any committee of the Board and may address the meetings, but shall have no vote.
(5) The Registrar shall, subject to the direction of the Board—
(a) ensure that the pension fund is established in form of a single-employer trust or multi-employer trust separate from the employer's business;
(b) ensure that the pension scheme is laid down in pension scheme rules covering the contribution formula, all the benefits, type of plan, options provided and deadlines for choosing, calculation of portability rights and member's rights for participation in the management of the pension fund;
(c) examine the certificate of incorporation of the trust;
(d) ensure that an auditor and an actuary are appointed in accordance with this Act;
(e) examine the annual accounts, the report of the manager of pension fund and the auditor's report;
(f) examine the actuarial evaluation and ensure it is done periodically according to this Act;
(g) ensure that re-insurance arrangements are entered into in accordance with the actuary's recommendation;
(h) ensure that, in the case of a multi-employer trust, a written affiliation agreement exits, which adequately protects the pension fund's rights, the members’ rights and the portability of accrued rights;
(i) enforce any conditions imposed under this Act on a pension fund, trust or the manager, administrator or custodian of such a fund or trust;
(j) direct insurers and re-insurers on the standardisation of the contracts of compulsory insurance;
(k) direct an insurer or re-insurer where the Registrar is satisfied that the contract of insurance issued by the insurer or re-insurer is obscure or contains ambiguous terms or terms and conditions which are unfair or oppressive to the policy-holders, to clarify, simplify, amend or delete the wording, terms or conditions, as the case may be, in respect of future contracts; and
(l) exercise and perform such other powers and functions as may be conferred on the Registrar by or under this Act and the Insurance Act.
(6) The Registrar, shall at all times—
(a) protect the rights, benefits and other interest of the members in accordance with their corresponding pension scheme; and
(b) monitor the viability of a pension scheme and ensure that a pension scheme is operating on sound financial and actuarial principles.
[S 7 subs by s 4 of Act 27 of 2005.]
PART III
REGISTRATION OF PENSION SCHEMES
8. Registration of Pension Schemes
(1) A person shall not establish a pension scheme except in accordance with this Act and under the authority of a certificate of registration of a pension scheme issued under this Act.
[S 8(1) am by s 5(a) of Act 27 of 2005.]
(2) Every pension scheme, other than a scheme established by a written law, shall be established under an irrevocable trust.
[S 8(2) ins by s 5(b) of Act 27 of 2005.]
(3) Subject to sub-section (2) the rules of the scheme or fund shall make provision for—
(a) the manner of appointment or election of trustees and their term of office;
(b) the functions, powers and duties of the trustees which shall include the general supervision and administration of the scheme or fund;
(c) the number of trustees of whom one-half shall be appointed or elected by the members and the remainder shall be appointed by the sponsoring employer,
(d) the methods of, and ground for, removal from office of trustees;
(e) the election and appointment of a chairperson of the Board of trustees and the functions, powers and duties of such chairperson:
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