The Pension Funds Adjudicator is taking bold steps to enhance accountability among retirement funds, targeting non-compliance with complaints and ensuring that members' rights are upheld in a rapidly evolving financial landscape.
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The Pension Funds Adjudicator (PFA) is stepping up its enforcement measures to ensure that retirement funds and administrators comply with their obligations to address member complaints in a timely manner. This initiative reflects a growing commitment within the financial services sector to enhance governance and improve the handling of grievances lodged by members.
During the 30th Annual Pension Lawyers Association Conference, the Adjudicator, Lebogang Mogashoa, highlighted alarming trends where certain retirement funds and their administrators are blatantly ignoring complaints, either offering delayed responses or failing to address the core issues raised. Mogashoa acknowledged that while progress has been made, persistent incidences of non-co-operation are hindering the effective functioning of the Office of the Pension Funds Adjudicator (OPFA).
In a decisive move to remedy this situation, Mogashoa announced plans for the OPFA to establish more robust mechanisms aimed at compelling these funds to co-operate with investigations. The office has consulted Senior Counsel regarding Section 30J of the Pension Funds Act, a provision that empowers the Adjudicator to adopt flexible investigative procedures, including the ability to issue subpoenas against non-compliant funds and administrators.
Such subpoenas will hold significant individuals accountable, specifically targeting the Principal Officer and Chairperson of the boards of offending funds. Non-compliance with a summons can lead to serious consequences, including criminal charges and civil contempt proceedings, ensuring that accountability does not stop at middle management.
As Mogashoa shared insights about the challenges facing his office, he pointed out the influence of external factors affecting the pensions landscape. The economic environment has led to increased member withdrawals, while a growing awareness among consumers about their rights has seen a surge in sophisticated complaints lodged with the OPFA. The office aims to resolve as many complaints as possible within six months and has been reforming internal processes to foster greater efficiency.
In an effort to bridge physical access gaps, the OPFA plans to enhance its access points over the next five years, catering to members who prefer face-to-face engagement. Despite the current office locations in Pretoria and Johannesburg, Mogashoa reasserted the importance of retaining skilled personnel to maintain the OPFA’s operational efficacy.
Pension Funds Adjudicator Lebogang Mogashoa
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Mogashoa also discussed impending legislative reforms, specifically the Conduct of Financial Institutions (CoFI) Bill. This new legislation is expected to consolidate numerous laws under a unified market conduct framework, increasing the jurisdiction and capacity of the OPFA to address complex complaints arising within the retirement fund sector.
Statistics from the recent financial year revealed that a staggering 51% of finalised complaints pertained to Section 13A of the Pension Funds Act, which mandates employers to remit pension contributions. Many employers have been non-compliant, resulting in workers using anonymous tip-off lines out of fear of employer retaliation. These complaints, once limited to specific industries, are now emerging across various sectors.
Furthermore, Mogashoa noted challenges surrounding Section 37C, which focuses on the distribution of death benefits. He expressed concern over delays observed when funds neglect to actively investigate claims, referencing a case unresolved for over two decades. Mogashoa urged funds to take responsibility for thorough investigations, rather than relying on potentially dubious affidavits.
The PFA’s commitment to fostering a more accountable and responsive financial services sector signals a crucial step towards enhancing members' rights and protecting their interests in the face of adversity.
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