Poor governance within funds and administrators is the reason behind most complaints to the pension funds adjudicator, it has emerged.
Adjudicator Muvhango Lukhaimane said, after releasing her office’s 2017-2018 annual report, that fund members have been forced to complain after things that should have been dealt with are left hanging, resulting in thousands of complaints and stretched resources at her office.
“Fund members are forced to approach the [adjudicator] on a myriad of issues that should be attended to by funds in the ordinary course of business,” Lukhaimane said
The most common problems are non-payment or late payment of contributions by employers, and the funds and administrators not paying out benefits. An employer withholding payments to a fund is not a technical issue, but theft of a member’s pension, she said.
Retirement funds are obliged by law to monitor the payment of contributions into the fund and to report to the trustees when contributions are not paid within a stipulated timeframe.
The adjudicator can order an employer to pay and her judgments can be executed, meaning a sheriff can attach the assets of an employer. If the trustees of the fund are able to identify company managers and directors responsible for payments, their assets can be attached.
The law was changed four years ago making it a criminal offence for employers to withhold contributions they are obliged to pay, however successful prosecutions are rare...