Gigaba said the National Treasury was concerned about many cases involving mismanagement of the funds. He said the non-payment of contributions by employers continued unabated and flew in the face of regulations.
He said pension funds adjudicator Muvhango Lukhaimane should be hailed for the decision to levy monetary penalties against retirement funds that failed to conduct proper investigations into the dependants of a deceased member to effect an equitable distribution of a death benefit.
“Such dereliction of duty can be a life or death matter for beneficiaries that suddenly find themselves without financial support and are condemned to a life of destitution while their breadwinner’s funds lie idle in a retirement fund account, a fact attested to by the billions that remain unclaimed in retirement funds,” Gigaba said
He added Lukhaimane and her team recorded another year of good performance.
Financial Services Board chairperson Abel Sithole said the Office of the Pension Funds Adjudicator (OPFA) had been able to finalise matters expeditiously during the 2016/17 financial year.
Sithole said at least 75percent of determinations were handed down within six months of receipt of complaints and 90percent settled.
“It is heartening that the OPFA has undertaken that these turnaround times will improve even further in the next financial year as investigative processes improve.”
Sithole added it was, however, distressing that more than 80percent of responses from retirement funds were only received within two and three months of requests, delaying the resolution of members’ complaints.
“Retirement funds often wait for repeated letters before responding. It must be noted that this practice burdens the OPFA, both in terms of human and financial resources that could be better spent improving its services,” said Sithole.
The OPFA said it had identified gaps during the period against the treating customers fairly framework. The framework is an outcomes-based regulatory and supervisory approach designed to ensure that specific, clearly articulated fairness outcomes for financial services consumers are delivered by regulated financial firms.
The OPFA said most of the complaints related to failure by the funds to provide members with sufficient and clear information that would enable them to make informed choices when acquiring financial products; post-sale barriers when a member wanted to transfer his/her retirement annuity to another financial institution and the levying of causal event charges on the fund value.
Sithole said this pointed to a pension funds industry that was not in good health as far as governance and conduct were concerned.
- BUSINESS REPORT