i Short answer
Regulation 28, issued under the Pension Funds Act, caps how much of a South African retirement fund's assets can be allocated to specific asset classes and geographies. The headline limit most people know is offshore exposure, capped at 45% (increased from 30% in January 2023), alongside caps on equities (75%), property (25%), and specific issuer concentration limits.
This applies specifically to retirement funds, pension, provident, and retirement annuity funds, not to your personal trading or investment account held directly with a broker, which isn't subject to these allocation limits at all.
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Regulation 28: Key Limits
Always verify current limits directly with your retirement fund administrator, as specific sub-limits and definitions can be refined over time.
1. What Regulation 28 actually caps
Regulation 28, issued under South Africa's Pension Funds Act, sets prudential limits on how retirement funds can allocate their assets across different classes and geographies. Beyond the well-known offshore limit, it caps overall equity exposure at 75%, property exposure at 25%, and includes specific issuer concentration limits designed to prevent a fund becoming overly exposed to any single company, sector, or counterparty.
The regulation exists to protect retirement savers from excessive concentration risk, the kind of risk that could meaningfully damage a large pool of retirement savings if a single asset class or geography experienced a severe downturn.
2. Who it applies to, and who it doesn't
Regulation 28 applies specifically to retirement funds, pension funds, provident funds, and retirement annuities, governing how fund trustees and appointed asset managers structure the pooled retirement savings vehicle itself. It does not apply to your personal, individual trading or investment account held directly with a broker.
This means your personal forex or CFD trading account isn't subject to these specific asset allocation caps at all, you can hold whatever mix of assets and geographic exposure you choose in a personal account, the constraint only applies to the structured retirement fund vehicle.
3. The offshore limit specifically
The offshore exposure limit is the most widely discussed element of Regulation 28, currently capped at 45% of a retirement fund's total assets. This means even a fund's trustees who wanted to allocate more heavily toward international markets, for genuine diversification reasons, are constrained from doing so beyond this ceiling.
| Period | Offshore Limit |
|---|---|
| Before January 2023 | 30% |
| From January 2023 | 45% |
4. Why the offshore cap matters for retirement savers
The offshore limit directly affects portfolio diversification and currency risk exposure. A retirement fund capped at 45% offshore exposure carries meaningfully more concentration in South African assets, and correspondingly more exposure to Rand currency movements and domestic economic conditions, than an uncapped global portfolio would have.
This represents a deliberate policy trade-off: protecting domestic capital markets and keeping a meaningful share of retirement capital invested in South Africa, versus allowing retirement savers the full diversification benefit of an unconstrained global allocation. Reasonable people can and do disagree about where this balance should sit.
5. Recent changes to the limit
The offshore allowance increased from 30% to 45% in an amendment that took effect in January 2023, representing a significant liberalisation of the previous, more restrictive cap. This gave retirement fund trustees considerably more flexibility to build genuinely globally diversified portfolios for their members within the regulated framework.
This change followed years of industry advocacy arguing that the previous 30% cap unduly restricted diversification and exposed South African retirement savers to excessive concentration in a relatively small, emerging-market economy.
6. Can you choose your own allocation?
Whether you have any say over your retirement fund's specific asset allocation depends entirely on your fund type. Some retirement annuities and preservation funds offer a choice between several pre-structured investment portfolios, each independently Regulation 28 compliant but with different risk profiles and offshore weightings within the permitted limits.
Traditional employer-sponsored pension or provident funds typically don't offer individual members this kind of choice, that decision authority sits with the fund's trustees and their appointed asset managers, who determine the specific allocation within Regulation 28's boundaries on behalf of all members collectively.
Key Takeaways
- Regulation 28, issued under the Pension Funds Act, caps how much of a retirement fund's assets can be allocated to specific asset classes and geographies, including a 45% maximum offshore exposure.
- The offshore limit was increased from 30% to 45% effective January 2023, giving retirement fund trustees significantly more flexibility to diversify internationally.
- Regulation 28 applies specifically to retirement funds (pension, provident, retirement annuity), not to individual discretionary trading or investment accounts held directly with a broker.
