Pensioners start getting surplus payments
Payments totalling more than R500 million have started to be made to thousands of members of eight retirement funds that were stripped of their surpluses by their sponsoring employers in the 1990s.
The collection of the money – mainly from retirement fund administrators Alexander Forbes and Sanlam, which facilitated the surplus-stripping for distribution – follows tough and often no-holds-barred court battles fought by Tony Mostert, the liquidator and curator of the funds.
The surplus apportionment scheme of the Mitchell Cotts Pension Fund was approved by the Financial Services Board (FSB) in February 2011 and the surplus apportionment schemes of the Lucas SA Pension Fund, Prestolite Pension Fund, Picbel Groepvoorsorgfonds, Sable Industries Pension Fund, Datakor Group Pension Fund, Datakor Group Retirement Fund and Cortech Pension Fund were all approved in May 2012.
The finalisation of a surplus apportionment scheme for the Power Pack Pension Fund depends on the outcome of investigations into two Cullinan Group retirement funds. The Power Pack fund and the two Cullinan Group funds were also victims of surplus-stripping in the 1990s.
The total amount to be distributed to members of the eight funds was valued at R571 million in February 2012.
The payments to pensioners are being undertaken and overseen by the administrator of the retirement funds, Old Mutual.
Pensioners with inquiries can contact the Old Mutual call centre on 0860 504 504.
The battles to reclaim the surpluses have seen the launch of defamatory smear campaigns, particularly by Simon Nash, chief executive of appliance company Cadac, who is on trial on charges of fraud, theft and contravening the Prevention of Organised Crime Act arising from his alleged stripping of surpluses from the Sable and Powerpack/Cullinan retirement funds.
The Cadac Pension Fund was also placed under provisional curatorship almost two years ago, with allegations in FSB applications that, among other things, Cadac Pension Fund money has been used to fund the defence costs in Nash’s criminal trial.
The Nash camp alleges that the FSB places retirement funds under curatorship simply to enrich curators. These allegations have included defamatory claims, unsupported by any evidence, against numerous individuals.
Finance Minister Pravin Gordhan has strongly condemned the smear campaign.
A website (registered in Zimbabwe) was launched anonymously last month, publishing claims similar to those on a website registered in the name of Nash’s wife, Elena Fourno Nash. The Fourno Nash website was closed down after various parties, including Independent Newspapers and its publication, Personal Finance, threatened the Nash camp with an urgent interdict.
Nash has avoided answering questions about whether he or anyone associated with him is associated with the new web- site. Instead he has continued with the smear campaign.
In a statement issued last month, Abel Sithole, chairman of the FSB Board, said the board is dismayed by the escalating attacks published in various media on its officials and employees.
Sithole says the “individuals orchestrating these attacks have either been implicated in inspections carried out by the FSB, are facing criminal charges or are otherwise engaged in litigation with the FSB”.
The false allegations made against FSB officials include that they:
* Perform their functions in a manner resembling “a crime syndicate”;
* Collude with third parties in breach of the law;
* Abuse their powers;
* Extort money from regulated entities;
* Mislead the Minister of Finance, Parliament and the public;
* Fabricate inspection reports in order to justify curatorship applications;
* Act with ulterior motives; and
* Have committed perjury.
Sithole says the board is satisfied that the allegations are devoid of any truth and will, in due course, be found to be without substance. However, he says the board will not retaliate “when litigation is pending with these parties”.
Referring to criticisms of the amounts paid to curators and liquidators, Sithole says the board is satisfied that the remuneration is in line with the relevant court orders, the curators’ and liquidators’ agreements with the FSB, and the Pension Funds Act.
Although the total amount earned seems high, the board “is satisfied that it was mainly as a result of the extraordinary successes in recoveries made that the fees have been earned.
“Although the board did not foresee or anticipate the extent to which the curators/liquidators would be successful in making these recoveries, it is satisfied that, without the persistent efforts of the curators/liquidators over many years, there would have been little benefit for the pensioners and former members of the funds, who are, at this moment, receiving their entitlement,” Sithole says.
FUND MEMBERS WARNED NOT TO RESPOND TO ADVERT
Members of retirement funds that were subjected to surplus stripping by employers in the 1990s have been warned not to respond to an advertisement that was published in a Sunday newspaper asking them to call a telephone number.
The curator/liquidator of the affected retirement funds, Tony Mostert, says the advertisement, has been structured to imply that it was placed by the funds. “This not the case.”
He says that on contacting the number the pensioners are asked to email to a person named Johan Beukes confidential information including a photocopy of their identity document.
“Nothing should be sent to Mr Beukes. He has absolutely nothing to do with the eight retirement funds,” Mostert says.
He says no reason is given for the advertisement, and he has established it was placed by the law firm Louis H Garb & Raymond Joffe.
When Mostert attempted to establish the purpose of the advertisement and onwhose behalf, if anyone’s, the legal firm is acting, Garb replied: “We owe you no explanation and neither are we in any way obliged to disclose to you who our clients are.”
Mostert says this is absolutely unacceptable, because pensioners, who have already suffered because of the attack on the surpluses in their retirement funds, could again be subjected to financial risk.
Mostert says that the pensioners of the funds should not react to any approach that does not come from him, Old Mutual, ICTS, Datafactory or his legal firm, A L Mostert.
Any pensioner concerned about any approach should telephone Jean Polson at 011 463 0941.
When Personal Finance contacted Beukes he would not identify himself properly. He at first claimed: “We represent the retirement funds.”
When asked specifically if he represented the curator/liquidator as the person who legally controlled the affected funds, he skirted around the question.
He then claimed: “We represent the pensioners.”
Beukes would not say when any, let alone all, of the affected pensioners nominated him to represent them and why an advertisement was needed to contact pensioners he already claimed to represent.
Yesterday, Garb failed to meet a deadline given to him to answer questions from Personal Finance about the role of his company in the placing of the advertisement.
Note: In previous unrelated surplus distributions, as well as in the demutualisation of Old Mutual and Sanlam, various third parties sought to represent retirement fund members and/or policyholders.
The third parties claimed they could assist retirement fund members and policyholders to access their entitlements earlier or ensure they received the entitlements. The third parties claimed substantial fees for representing these people, who would have received the entitlement anyway.
The only effect of these interventions was to reduce the entitlement of retirement fund members.