Circular No. 86/2017/TT-BTC guiding certain provisions of the Government's Decree No. 88/2016/NĐ-CP dated July 1, 2016 on the voluntary supplementary pension program

MINISTRY OF FINANCE -------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------------
Number: 86/2017/TT-BTC	Hanoi, August 15, 2017

CIRCULAR

GUIDELINES FOR CERTAIN PROVISIONS OF THE GOVERNMENT DECREE NO. 88/2016/NĐ-CP OF JULY 1, 2016 ON THE VOLUNTARY COMPLEMENTARY PENSION PROGRAM

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 88/2016/NĐ-CP dated July 1, 2016 of the Government on the voluntary complementary pension program;

At the proposal of the Director of the Department of Financial Affairs of Banks and Financial Institutions,

The Minister of Finance hereby promulgates this Circular guiding the implementation of certain provisions of Decree No. 88/2016/NĐ-CP dated July 1, 2016 of the Government on the voluntary complementary pension program.

Article 1. Scope of Regulation

This Circular provides guidance on investment, accounting, determination of net asset value, and reporting requirements for pension fund management enterprises and supervisory banks as stipulated in Decree No. 88/2016/NĐ-CP dated July 1, 2016 of the Government on the voluntary complementary pension program (hereinafter referred to as Decree No. 88/2016/NĐ-CP).

Article 2. Applicability

       

1. Pension fund management enterprises.

2. Supervisory banks; depository organizations.

3. Organizations and individuals providing services related to the establishment, operation, management, and supervision of voluntary complementary pension funds.

Article 3. Investment of pension funds

1. The investment activities of pension funds shall be carried out in accordance with Article 20 of Decree No. 88/2016/NĐ-CP based on compliance with legal regulations, self-responsibility for investment activities, ensuring safety and efficiency, in line with the objectives and investment policies of the pension fund as stipulated in the fund's charter.

2. In addition to complying with the provisions of Article 20 of Decree No. 88/2016/NĐ-CP, pension funds may invest no more than twenty percent (20%) of the total value of the fund’s assets in certificates of a securities investment fund.

3. In cases where investments are made in certificates of securities investment funds managed by pension fund management enterprises, such enterprises may only charge a one-time fund management fee.

4. Based on market conditions and the investment activities of pension funds, the Ministry of Finance may adjust the investment portfolio and limits set forth in Clause 2 of this Article.

Article 4. Accounting of pension funds

Pension funds shall apply the accounting regime for open-ended funds as prescribed in Circular No. 198/2012/TT-BTC dated November 15, 2012 of the Ministry of Finance on the accounting regime applicable to open-ended funds, Circular No. 181/2015/TT-BTC dated November 13, 2015 of the Ministry of Finance on the accounting regime applicable to exchange-traded funds, and any subsequent amendments and supplements (if any) to account for and record the business operations of the fund.

Article 5. Determination of Net Asset Value of Pension Funds

1. Monthly, pension fund management enterprises are responsible for determining the net asset value of the pension fund and the individual retirement account value according to Point c Clause 1 Article 21 and Point c Clause 1 Article 22 of Decree No. 88/2016/NĐ-CP.

2. Pension fund management enterprises must establish a regulation for determining the net asset value of the pension fund and the individual retirement account value as a basis for implementation. The regulation must include the following basic contents:

a) Principles for determining the net asset value of the pension fund and the individual retirement account value;

b) Detailed procedures for implementing valuation methods for each type of investment asset of the pension fund;

c) The level of error for which the pension fund management enterprise is responsible for compensating participants in the fund according to Point b Clause 1 Article 23 of Decree No. 88/2016/NĐ-CP.

3. Regulations for determining the net asset value of the pension fund and the individual retirement account value must be stipulated in the fund's charter according to Point m Clause 1 Article 14 of Decree No. 88/2016/NĐ-CP. The regulation must be published on the website of the pension fund management enterprise and simultaneously sent to the supervisory bank for inspection and supervision according to Point c Clause 4 Article 16 of Decree No. 88/2016/NĐ-CP.

4. The determination of the market value of the pension fund's assets shall be carried out according to the method prescribed in Article 19 of Circular No. 183/2011/TT-BTC dated January 20, 2016 of the Ministry of Finance guiding the establishment and management of open-ended funds and any subsequent amendments and supplements (if any).

5. When pension fund management enterprises incorrectly determine the net asset value of the pension fund or the individual retirement account value and actual losses occur for participants in the fund, the pension fund management enterprise must compensate the participants according to Article 23 of Decree No. 88/2016/NĐ-CP. The level of error requiring compensation is specified in the regulation for determining the net asset value of the pension fund and the individual retirement account value stipulated in Clause 2 of this Article but not less than seventy-five percent (0.75%) of the net asset value of the fund.

