THE NATIONAL CREDIT ACT AS IT PERTAINS TO PENSION FUNDS

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THE NATIONAL CREDIT ACT AS IT PERTAINS TO PENSION FUNDS

THE NATIONAL CREDIT ACTAS IT PERTAINS TO PENSIONFUNDSBy Ian Jacobsberg


THE NATIONAL CREDIT ACT, NO. 34OF 2005


EXEMPTIONS• Juristic person with asset value exceedingR1 million;• Juristic person with asset value notexceeding R1 million, but principal debt isnot less than R250 000;• Credit provider is the Reserve Bank;• Credit provider is outside RSA and ministerhas approved


THE DEFINITION OF A CREDITAGREEMENT• Includes: -– A mortgage agreement;– A secured loan;– An undertaking to satisfy an obligation ofanother person in terms of a credit facilityor transaction


CATEGORIES OF CREDITAGREEMENT• "Small" – principal debt less thanR15 000;• "Intermediate" – principal debt equalto or greater than R15 000 but less thanR250 000;• "Large" – principal debt equal to ormore than R250 000.


PRE – AGREEMENT DISCLOSURE:"SMALL" AGREEMENT• Pre-agreement statement• Quotation


PRE-AGREEMENT DISCLOSURE:"INTERMEDIATE" AND "LARGE"AGREEMENT• Pre-agreement statement;• Quotation setting out: -– Principal debt;– Proposed distribution;– Interest rate and credit costs;– Total cost of agreement;– Costs payable on rescission


CREDIT INSURANCE POLICYREQUIREMENTS (1)• Must not be unreasonable or at anunreasonable cost;• Consumer must be informed that hemay waive the policy and substituteone of his choice.


CREDIT INSURANCE POLICYREQUIREMENTS (2)• Payment of premiums must be– Monthly in small or intermediateagreements;– Monthly or annual in large agreements• No surcharge, fee or additionalpremiums are permitted.


CREDIT INSURANCE POLICYREQUIREMENTS (3)The credit provider must disclose: -• The cost to the consumer of insurancesupplied;• Fees, commissions, remuneration orbenefits payable to the creditprovider.


EMPLOYER AS AGENT FOR CREDITPROVIDER


PAYROLL DEDUCTIONSCharges may only be made: -• Against a specified asset, account or amountdeposited for the consumer's benefit and held bythe credit provider or a third party;• Only to satisfy a specified obligation or series ofobligations under the agreement;• Only for a specified amount calculated byreference to the obligation it is intended to satisfy;• Only on specified date/s corresponding to date/son which obligations arise under the agreement.

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