The FSCA has identified areas of improvement in its monitoring and supervision of historic curatorship and has adopted a new approach in that regard:

• Curators are required to submit monthly invoices, with supporting schedules to the Authority, inclusive of the corresponding month’s bank statements of the retirement fund. The invoices, supporting schedules and bank statements are reviewed, and queries are raised if and where necessary. Curators have to wait for the Authority to formally approve their fees, by way of formal correspondence prior to effecting payment. This is also verified by analysing the retirement fund’s bank account, to ensure payment of the curator’s fees was only processed following the Authority’s approval;
• Curators are also required to report to the Authority regularly, by submitting monthly or bi-monthly feedback reports;
• The Authority requests meetings with a curator at least quarterly; and
• Where the Authority appoints a curator(s), either by application to court (in terms of section 5(a) of the FI Act) or by agreement with the retirement fund (in terms of section 5(10) of the FI Act), the monthly fees that may be charged by the curator(s) are capped.

So far, the new approach set out above has proven effective in ensuring that curators discharge their duties efficiently and within the ambit of legislation.

The FSCA is cognisant of the stigma surrounding curatorship and it considers curatorship as a last resort after all other statutory interventions have failed to address non-compliance within a fund.

The FSCA has and continues to utilise section 5A of the FI Act, which provides for the appointment of a statutory manager, by agreement with a financial institution/retirement fund and without the intervention of a court, if it appears that the fund has in material respect, failed to comply with a law; is likely to be in an unsound financial position; or is maladministered.

The FSCA considers the appointment of a statutory manager as a valuable regulatory tool of intervention, which is not considered as adverse as a curatorship. Furthermore, the appointment of a statutory manager is to protect the interests of clients of the financial institutions; the safety and soundness of financial institution(s) in general; and or the stability, fairness, efficiency and orderliness of the financial system overall.

The appointment of statutory managers by mutual agreement promotes cooperation between the retirement fund and the FSCA, whose primary objective is to act in the best interest of members of a retirement fund.

That said, it should be noted however, that proposed changes to legislation will enable the FSCA to appoint a statutory manager without agreement with the retirement fund.

Statutory management has proven an effective way to address non-compliance by a retirement fund. Should a disagreement exist between the board of the retirement fund and the statutory manager, Section 5A(4)(b) of the FI Act, as a remedy, provides for a statutory manager to have a casting vote.

A key and required responsibility of a statutory manager includes reporting to the FSCA monthly or bi-monthly, citing progress made in regularising the affairs of the retirement fund and any other matters considered material.

Following thorough analysis of challenges faced by the retirement fund, statutory managers are also requested by the Authority to make recommendations as to whether or not a retirement fund should be placed under curatorship.

Statutory managers are remunerated on an hourly rate or alternatively at a capped monthly fee and this forms part of their appointment letter.

To date and since 2017, the FSCA has appointed four Statutory Managers and continues to evaluate its processes for the benefit of all stakeholders.