6. Supervisory banks are responsible for checking and confirming the net asset value of the pension fund and the individual retirement account value according to Point c Clause 4 Article 16 of Decree No. 88/2016/NĐ-CP. In case of discovering incorrect valuation of the net asset value or the individual retirement account value, the supervisory bank must notify and require the pension fund management enterprise to adjust within twenty-four (24) hours.

7. Within a maximum period of three (03) working days from the date of valuation, the net asset value of the pension fund must be published on the websites of the pension fund management enterprise and the retirement agent.

Article 6. Reporting System for Pension Fund Management Enterprises

1. In addition to complying with the financial reporting system as stipulated in Point c Clause 1 Article 32 Decree No. 88/2016/NĐ-CP, pension fund management enterprises must implement the reporting system on pension fund management activities and risk management, internal control systems, specifically as follows:

a) Supplementary voluntary pension fund management activity report according to Appendix 1 issued together with this Circular. The report is conducted annually; the deadline for submitting the report is no later than three months after the end of the year;

b) Report on assets of supplementary voluntary pension funds according to Appendix 2 issued together with this Circular. The report is conducted quarterly; the deadline for submitting the report is no later than twenty days after the end of the most recent quarter;

c) Report on investment activities of supplementary voluntary pension funds according to Appendix 3 issued together with this Circular. The report is conducted quarterly; the deadline for submitting the report is no later than twenty days after the end of the most recent quarter;

d) Report on risk management and internal control systems according to Appendix 4 issued together with this Circular. The report is conducted annually; the deadline for submitting the report is no later than three months after the end of the year.

2. The reports prescribed in Clause 1 of this Article shall be submitted to the Ministry of Finance and the Ministry of Labor, Invalids and Social Affairs in accordance with Article 32 of Decree No. 88/2016/NĐ-CP.

Article 7. Reporting System for Supervisory Banks

1. Supervisory banks have the responsibility to implement the reporting system on the results of inspections and supervision of pension fund management activities of pension fund management enterprises as stipulated in Article 33 of Decree No. 88/2016/NĐ-CP. The report format is specified in Appendix 5 issued together with this Circular.

2. The recipients of the reports and the deadlines for submitting the reports prescribed in Clause 1 of this Article shall be implemented in accordance with Article 33 of Decree No. 88/2016/NĐ-CP.

Article 8. Implementation clause

1. This Circular takes effect from October 1, 2017.

2. The Director of the Ministry of Finance's Office, the Director of the Department of Banking and Financial Institutions' Finance, the Heads of relevant units under the Ministry of Finance, pension fund management enterprises, supervisory banks, and related organizations and individuals are responsible for implementing this Circular.

Place of Receipt: - Prime Minister, Deputy Prime Ministers; - Central Party Office and Party Committees; - Office of the General Secretary; - National Assembly's Office; - President's Office; - Ministries, agencies equivalent to ministries, and agencies under the Government; - Supreme People's Court; - Supreme People's Procuracy; - State Audit Agency; - Central Agencies of Mass Organizations; - Provincial People's Councils, City People's Committees directly under the Central Government; - Provincial Departments of Finance under centrally governed cities and provinces; - Ministry of Justice's Legal Documents Inspection Department; - Official Gazette; - Government Portal, Ministry of Finance; - Units under and directly affiliated with the Ministry of Finance; - File: VT, Department of Accounting and Finance.

DEPUTY MINISTER DEPUTY MINISTER Tran Van Hieu

ANNEX 1

(Issued together with Circular No. 86/2017/TT-BTC dated August 15, 2017 of the Ministry of Finance guiding the implementation of certain provisions of Decree No. 88/2016/NĐ-CP dated July 1, 2016 of the Government on the voluntary supplementary pension program)

REPORT ON PENSION FUND MANAGEMENT ACTIVITIES OF VOLUNTARY SUPPLEMENTARY PENSION FUNDS

Respectfully submitted to:

- Ministry of Finance; - Ministry of Labor, Invalids and Social Affairs.

- Name of the pension fund management enterprise:...

- Address:

- Business operation qualification certificate number … issued by … on …

- Reporting period year: …

- Names and addresses of service providers for the pension fund management enterprise (fund accounting, individual retirement account management) (if any);

- List of retirement agents.

