Complementary pensions (Voluntary)
Regulatory Framework
1. The FRA board of directors' decision number (101) of 2015 concerning the governance rules for private pension funds.
2. Law no. 54 for 1975 for Private Pension Funds.
3. Executive regulation of law no. 54 for 1975 and its amendments in 2005 and 2015.
4. The internal Regulations of the Fund.
B) Insurance Laws and regulations:
1. Law no. 72 for 2007 for compulsory insurance.
2. Anti-money Laundering Law No. 80 of 2002.
3. Law no. 10 for 1981 for insurance supervision and control in Egypt.
4. Executive regulation of law no. 10 of 1981.
5. Companies law no. 159 of 1981 and its executive regulation.
C) Capital Market Laws and regulations:
1. Capital market law no. 95 for year 1992 and its amendment in 2008 and 2018.
2. Executive Regulation of capital market law no. 95 for year 1992 and its amendment in 2018.
3. Investment law no. 72 for year 2017.
4. Executive regulations of investment law.
5. Presidential decree no. 191 of 2009 regulating the stock exchange.
6. Presidential decree no. 191 of 2009 regulating the stock exchange
7. Central Depository and registry law no. 93 for year 2000
8. Executive regulations of the Central Depository and registry law.
D) Mortgage finance laws and regulations:
1. Law no. 93 for 2018 on Social Housing and Mortgage Finance Support.
2. Law no. 148 for 2001 for the Real Estate Finance Law and its amendment on 2014.
3. The Executive regulations of law no. 148 for 2001 and its amendment on 2014.
4. The Advisory opinion of the Islamic Research Academy regarding Mortgage finance.
5. Law no. 88 of 2003 for the central bank of Egypt, the banking sector and money and its amendment on 2005.
E) Financial Leasing law and regulations:
1. Law no. 176 of 2018 regarding financial leasing.
F) Micro Finance law and regulation:
1. Microfinance Law no. 141 of 2014.
G) Other Regulations and Regulatory Decisions:
1. For year 2018, FRA Board of Directors issued 197 decision; 50 supervisory decisions, 74 regulating non- financial markets and 73 decision covering FRA internal issues.
2. Collateral Guarantees Law no. 115 of 2015.
3. Law 10 of 2009 Regulating Non-banking Financial Markets and Instruments.
4. President of the Republic's Decree No. 192 of 2009 for the Statute of the Financial Regulatory Authority.
5. Law No. 120 of 2008 for the Establishment of Economic Courts.
6. Law No. 146 of 1988 concerning companies operating in the field of receiving funds.
7. Listing and Delisting Rules, Membership Rules and Trading Rules in the Egyptian Stock Exchange.
8. Egyptian Guide for Corporate Governance.
9. Egyptian Accounting Standards.
10. Egyptian standards for auditing, limited examination and other assurance functions
Plan Profile
Plan sponsors
Types of plans
Institutional Framework
The Financial Regulatory Authority (FRA) supervises and reviews all the activities performed by Board of Directors and relevant committees (Audit Committee, Investment Committee, etc.) and makes sure that all parties are complied with the applicable laws and regulations mentioned in the Regulatory Framework section.
External Auditor:
The External Auditor is appointed at the General Assembly for fund Members and his main function is performing audit on the pension funds financial statements and make his reports.
The General Assembly for fund Members:
• The General Assembly consists of members who have fulfilled the obligations imposed on them by law and have been plan members for at least six months.
• The General Assembly is held once every year within the first three months following the end of the Fund's fiscal year to consider the following:
1. Financial position Statement.
2. Income and expenses statement.
3. Board of Directors reports.
4. Auditor's report.
5. Electing Board of Directors.
6. Appointing the external auditor and determine his fees.
7. Any other matters, which the Board of Directors deems to be included in the agenda.
Board of Director (BOD):
• They are the supreme authority in the management of the Fund's activities and they are separate from the sponsoring company.
• According to the law the BOD, consist of min. 5 members and max. 15 members.
• The BOD structure is chairperson, vice chair, Treasurer, operation manager, and other board members.
• They are responsible for complying with the law and provisions of the Articles of Association provisions to achieve the fund objectives.
• Putting and follow up fund's policies and ensure the good performance of both operation manager and investment manager; also, the board is responsible for hiring qualified investment manager.
• They sets out the plan for investing the Fund's money and establishing the internal control procedures necessary for managing the Fund.
Internal Control Committee:
This committee shall consist of at least three members of the Board of Directors and responsible for:
1. studying the internal audit system of the Fund.
2. preparing a written report of its observations and recommendations.
3. establishing corrective procedures for the internal control system.
