New guidelines on the management of voluntary supplemental retirement program

Regarding voluntary supplemental retirement program investments, the Circular provides guidance on the investment activities of the pension fund based on compliance with legal regulations, self-responsibility for investment activities, ensuring safety, efficiency, and in accordance with the objectives and investment policies of the pension fund as stipulated in the fund's charter.

Circular 86/2017/TT-BTC specifies that the pension fund must not invest more than 20% of the total asset value of the fund in securities investment fund certificates.

In cases where investment is made in the securities investment fund certificates managed by the same company managing the pension fund, the pension management company is only allowed to charge a single fund management fee.

Regarding the accounting of the pension fund, the Circular guides that the pension fund can apply open-ended fund accounting policies for accounting and bookkeeping its operational activities.

The Circular also provides specific guidance on determining the net asset value of the pension fund. Monthly, the pension management company is responsible for determining the net asset value of the pension fund and the value of individual pension accounts.

The pension management company must establish policies for determining the net asset value and the value of individual pension accounts as a basis for implementation.

These policies include: Principles for determining the net asset value of the pension fund and the value of individual pension accounts; detailed procedures for implementing valuation methods for each type of investment asset of the pension fund; the error threshold at which the pension management company is responsible for compensating participants' losses.

According to the Circular, if the pension management company incorrectly determines the net asset value of the pension fund or the value of individual pension accounts and actual losses occur for participants, the company must compensate for the losses.

The custodian bank is responsible for verifying and confirming the net asset value of the pension fund and the value of individual pension accounts. If incorrect valuations are detected, the custodian bank must notify and require the pension management company to adjust within twenty-four (24) hours.

The Circular states that within a maximum of three (03) working days from the valuation date, the net asset value of the pension fund must be published on the websites of the pension management company and pension agents.

Additionally, besides complying with financial reporting policies, the pension management company must implement policies for reporting on pension fund management activities and risk management, and internal control systems. Specifically:

First, a report on the management of the voluntary supplemental retirement program. The report is made annually; the latest submission time is 3 months after the end of the year;

Second, a report on the assets of the voluntary supplemental retirement program. This report is made quarterly; the latest submission time is 20 days after the end of the most recent quarter;

Third, a report on the investment activities of the voluntary supplemental retirement program. This report is also made quarterly; the latest submission time is 20 days after the end of the most recent quarter;

Fourth, a report on risk management and internal control systems. This report is made annually; the latest submission time is 3 months after the end of the year.

Source: Finance Magazine

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