Pension Fund reported to the FSCA for misconduct

Pretoria - The Pension Funds Adjudicator has severely criticised the South African Local Authorities Pension Fund for its failure to respond to repeated requests for information and has reported the fund's misconduct to the regulator.
 
Muvhango Lukhaimane said there were several complaints against the fund and the lack of response from the fund reflects a disregard of the Pension Funds Act, its rules and the best interests of members. She has reported the fund to the Financial Services Conduct Authority (FSCA) for action to be taken against its officials.
 
The complainant who had been employed by the South African Police Service was unhappy with the amount received as his withdrawal benefit. He requested the Office of the Pension Funds Adjudicator (OPFA) to investigate whether or not the employer had failed to remit all contributions on his behalf to the fund as this would have affected the quantum of his withdrawal benefit.
 
When asked by the OPFA to respond to the complaint, the fund failed to file a response addressing this issue. The lack of response from the fund forced the Pension Funds Adjudicator to proceed with determining the matter.
 
Lukhaimane said in her determination the fund's non-compliance is "intolerable" as it points to several contraventions of the Act and also reflects poor conduct of duty. The fund's unreasonable delay in responding to the complaint could not entertained as it prejudiced the complainant.
 
She said her office deals with high volumes of complaints which need to be disposed of expeditiously in order to properly fulfil its mandate.
 
"It is, therefore, incumbent upon pension funds and administrators to ensure that enquiries from the Adjudicator are properly and adequately responded to. This is especially so since boards of funds and Principal Officers are required to be fit and proper.
 
"The failure to respond to enquiries and to timeously response to complaints by such persons is a failure to uphold their fiduciary responsibilities. It impedes on the Adjudicator's ability to deliver on its mandate, and if allowed to continue, will render the Adjudicator ineffective. It also constitutes a barrier to the complainant being able to have their complaint properly resolved," said Lukhaimane.
 
She said when the administrative wheels of a fund come off, it starts off with the fund's failure to respond to complaints that require data from its administration system relating to payment of contributions.
 
"The administrator in this instance is Fairsure Administration (Pty) Ltd, and all indications are that there is an issue with the receipt and allocation of contributions. It is, therefore, imperative that the FSCA acts with haste, in order to avoid further prejudice to members," Lukhaimane said.

In her determination, she ordered the fund to reconcile the contributions received and to advise the employer of any outstanding contributions. Further, the fund was ordered to provide the complainant with a breakdown of his contributions and a breakdown of his withdrawal benefit.      
 
The employer was ordered to pay to the fund any arrear amounts. The fund was ordered to pay the complainant any outstanding fund credit which consists of the arrear contributions.