1. General Report

Serial number	Index	Unit	- The book value of the security is determined according to the Accounting System of the State Bank and the guidance document of the State Bank on the accounting treatment of foreign securities investment operations.	Changes compared to the previous reporting period
I	Number of voluntary supplementary pension funds currently managed
II	Total net asset value of voluntary supplementary pension funds currently managed
	Where:
1	Total contributions to voluntary supplementary pension funds during the period
2	Total payments from voluntary supplementary pension funds during the period
3	Total investment value at the end of the reporting period

2. Report for each voluntary supplementary pension fund currently managed

(Details for each voluntary supplementary pension fund currently managed)

- Name of the voluntary supplementary pension fund;

- Charter of the fund number … dated …; amended and supplemented charter number … dated … (if any); specifying in detail the investment policy of the voluntary supplementary pension fund, the proportion of investment in each type of asset as stipulated in Clause 3 Article 20 of Decree No. 88/2016/NĐ-CP.

- Custodian organization name;

- Supervisory bank name;

Serial number	Index	Unit	- The book value of the security is determined according to the Accounting System of the State Bank and the guidance document of the State Bank on the accounting treatment of foreign securities investment operations.	Changes compared to the previous reporting period
I	Total number of participants in the fund (I=1+2)
1	Number of individual direct participants in the fund
2	Number of workers participating in the fund through employers (Details for each enterprise)
II	Net asset value of the fund
	Where:
1	Total contributions to voluntary supplementary pension funds during the period
2	Total payments from voluntary supplementary pension funds during the period
3	Total net asset value of the voluntary supplementary pension fund

…, day … month … year … LEGAL REPRESENTATIVE (Signature, full name, stamp)

ANNEX 2

(Issued together with Circular No. 86/2017/TT-BTC dated August 15, 2017 of the Ministry of Finance guiding the implementation of certain provisions of Decree No. 88/2016/NĐ-CP dated July 1, 2016 of the Government on the voluntary supplementary pension program)

REPORT ON ASSETS OF VOLUNTARY SUPPLEMENTARY PENSION FUNDS

(applicable to each voluntary supplementary pension fund)

Respectfully submitted to:

- Ministry of Finance; - Ministry of Labor, Invalids and Social Affairs.

- Name of the pension fund management enterprise: …

- Address:

- Business operation qualification certificate number … issued by … on …

- Quarterly reporting period … year …

- Name of the voluntary supplementary pension fund;

- Charter of the fund number … dated …; amended and supplemented charter number … dated … (if any); specifying in detail the investment policy of the voluntary supplementary pension fund, the proportion of investment in each type of asset as stipulated in Clause 3 Article 20 of Decree No. 88/2016/NĐ-CP.

Unit of measurement: …VND

No.	Assets	Reporting period	Previous period	%/same period last year
1	Cash and cash equivalents
	=
	Bank deposits
	Cash equivalents
2	Government Bonds
3	Government-guaranteed bonds
4	Local government bonds
5	Investment fund certificates
6	Receivables
	Interest and dividends received
	Other receivables
	Provision for doubtful debts
7	Total Assets

…, day … month … year … LEGAL REPRESENTATIVE (Sign, write full name and stamp)

ANNEX 3

(Issued together with Circular No. 86/2017/TT-BTC dated August 15, 2017 of the Ministry of Finance guiding the implementation of certain provisions of Decree No. 88/2016/NĐ-CP dated July 1, 2016 of the Government on the voluntary supplementary pension program)

REPORT ON INVESTMENT ACTIVITIES OF VOLUNTARY SUPPLEMENTARY PENSION FUNDS

(applicable to each voluntary supplementary pension fund)

Respectfully submitted to:

- Ministry of Finance; - Ministry of Labor, Invalids and Social Affairs.

- Name of the pension fund management enterprise: …

- Address:

- Business operation qualification certificate number … issued by … on …

- Quarterly reporting period … year …

- Name of the voluntary supplementary pension fund;

- Charter of the fund number … dated …; amended and supplemented charter number … dated … (if any); Investment policy of the voluntary supplementary pension fund, the proportion of investment in each type of asset as stipulated in Clause 3 Article 20 of Decree No. 88/2016/NĐ-CP.

Unit of measurement: …VND

I. INVESTMENT PORTFOLIO REPORT OF THE FUND

No.	Type of asset (specify in detail)	Quantity	Market price or fair value on the reporting date	Total value	Percentage / Total asset value of the fund
I	=
1	Cash
2	Bank deposits
	Total
II	Government Bonds
III	Government-guaranteed bonds
IV	Local government bonds
V	Investment fund certificates
1
2
	Total
VI	Receivables
1	Interest and dividends received
2	Other receivables
3	Provision for doubtful debts
	Total
VII	Total Portfolio Value