- Other key limits include a 75% cap on equities generally, a 25% cap on property, and issuer concentration limits to prevent overexposure to any single company.
- The offshore cap is a deliberate policy trade-off, it protects domestic capital markets but also means retirement savings carry more concentrated exposure to the Rand and South African economic conditions than an uncapped global portfolio would.
- Regulation 28 doesn't explicitly address cryptocurrency, but its prudential requirements generally result in minimal to no direct crypto exposure within compliant retirement funds.
Regulation 28 against the current rate backdrop
The 45% offshore allowance inside a retirement fund is a ceiling, not a target, and the case for using it in full depends on conditions that have shifted this year.
Local fixed income now pays materially more than it did. With the repo rate at 7.25% after the September 2026 increase and prime at 10.75%, the return available on rand-denominated interest-bearing assets inside a retirement fund is higher than at any point in the recent cycle. That raises the hurdle an offshore allocation has to clear.
At the same time the SARB has adopted a 3% inflation target, with headline CPI at 4.4% in August. A credible lower inflation target, if achieved, reduces one of the historical arguments for offshore exposure, which was that rand assets were losing purchasing power faster than foreign ones.
The counter-argument has not disappeared. The JSE is concentrated, with a small number of very large companies and heavy resources weighting, which was visible this year when miners alone moved the All Share by about 4.5 percentage points in a single month. Regulation 28 also constrains equity to 75% of the fund, so the offshore decision interacts with the equity limit rather than sitting alongside it.
The practical consequence is that the offshore question inside a retirement fund is no longer a simple yes. It is a comparison between a now-higher local yield and the diversification value of foreign exposure, made under a limit that applies to the fund as a whole rather than to any single holding.
| Regulation 28 limit | Maximum |
|---|---|
| Offshore | 45% |
| Equities | 75% |
| Property | 25% |
| Hedge funds and private equity | 15% combined |
| Single unlisted holding | Capped, see the regulation |
Frequently asked follow-up questions
What exactly does Regulation 28 limit?
Regulation 28, issued under the Pension Funds Act, caps how much of a retirement fund's total assets can be allocated to specific asset classes and geographies, most notably a maximum of 45% offshore exposure (increased from 30% in prior years), alongside limits on equities generally (75%), property (25%), and specific issuer concentration limits to prevent overexposure to any single company or entity.
Does Regulation 28 apply to my individual trading account?
No, Regulation 28 applies specifically to retirement funds, pension funds, provident funds, and retirement annuities, not to individual discretionary trading or investment accounts held directly with a broker. Your personal forex or CFD trading account isn't subject to these asset allocation limits, they only govern how retirement fund trustees and asset managers structure the pooled fund itself.
Why does the offshore limit specifically matter for retirement savers?
The offshore limit directly affects diversification, a fund capped at 45% offshore exposure has meaningfully more concentration in South African assets than an uncapped global portfolio would, exposing retirement savings more heavily to Rand currency risk and domestic economic conditions specifically. This is a deliberate policy trade-off between protecting domestic capital markets and allowing retirement savers full global diversification.
Has the offshore limit under Regulation 28 changed recently?
Yes, the offshore allowance was increased from 30% to 45% in an amendment that took effect in January 2023, a significant liberalisation giving retirement fund trustees considerably more flexibility to diversify internationally than under the previous, more restrictive limit.
Does Regulation 28 prevent retirement funds from investing in crypto assets?
Regulation 28 doesn't explicitly name cryptocurrency, but its general prudential requirements, and the specific asset class caps that do exist, mean most compliant retirement funds hold minimal to no direct crypto exposure, if any exposure exists at all it's typically through indirect, tightly limited allocations rather than significant direct holdings.
If I disagree with my retirement fund's asset allocation, can I choose my own?
This depends entirely on your specific fund type, some retirement annuities and preservation funds offer a choice between several pre-structured portfolios (each still Regulation 28 compliant), while traditional employer pension or provident funds typically don't offer individual member choice over the underlying asset allocation, that decision sits with the fund's trustees and appointed asset managers.
