63. Approved pension funds
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(1) For the purposes of this Act, the Comptroller may approve a fund established for the provision of retirement benefits for employees and their dependents as an approved pension fund in accordance with this section.
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(2) The primary object of an approved pension fund is the provision of benefits by way of a pension—
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(a) to its members upon retirement;
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(b) to the spouse or child of a member upon his or her death,
but any such fund may also make provision for other benefits not inconsistent with this object.
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(3) The Comptroller shall not approve a pension fund where—
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(a) subject to subsections (5) and (8), the benefit provided on retirement or death is a lump sum;
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(b) where eligibility for membership in respect of members in permanent employment is not available to employees generally or to a class of employees generally; or
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(c) the fund is not established or constituted in Saint Lucia, except as provided in section 64.
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(4) The Comptroller shall not approve a pension fund unless satisfied that it provides—
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(a) for a pension to be payable—
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(i) on retirement of the member at his or her retirement date, which shall not be prior to his or her attaining 50 years of age,
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(ii) on retirement of the member prior to his or her retirement date where he or she retires prematurely as a result of mental or physical infirmity, or
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(iii) on death of the member while still in employment, except where alternative provision is made for a death benefit to be payable in accordance with subsection (5);
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(b) that any pension provided is payable in equal amounts (whether annually or at lesser periodic intervals) to—
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(i) the member for his or her life,
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(ii) the spouse of a deceased member, until his or her death or remarriage or for a guaranteed term of years,
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(iii) any child of the member until the child attains an age of not less than 16 years;
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(c) that the maximum pension payable to a member does not exceed 70% of the maximum salary earned by him or her during any 12 month period of membership;
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(d) that the maximum pension payable to the spouse and children of a deceased member does not exceed 75% of the pension payable to the member at his or her death, or where death occurred prior to his or her retirement would have been payable to him or her had he or she retired on the date of his or her death;
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(e) that contributions by a member cease upon his or her retirement, death or withdrawal from the fund;
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(f) that the annual contribution by the employer in relation to every calendar year is not less than the total contribution paid by all the members in relation to that year, except where the Comptroller is satisfied upon certification by an actuary that a lesser contribution is necessary to maintain the solvency of the fund;
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(g) that no pension payable thereunder is capable of being surrendered, commuted or assigned either wholly or in part, except to the extent permitted by subsection (8);
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(h) that no benefit is payable to or in respect of a member prior to his or her retirement or death, except to the extent permitted by subsections (11) or (12);
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(i) for the constitution of the fund by a trust under which the property of the fund is irrevocably vested in—
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(i) not less than 3 persons, where the trustees are individuals, or
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(ii) a trust corporation.
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(5) A pension fund may provide that, in lieu of widow's pension being payable in the event of the death of a member prior to retirement, a death benefit be payable equal to the aggregate of the joint contributions of the member and the employer together with compound interest thereon up to the date of his or her death.
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(6) Where under subsection (5) death benefits are payable in the event of the death of a member prior to his or her retirement, he or she may elect that such benefits be payable to his or her estate or any nominated beneficiary.
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(7) A pension fund may provide for contributions to be made only by the employer, but no such fund shall be approved which provides for contributions to be made only by the members.
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(8) A pension fund may provide for the commutation of pension benefits to the following extent—
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(a) where the annual amount payable does not exceed $1,200, the full amount of the pension may be commuted;
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(b) in any other case, the greater of $1,200 or 25% of the pension may be commuted.
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(9) Where any pension benefits are commuted, the trustees of an approved pension fund shall notify the comptroller of any commutation.
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(10) The trustees of an approved pension fund shall not invest, lend or use the assets of the fund in any investment which is not authorised by law or by the instrument creating the fund.
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(11) Despite subsection (4)(c) and (4)(d) (which provide maximum limits in relation to pension entitlements) a pension fund may provide for increases in pensions to be payable to existing pensioners by reason of increased cost of living.
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(12) A pension fund may provide for withdrawal from membership prior to resignation or death, but in any such case the rules of the fund shall provide that the maximum benefits to be paid to the member shall not exceed—
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(a) where membership of the employee does not exceed 5 years, a cash payment equal to, or a paid up deferred pension determined by reference to, the employee's own contributions together with compound interest thereon up to date of withdrawal;
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(b) where membership of the employee exceeds 5 years a paid up deferred pension determined by reference to the aggregate of the joint contributions of the member and the employer together with compound interest thereon up to the date of withdrawal,
or alternatively may provide for the transfer of such benefits to another approved pension fund.
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(13) Despite subsection (12)(b) the rules of a pension fund may provide for the payment of a cash sum in lieu of a paid up deferred pension in the following circumstances—
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(a) where the member is a married woman or an unmarried woman who is about to marry;
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(b) where the member intends, upon withdrawal, to leave Saint Lucia permanently; or
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(c) where, in the opinion of the Comptroller, other special circumstances exist.
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(14) Where cash benefits are payable to a member under subsection (12) or (13) upon withdrawal from a pension fund such moneys shall not form part of the chargeable income of the member but shall be separately charged to tax in the hands of the trustees who shall deduct, as tax, 10% of the moneys prior to payment of the balance to the member.
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(15) The tax deducted by the trustees under subsection (14) shall be paid to the Comptroller within 15 days after the end of the month in which it was deducted and shall be accompanied by a statement setting out the names of all members to whom payments have been made, the amounts of such payments and the tax deducted therefrom.
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(16) Where an approved pension fund is vested in—
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(a) individuals, at least one trustee is to be a representative of the employees, selected by them;
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(b) a trust corporation, a management committee is to be established comprising not less than 3 individuals, at least one of whom shall be a representative of the employees, selected by them.
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(17) An employer shall not be a trustee of any pension fund established under this section, but nothing herein is to be constructed as preventing an employer from appointing a representative either as a trustee or a member of the management committee as the case may be.
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(18) Despite subsection (1), where a fund or scheme has been approved for the purposes of section 14 of the previous Act prior to the commencement of this Act, such fund or scheme is considered to have been approved under this section.
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(19) Where in any year of income a resident individual makes payments to an approved pension fund he or she is entitled to a deduction which shall not exceed $8,000.00.
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(Inserted by Act 2 of 2009)