Regulation 28: what every retirement fund trustee should know

What Regulation 28 is

Regulation 28 of the Pension Funds Act sets out how South African retirement funds may invest their members’ savings. It places limits on exposure to different asset classes and issuers, with the aim of protecting members from excessive concentration and imprudent risk.

But Regulation 28 is more than a list of limits. Its principles require boards to invest prudently, to understand the risks they take, and to act in the best interests of members.

Principles, not just percentages

• Investment policy statement. Funds are required to have an investment policy statement, reviewed regularly by the board.
• Understanding risk. Trustees should understand the assets their fund holds and the risks attached to them — including liquidity, concentration and counterparty risk.
• Sustainability. Boards are expected to consider factors that may affect the long-term performance of assets, including environmental, social and governance (ESG) factors.

Compliance with the limits is the minimum. Prudence is the standard.

The trustee’s duty to learn

The Pension Funds Act places fiduciary duties on board members and requires them to attain appropriate levels of skills and training. The FSCA provides foundational resources such as its Trustee Toolkit, and boards often supplement these with practical training on investment governance.

Responsible investing and CRISA

The Code for Responsible Investing in South Africa (CRISA) sets out voluntary principles for institutional investors and their service providers on integrating sustainability into investment decisions, stewardship and transparency. Our institutional ESG integration is aligned with CRISA and global ESG standards.

Our Academy offers trustee programmes covering investment governance, fiduciary duties and Regulation 28 in practical, board-ready terms.