FSC must register as a trustee in the case of a company, an applicant which meets all the fit and proper criteria.
In the case of an applicant who is an individual, all the fit and proper requirements must be met save for the requirement that the applicant must have knowledge and experience in the business of superannuation funds and retirement schemes.
Every administrator, IM and corporate trustee must appoint a responsible officer (“RO”) within their company.
RO must then within thirty days apply to FSC to be registered as RO.
RO must do everything required:
in the case of an administrator, for the general administration of the scheme including the keeping of records and accounts;
in the case of an IM, for the management of the funds of the scheme in accordance with the Act and regulations including ensuring that prescribed asset investment ratios are met and reporting to the FSC on compliance.
Failure to appoint RO = offence and where no RO is registered FSC has duty to register as RO the MD or where there is no MD, the person in Jamaica who carries out functions of MD and if no such person then person appearing to the FSC to be primarily in charge of the company’s affairs.
Payment to member who voluntarily retires not to commence earlier than ten years prior to specified normal retirement age of fund
SF must satisfy prescribed minimum funding and solvency requirements
Subject to what appears below, pension rights shall not be commuted or surrendered and shall be non-assignable save for a member allocating a portion to his spouse or dependent;*
Lump-sum payment may be made as follows:*
On death of member in an amount not exceeding two years salary or wages or an amount representing the actuarial value of member’s interest in the fund, whichever is greater ;
On termination of employment other than by death or retirement, a refund of member’s accumulated contributions along with interest and an amount equivalent to appreciation in value of investment units (if any) allocated to the contributions ;
On retirement, an amount not exceeding the commuted value of ¼ of accrued pension up to maximum of 12½ times ¼ of the pension before commutation;
Similar requirements as for SF however there are some differences.
E.g. – (i) Members must be self-employed or employed in non-pensionable post and do not contribute to a SF or other RS.
(ii) Annual rate of contribution of member not to exceed 20% of his/her annual income or emoluments.
Must state a normal retirement age between sixty and sixty-five years (not specifically included in list of requirements for registration (s. 13(1)) but included in miscellaneous provision s. 33(1)).
Suspension or Cancellation of Registration or Licence
FSC has right to suspend or cancel the registration of a trustee or the licence of an administrator or IM.
Act sets out procedure for suspension. For example, notice must be given:
(i) stating reasons for suspension and right to appeal to Appeals Tribunal established under FSC Act;
(ii) requiring the person notified to remedy breach within specified time;
(iii) specify a period which the person may make written or oral representations to FSC.
Suspension or Cancellation of Registration or Licence cont’d
Required procedure for cancellation of licence or registration:
Notice must given by FSC stating that it proposes to cancel the licence or registration as the case may be;
Notice must state the reason for proposed cancellation;
Notice must state the right of appeal to Appeals Tribunal.
Grounds for Suspension or Cancellation of Registration or Licence
Registration or Licence may be suspended if there is a breach of any provision of Act or regulations or if circumstance exist which would give rise to any of the specified grounds for cancellation (see below).
Specified grounds for cancellation include:
Licence or registration was procured by misleading or false representation in a material particular or as a result of any incorrect information whether the information or not representation was wilfully provided;
Trustee, or any of the persons in relation to an administrator or IM who are required to satisfy the fit and criteria no longer satisfy that criteria and have not been removed from office;
Grounds for Suspension or Cancellation of Registration or Licence cont’d
Administrator, IM or trustee is carrying on the business of the scheme otherwise than in accordance with sound pension principles or practice;
Unreasonable delay in payment of a pension of benefit;
Administrator, IM or trustee without reasonable excuse has failed for a period of 30 days after the due date to provide the FSC with information which is required to be provided under the Act;
Administrator, IM or trustee has been “ found guilty ” of fraudulent or dishonest practice;
Administrator, IM or trustee has or has been an accessory to a contravention of any provision of the Act or regulations or any condition, direction or requirement imposed by the FSC in accordance with the Act;
The breach which has given rise to a suspension has not been remedied in the time allowed by the FSC.
FSC, being the regulator of the industry, has wide powers to ensure compliance with the provisions of the Act and Rules and to investigate the activities of a scheme including the power require the provision of information.
If FSC is able to satisfy RM (as opposed to JP) that there are reasonable grounds for suspecting that there are on any premises, specified information which was legally requested by but not provided to the FSC, the RM may issue a search warrant.
Warrant allows for entry and search of premises and seizure and removal of books, accounts, documents and statistics.
Items seized must be returned within two months of seizure unless criminal proceedings have been brought in relation to the seizure and then upon conclusion of proceedings.
During the period of winding-up and until all the assets of fund have been distributed, a scheme shall be subject to the provisions of the Act – e.g. the licences and registration of administrators IMs and trustees must be kept current and a RO must be kept in place.
“ Before the winding up of an approved superannuation fund , any outstanding contributions payable by a member or a sponsor and all contributions which were not paid over to the IM and any other amount which is due or payable to the fund or scheme , as the case may be, shall be paid to the trustee or provisional trustees on behalf of the fund or scheme .”
Any outstanding contributions (whether of the sponsor or the members) not paid over in the case of a SF shall be deemed to be a debt of the sponsor and shall rank pari passu with employee emoluments .
On a winding-up all active members of the scheme are deemed to be vested irrespective of age, period of membership or period of employment.
If after discharging all the liabilities of scheme a surplus exists, trustees must employ actuary to verify amount of surplus and forward copy of verification to FSC along with proposed scheme of distribution.
FSC shall, having regard to minimal guidelines set out in Act, approve scheme of distribution with or without amendments.
Trustees bound to distribute surplus in accordance with scheme of distribution as approved by FSC.
Note that FSC would have previously approved deed and rules which may have already contained provisions for distribution of surplus.
FSC therefore has power to override provisions of deed and rules on issue of distribution of surplus.
Scheme must state mandatory retirement age between sixty and sixty-five years.
Every administrator, IM, sponsor and trustee required to keep and make available to FSC all records relating scheme. Failure to keep records = offence – liable to summary conviction and fine not exceeding $1M.
Trustees must submit to FSC Certified Financial Return relating to scheme within ninety days of end of financial year of scheme and such other report as my be prescribed.
Maximum Penalty Performing duties as administrator or IM w/o being licensed $5M Performing duties as trustee w/o being registered $2.5M Sponsoring unregistered SF or RS $5M Failure by administrator, IM, trustee or RO who fails to make returns to FSC in time required (e.g.. Certified Financial Return) $1M in case of individual who is trustee or RO $2M in case of body corporate Failure by administrator, IM, sponsor or trustee to provide FSC with information within time required or upon request $500K
Maximum Penalty Failure by administrator, IM or trustee to keep required records $1M Knowingly filing incorrect returns with FSC - administrator, IM, trustee or RO $1M or 12 months in case of individual $2M in case of body corporate Failure by administrator or RO to notify FSC of a person ceasing to hold post of RO in required time $500K Failure by sponsor to pay over to IM, contributions deducted from salaries or wages of members within 14 days of end of month in which deduction is made $3M