II. REPORT ON OPERATING RESULTS

No.	Index	Reporting period	Previous period	Cumulative since the beginning of the year
I	Income from investment activities
1	Interest and dividends received
2	Other income
II	Cost
1	Management fee paid to the pension fund management enterprise
2	Custody fee paid to the custodian organization
3	Supervision fee paid to the supervisory bank
4	Fees for fund accounting, individual retirement account management, and other costs paid by the pension fund management enterprise to related service providers;
5	Audit fees paid to the auditing organization;
6	Costs related to executing transactions involving fund assets.
7	Other fees (specify in detail)
III	Net income from investment activities (I-II)
IV	Profit (loss) from investment activities
1	Actual profit (loss) generated from investment activities
2	Change in value of investments during the period
V	Change in net asset value of the Fund due to investment activities during the period (III + IV)
VI	Opening net asset value
VII	Change in net asset value of the Fund during the period:
	Of which
1	Change in net asset value of the Fund due to investment-related activities during the period
2	Change in net asset value of the Fund due to contributions from participants during the period
3	Change in net asset value of the Fund due to payments to participants during the period
VIII	Closing net asset value

…, day … month … year … LEGAL REPRESENTATIVE (Sign, write full name and stamp)

ANNEX 4

(Issued together with Circular No. 86/2017/TT-BTC dated August 15, 2017 of the Ministry of Finance guiding the implementation of certain provisions of Decree No. 88/2016/NĐ-CP dated July 1, 2016 of the Government on the voluntary supplementary pension program)

REPORT ON RISK MANAGEMENT AND IMPLEMENTATION OF INTERNAL CONTROL SYSTEMS IN PENSION FUND MANAGEMENT

Respectfully submitted to:

- Ministry of Finance; - Ministry of Labor, Invalids and Social Affairs.

- Name of the pension fund management enterprise: …

- Address:

- Business Registration Certificate number … issued by … on ….

- Reporting period for the year: ….

- Name and address of organizations providing related services to the enterprise managing pension funds (accounting for the fund, management of individual pension accounts) (if applicable).

1. General situation of the enterprise managing pension funds

- Reissued Business Registration Certificate number ... on ...;

- Subject to restructuring or special supervision;

- Complaints, accusations, disputes during the year related to the management of pension funds (if any);

- Cases of compensation for losses to participants in the pension fund;

- Inspection reports conducted by state management agencies during the year.

2. Situation of each voluntary supplementary pension fund

- Changes in depositary organization;

- Changes in supervisory bank;

- Changes in the charter of the fund; Specifically mentioning changes in the investment policy of the voluntary supplementary pension fund.

3. Report on the implementation of internal control systems by the enterprise managing the pension fund in its management activities

- Evaluation of the implementation and application of internal control systems by the enterprise managing the pension fund in its management activities.

…, day … month … year … LEGAL REPRESENTATIVE (Signature, full name, stamp)

ANNEX 5

(Issued together with Circular No. 86/2017/TT-BTC dated August 15, 2017 of the Ministry of Finance guiding the implementation of certain provisions of Decree No. 88/2016/NĐ-CP dated July 1, 2016 of the Government on the voluntary supplementary pension program)

REPORT ON THE RESULTS OF SUPERVISION AND MONITORING BY THE SUPERVISORY BANK FOR THE ENTERPRISE MANAGING THE PENSION FUND IN ITS MANAGEMENT ACTIVITIES

Respectfully submitted to:

- Ministry of Finance; - Ministry of Labor, Invalids and Social Affairs.

- Name of supervisory bank: ...

- Address:...

- Name of the enterprise managing the pension fund under supervision: ...

- Address: ...

- Business Registration Certificate for pension fund management services number ... issued on …

- Name and address of organizations providing related services to the enterprise managing pension funds (accounting for the fund, management of individual pension accounts) (if applicable).

- Reporting period for the year: …

1. Regarding compliance with obligations of the enterprise managing the pension fund

- Evaluation of compliance with obligations stipulated in Decree No. 88/2016/ND-CP for enterprises managing pension funds and service providers regarding compliance with obligations stipulated in Decree No. 88/2016/ND-CP, the fund charter, participation contracts in pension funds, and service provision contracts;

- Cases of compensation for losses to participants in the pension fund (if any);

- Regarding separate accounting and management of assets of participants in the pension fund and the enterprise managing the pension fund.

2. Regarding investment activities

- Evaluation of compliance with the investment policy according to the fund charter, compliance with rights and responsibilities of relevant parties in transactions of the pension fund and individual pension accounts.

3. Regarding management of individual pension accounts

- Evaluation of allocation of investment results, determination of the value of individual pension accounts.

4. Regarding the implementation of internal control systems by the enterprise managing the pension fund in its management activities

- Evaluation of the implementation of internal control systems by the enterprise managing the pension fund in its management activities;

- Evaluation of procedures and methods for determining the net asset value of the pension fund;

- Evaluation of procedures and methods for allocating investment results, determining the value of individual pension accounts.

- Potential risks (if any).

…, day … month … year … AUTHORIZED REPRESENTATIVE OF THE SUPERVISORY BANK (Signature, full name, stamp)