The Financial Institutions and Markets Act came into force on 1 May 2026, but the regulation requiring 75% compulsory preservation of retirement benefits has been put on hold.
The rollout of FIMA and the new NAMFISA Act excludes the preservation rule, which will be reviewed by the Minister of Finance before any decision is taken on its implementation.
Chief Executive Officer Kenneth Matomola said the provision is not currently operational.
“Accordingly, the Namfisa Act as well as the Financial Institutions and Markets Act have been in force since 1 May 2026. It is important that I also hasten to mention that the regulation dealing with the preservation of pension benefits has been put on hold and is therefore not operational, as it requires further review and reworking. Once the necessary revisions have been completed, the Minister will reconsider the regulation and determine whether it should be brought into operation. For now, preservation is off the table and not in effect,” he said.
Matomola said there are no changes to how retirement benefits are currently paid out, despite FIMA coming into effect.
The existing framework remains in place, with pension fund members still able to access one-third of their savings as a lump sum, while provident fund members continue to receive full lump sum payouts under the Income Tax Act of 1981.
He said the introduction of FIMA marks a shift from a compliance-based to a risk-based supervisory model.
“Under the old framework, the rules required compliance-based supervision. However, under FIMA and the new NAMFISA Act, we have transitioned to a risk-based supervisory approach. This allows us to allocate resources where they are most needed, recognising that resources are limited. In this way, FIMA strikes a balance between strong regulatory oversight and market development. It also creates space for and encourages innovation within the financial sector,” he said.
Matomola said the focus is on strengthening the financial system while ensuring protection of consumer savings and supporting broader market development.