4. In addition, follow up on the Fund's compliance with the laws and decisions regulating its activities.
Investment Committee:
This committee is composed of at least three members of the Board of Directors and responsible for:
1. Assisting the Board of Directors in making investment decisions that generate an appropriate return for the Fund.
2. Assisting the Board in appointing a full-time Investment Manager.
Operation Manager:
• Carrying out all the executive activities and transactions of the Fund in accordance with the laws and regulations, and followed by a number of employees.
• Involved in the collection of contributions and payment of benefits.
• He/she can be a board member and operation manager at the same time and can be separate from board.
Investment Manager:
• Performing investment operations according to the law and regulations.
Coverage
1. Public sectors
2. Private sectors
3. Unions
4. Banking sector
5. Universities
6. Entertainment sector
7. Press sectors
• Approximately 17.5% of the working labour force is covered by private pension funds.
• Pension funds rules and regulations do not provide any discriminations regarding to admission to membership based on gender, race, religion or otherwise act in a discriminatory manner.
• Membership ends at the retirement age (60 years old) and in some cases, it can be extended to 65 year old.
• When an employee resigns from his/her current company for any reason, plan membership in his/her current company or occupation will be terminated and he/she will start new membership in his/her new company or occupation.
• Membership cannot be transferred to another member, within the same fund or another voluntary pension fund.
Financing / Investment
1) Revenue collection:
Contributions, membership fees, investment returns, contributions from the employer.
2) Investing Fund surplus in various fields:
The investment process must be perfomed in accordance with the Regulations.
3) The payment obligations:
Pay the benefits to members and their beneficiaries and the payment of general and administrative expenses such as wages, professional fees (auditor/actuary) etc.
Sources of funds
Employee contributions
Employer contributions
Other sources of funds
Methods of financing
Asset management
Benefit provisions
Acquisition and maintenance of rights
Waiting period
Vesting rules
Preservation, portability, transferability
Retirement benefits
Benefit qualifying conditions
Benefit structure / formula
Benefit adjustment
Survivors
Disability
Protection of Rights
Protection of Assets
Financial and Technical Requirements / Reporting
Whistleblowing
Standards for service providers
Fees
Winding up / Merger and acquisition
Bankruptcy: Insolvency Insurance / Compensation Fund
Disclosure of information / Individual action
Other measures
Tax Treatment
Taxation of employee contributions
Taxation of employer contributions
Taxation of investment income
Taxation of benefits
The FRA replaced the Egyptian Insurance Supervisory Authority (EISA), the Capital Market Authority (CMA), and the Mortgage Finance Authority (MFA). It applies the provisions of Law no. 10 of 1981 on Insurance Supervision and Control, Capital Market Law no. 95 of 1992, Central Depository and Registry Law no. 93 of 2000, Mortgage Finance Law no. 148 of 2001, as well as other related laws and decrees that are part of the FRA's terms of reference. In addition, the FRA is the competent authority that applies the provisions of Financial Leasing Law no. 95 of 1995.
FRA's Objectives:
• Maintaining stability and soundness of non-banking financial markets.
• Regulating and developing non-banking financial markets.
• Protecting rights of stakeholders.
• Issuing various means, systems, and rules ensuring efficiency and transparency of these markets.
• Stability and Integrity of non-banking financial markets.
• Issuing various rules and regulations which ensure efficiency and transparency of these markets.
The FRA Main Roles:
The Authority, in pursuit of achieving the purposes for which it has been established, in particular:
1. Licenses non-banking financial activities;
2. Inspects licensed entities engaged in non-banking financial activities;
3. Regulates the dissemination of information related to non-banking financial markets;
4. Ensures the transparency and competitiveness in non-banking financial services through proper regulation of non-banking financial markets;
5. Protect non-banking market investors' rights;
6. Take necessary measures to limit market manipulation and fraud;
7. Supervise training of market participants;
8. Cooperate and coordinate with other non-banking regulatory bodies abroad, thus developing and increasing efficiency of means and methods of supervision in non-banking financial markets and instruments domains;
9. Communicate, cooperate and coordinate with societies and organizations which regulate work of financial supervision authorities across the globe, thus empowering the Authority to assume its competences according to the best international practices;
10. Contribute to spreading investment culture and awareness;
11. This in addition to the roles mentioned in each of: the Supervision and Regulation of Insurance Law no. 10 of 1981, the Capital Market Law no. 95 of 1992, the Depository and Central registry Law no. 93 of 2000, the Mortgage Finance Law no. 148 of 2001.
Financial Regulatory Authority
Building No. 136/b smart village
6th October City, Giza Governorate
Egypt
Tel: 0020235345350
Fax: 0020235370036
www.fra.gov.eg
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