GENERAL
The basis of the supervisory task of the Centrale Bank van Suriname (henceforth referred to as CBvS) is laid down in Article 9 of the Central Bank Act 2022 (Official Gazette 2022 no. 65). According to this article, the CBvS has, among other things, the task of supervising the banking and credit system, the pension and insurance system, the exchange of money and the transfer of financial resources to and from abroad, against the background of the applicable legal regulations. The supervision focuses on the soundness and integrity of the institutions in these sectors and sub-sectors.
The Prudential Supervision Directorate is responsible for the prudential and integrity supervision of financial institutions. This directorate consists of a secretariat and the Pension Funds Supervision Department, Banking Supervision, Money Transfer Offices Supervision and Capital Market Supervision Department, Insurance Supervision Department, Credit Union Supervision Department, Financial Stability Department and Staff Unit.
The Pension Funds and Provident Funds Act (Official Gazette 2005 no. 75) forms the basis for the supervision of voluntary pension schemes, including pension funds and provident funds. The technical implementation of the supervision of pension funds and provident funds has been delegated to the Pension Funds Supervision Department. The names of the supervised pension funds and provident funds are published in the first half of January of each year in the Advertising Gazette of the Republic of Suriname according to the situation as at 31 December of the previous year.
Supervision of pension and provident funds includes:
- prudential supervision that focuses on the financial structure, expertise and integrity of board members of institutions and therefore on protecting the interests and increasing the trust of the participants in their institution and the funds entrusted to the institution.
- the integrity supervision that focuses on:
- a “clean” and honest pension sector by tackling financial and economic crime;
- managing integrity risks at supervised institutions;
- fit and proper board members who, based on a code of conduct, formulate responsible policy for their institutions.
The intent is through adequate supervision mitigate the risk of institutions getting into difficulties, as well as the sector as a whole, as a result of, among other things, money laundering activities, financing of terrorism and/or corruption, as well as insolvency.
In accordance with the Act to prevent and combat Money Laundering and Terrorist Financing – Official Gazette 2022 no. 138 (henceforth referred to as WMTF), the CBvS conducts AML/CFT supervision, part of the integrity supervision, on all financial institutions. In this context, the Pension Fund Supervision Department supervises all pension funds and provident funds, including the General Pension Fund, which does not fall under the prudential supervision of the CBvS.
In this context, the CBvS has issued the guideline “Regulation Code of Conduct for Pension funds and Provident Funds” and, pursuant to the provisions of the WMTF, the “AML/CFT and Corruption directive for Pension funds and Provident Funds”.
Integrity risk management includes preventing involvement in criminal activities including, but not limited to, money laundering, financing terrorism and other violations of the WMTF or acting contrary to generally accepted standards.
The starting point of the CBvS is that integrity risk management promotes ethical behavior and an ethical corporate culture. To prevent conflicts of interest, integrity risk management should be included in the institutions' code of conduct.
Necessary to know
What is a pension fund?
According to the Pension Funds and Provident Funds Act a pension fund is an institution affiliated with one or more companies, in which funds are collected for the benefit of persons affiliated with the company or companies for the purpose of securing retirement.
What is a provident fund?
According to the Pension Funds and Provident Funds Act, a provident fund is an institution associated with one or more companies, in which funds are collected for the benefit of persons associated with those companies to save for purposes of providing a one-off payment by way of old-age provision.
Establishment of a pension fund or provident fund
The establishment of a pension fund or provident fund must be done according to legal procedures. It is recommended to follow this process carefully. The employer must report the pension commitment to the CBvS. The board of pension funds or provident funds must also register the pension fund or provident fund with the CBvS within 3 months after its establishment by means of a registration form. Below is an overview of the obligations of this process:
What legal form should the pension fund or provident fund have?
Pension funds and provident funds must have the legal form of a foundation under Surinamese law.
When must a pension fund or provident fund be registered with the CBvS?
The board of a pension fund or provident fund is obliged to register the pension fund or provident fund with the CBvS within 3 months after its establishment.
When must the board of the pension fund or provident fund submit a request to the CBvS for the issue of a declaration of no objection?
