21 November 2022GABORONE - In line with the new Retirement Funds Act, 2022 and amendments to associated legislation, the Botswana Life Retirement Annuity Fund (BLRAF) will be implementing the applicable changes to align with the new legislative developments. These changes include, but are not limited to:1. Ease of access to residual funds in instances where a Deferred Member has: Defaulted on non-mortgage loans owed - the amount which can be accessed to pay for loans is increased from the current one third to 100% of pension, provided the pension can cover the whole amount of the loan.Defaulted on mortgage loans owed - allowing access to deferred pension to repay mortgage loans for principal homes. Become terminally ill and must pay for medical expenses - this is also a new provision, which will allow access of deferred pension to pay for medical bills in respect of terminal ailments..2. Income Tax - Superannuation Funds Regulations: Increase in the amount of pension commutable – allowing you to give up part or all the pension payable from retirement in exchange for an immediate lump sum increases from the current one third of your pension to a maximum of 50%.Dissolution or full distribution of the pension estate of a deceased member by paying total benefits in cash to all beneficiaries or nominees.To increase the commutable amount when moving from one Pension Fund to another from the current BWP5,000.00 or 25 % to BWP25,000.00 or 25% whichever is higher: and To increase the minimum threshold to be encashed in full at retirement from the current pension of BWP5,000.00 per annum to BWP20,000.00 per annum.3. Revised Pension Funds Prudential RulesAllowing for equal balance between investments made by retirement funds - This allows for 50% onshore investments and 50% offshore investments. Previously, retirement funds could invest up to 70% offshore and at least 30% onshore..Said BLRAF Principal Officer, Mr. Duncan Hule, “The Botswana Life Retirement Annuity Fund was licensed in September 2019 ensuring compliance with relevant regulatory requirements and it will indeed continue to follow legislative changes prescribed by the enactment of the Retirement Fund Act, under the purview of NBFIRA.As with all changes within our industry, we will continue to maintain industry standards and follow all regulations set forth by the Botswana Government and Regulatory Authority, while ensuring that our members and stakeholders remain our priority in communicating changes.”The new Retirement Funds Act, 2022 aims to align the Retirement Funds Act with international best practice, address governance issues for funds and fund administrators, enhance the powers of the Regulatory Authority and liberalise encashment by deferred members. .“These changes, comes at an opportune period when many members are currently facing challenges due to the ongoing adverse economic conditions and implications of the COVID-19 pandemic. We remain devoted to promoting financial inclusion and educating our members and Batswana generally on the importance of building retirement savings and we continually remain prepared to advise members regarding the best options available to them for long-term financial security considering the current levels of retirement savings invested by each individual, so as not to destabilise their income earning potential. As the leading retail Retirement Annuity Fund in the country, we prioritize the long-term financial security of our members and their loved ones above all else. The amendments will indeed have a significant impact on the financial services industry, however through consistent efforts made by our team across all branches, we will continue members education initiative aimed at securing financially secure for the members and Batswana generally,” concluded Hule.ENDS.
21 November 2022GABORONE - In line with the new Retirement Funds Act, 2022 and amendments to associated legislation, the Botswana Life Retirement Annuity Fund (BLRAF) will be implementing the applicable changes to align with the new legislative developments. These changes include, but are not limited to:1. Ease of access to residual funds in instances where a Deferred Member has: Defaulted on non-mortgage loans owed - the amount which can be accessed to pay for loans is increased from the current one third to 100% of pension, provided the pension can cover the whole amount of the loan.Defaulted on mortgage loans owed - allowing access to deferred pension to repay mortgage loans for principal homes. Become terminally ill and must pay for medical expenses - this is also a new provision, which will allow access of deferred pension to pay for medical bills in respect of terminal ailments..2. Income Tax - Superannuation Funds Regulations: Increase in the amount of pension commutable – allowing you to give up part or all the pension payable from retirement in exchange for an immediate lump sum increases from the current one third of your pension to a maximum of 50%.Dissolution or full distribution of the pension estate of a deceased member by paying total benefits in cash to all beneficiaries or nominees.To increase the commutable amount when moving from one Pension Fund to another from the current BWP5,000.00 or 25 % to BWP25,000.00 or 25% whichever is higher: and To increase the minimum threshold to be encashed in full at retirement from the current pension of BWP5,000.00 per annum to BWP20,000.00 per annum.3. Revised Pension Funds Prudential RulesAllowing for equal balance between investments made by retirement funds - This allows for 50% onshore investments and 50% offshore investments. Previously, retirement funds could invest up to 70% offshore and at least 30% onshore..Said BLRAF Principal Officer, Mr. Duncan Hule, “The Botswana Life Retirement Annuity Fund was licensed in September 2019 ensuring compliance with relevant regulatory requirements and it will indeed continue to follow legislative changes prescribed by the enactment of the Retirement Fund Act, under the purview of NBFIRA.As with all changes within our industry, we will continue to maintain industry standards and follow all regulations set forth by the Botswana Government and Regulatory Authority, while ensuring that our members and stakeholders remain our priority in communicating changes.”The new Retirement Funds Act, 2022 aims to align the Retirement Funds Act with international best practice, address governance issues for funds and fund administrators, enhance the powers of the Regulatory Authority and liberalise encashment by deferred members. .“These changes, comes at an opportune period when many members are currently facing challenges due to the ongoing adverse economic conditions and implications of the COVID-19 pandemic. We remain devoted to promoting financial inclusion and educating our members and Batswana generally on the importance of building retirement savings and we continually remain prepared to advise members regarding the best options available to them for long-term financial security considering the current levels of retirement savings invested by each individual, so as not to destabilise their income earning potential. As the leading retail Retirement Annuity Fund in the country, we prioritize the long-term financial security of our members and their loved ones above all else. The amendments will indeed have a significant impact on the financial services industry, however through consistent efforts made by our team across all branches, we will continue members education initiative aimed at securing financially secure for the members and Batswana generally,” concluded Hule.ENDS.
