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AFRICA FOOT PRINT

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Pension complaints balloon by about 10 000

Cape Town – South Africa’s Pension Funds Adjudicator Muvhango Lukhaimane received close to 38% more complaints from pension fund members in the 2015/16 financial year.

In the entity’s latest annual report, Lukhaimane said 9 667 new complaints were received, while she made 83% of rulings in favour of the complainants, while a mere 17% were dismissals.

“Sadly the high number of complaints received by the office points to a lack of service excellence and voluntary compliance on the part of funds,” she said.

In the past financial year, claims that relate to withdrawal benefits – especially delays in the payment of these benefits and disputes over the amount – made up almost 70% of all complaints that were finalised.

Lukhaimane was, however, concerned about the number of complaints her office received from so-called tracers – agencies appointed by funds to find beneficiaries of payments. These tracers claim a fee for their services, while the service offered by the Pension Funds Adjudicator are free of charge.

She requested pension funds to improve upon their communication to their members, advising them of the existence of her office and to make a bigger effort to publicise unclaimed benefits.

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The bulk of complaints received were from Gauteng and the Eastern Cape, Lukhaimane said. She singled out the Eastern Cape where there has been an “exponential increase” in the number of complaints lodged.

A significant number of complaints she received were settled without having to make formal determinations. “These related to instances where a delayed payment would be made only after the Adjudicator forwarded the complaint to the respective fund.”

According to Lukhaimane, the bulk of complaints show that funds pay benefits to members anything from three months to six years after the date on which the benefit was due.

Almost 40% of the complaints the Pension Funds Adjudicator received hailed from the Private Security Sector Provident Fund (PSSPF), Lukhaimane said.

“The situation with the governance and operations of this fund has repeatedly been brought to the attention of the Financial Services Board (FSB), but to date the office remains unaware of any action taken against the fund.”

For the year under review, the Office of the Pension Funds Adjudicator had cash and cash equivalents to the value of R1.572m. It ended the 2015/16 financial year with a deficit of R8.245m, but the auditor-general noted that the entity maintains “adequate resources by monitoring rolling cash flow forecasts of the cash and cash equivalents on the basis of expected cash flows”.

In addition, the entity’s income and operating cash flows are “substantially independent” of changes in interest rates.

 

Source: Fin214