Friendly Societies

Friendly Societies
A friendly society is any association of persons established, or any business carried on, under a scheme or arrangement instituted for any of the following objects:

 
  • Insurance of a sum of money towards funeral expenses, birth of a child or during a period of confined mourning;
  • Provision of money for advancement of education of members or their children;
  • Relief to members during unemployment, or maintenance during minority, old age, widowhood, sickness or other infinity;
  • Sickness benefits and
  • Other business that the Minister may, by proclamation in Gazette declare.
Friendly Societies are regulated in terms of Friendly Societies Act, 1956. All friendly societies must be registered with the Financial Services Board (FSB). If the Society’s income is less than R100 000 per annum it may be exempted from valuation but it still needs to apply for such an exemption.
 
 
Limitations on Friendly Societies

 
  • There has to be mutuality between members and stated in their constitution
  • No marketing allowed
  • Limited to a specific group
  • Not for profit
  • No refund of contributions
  • Maximum benefit payment of R7 500
  • Escape clause – pay only if sufficient funds available
  • Costs not to exceed 10% of total income.

 
Where to get more information

 
  • Friendly Societies Act, 25 of 1956
  • Registrar of Friendly Societies, at the Financial Services Board
  • www.fsb.co.za - Retirement Funds
  • FSB’s toll free no.0800 110 443 or 0800 202 087
 
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