When registering, the board of a pension or provident fund submits a request to the CBvS for the issue of a declaration of no objection to be allowed to operate as a pension fund or provident fund.
Which documents must be submitted when registering a pension fund or provident fund (in formation)?
The documents to be submitted are as follows.
- A copy of the deed of incorporation or the statutes;
- Proof of registration in the Foundation Register;
- A copy of the articles of association and regulations certified by the board;
- A copy, certified by the board, of the agreement regarding the arrangement regarding the payment of the contributions.
Where should the notification of the establishment of a pension fund or provident fund be made?
The notification of the establishment of a pension fund or provident fund should be made to the CBvS.
Which provisions must the articles of association and the (pension) regulations of the pension fund or provident fund contain as a minimum?
The articles of association and the regulations of a pension fund or provident fund must at least contain provisions that comply with the provisions of the Pension Funds and Provident Funds Act.
What information is also required by the CBvS during the same period of this process?
The following information is required by the CBvS:
- Statement of the actuary charged with the actuarial activities for the benefit of the pension fund, if the pension fund have all or part of its obligations under own management.
- Statement of the external auditor charged with auditing the annual accounts.
- Statement of the administrator of the pension fund or provident fund.
- Statement of the persons with signing power, stating the respective authorization rights.
Declaration of no objection
If the pension fund or provident fund has been registered with the CBvS, a request must also be made to the CBvS, on the basis of the Pension Funds and Provident Funds Act, for the issuance of a declaration of no objection.
Pursuant to the legal provisions, the CBvS decides on the request to issue a declaration of no objection within 3 months after receipt of the required data, evidence and information.
The decision is notified by the CBvS to the pension fund or provident fund by registered letter.
For the purpose of the aforementioned process, the “Guideline for the supervision and issuance of a declaration of no objection for pension funds and provident funds” has been issued.
Testing fit and proper of board members
In accordance with the Pension Funds and Provident Funds Act, the CBvS tests the board members of a pension fund or provident fund who determine or help determining the policy on their expertise and integrity. Lower requirements are set for a provident fund with regard to expertise.
When will the assessment take place and which persons?
The assessment takes place when the board of a starting pension fund or provident fund registers or when registering prospective board members and if current board members from existing pension funds and provident funds apply for re-election.
Which documents are required?
The following documents are required under the Pension Funds and Provident Funds Act:
- The curriculum vitae
- A statement from the Attorney General regarding the antecedents
- A recent extract from the population register
- A recent matching photo
- A recent nationality statement
- A copy of the identity card
- The fully completed application form
This assessment takes place on the basis of the “Guideline regarding requirements for board members in the field of integrity and expertise”.
The supervision of pension funds or provident funds
Off - site inspection
The off-site inspection can be described as the processing, analysis and assessment of information or reports from the pension or provident funds, the findings of which act as a signal for possible problems, grouped by risk areas.
On-site inspection
On-site inspection is carried out, among other things, at a pension fund or provident fund based on (the extent of) identified risks to which the pension fund or provident fund is exposed or red flags that have been identified during the off-site inspection. The operational management of the institution is assessed on site, among other things on the basis of the documentation made available.
Periodic meetings
These discussions take place if the CBvS deems it necessary or at the request of a pension fund or provident fund and have the following objectives:
- To inform board members of responsibilities and accountability when accepting the position of board member.
- Keeping abreast of developments within the pension fund or provident fund.
- To assist the pension fund or provident fund in all kinds of matters.
- Discuss observed developments directly with the board of the pension fund or provident fund to prevent (insurmountable) problems.
End of supervision
Settlement of pension funds or provident funds
If a pension fund or provident fund has achieved its goal or will no longer achieve its goal, it is necessary to have this institution terminated. A pension fund or provident fund can be dissolved by administrative decision or by a decision of the sub-district court judge. After all formalities as included in the articles of association as well as the rules of the Pension Funds and Provident Funds Act and the CBvS have been complied with, the supervision can be terminated, after which the pension fund or provident fund can be closed, followed by the deregistration of the pension fund or provident fund from the Foundation Register.