The Office of the Pension Funds Adjudicator (OPFA) has announced that complaints about withdrawal benefits remain the most dominant category of complaints it investigated and closed in the year under review.
According to the OPFA, this is in conjunction with non-compliance with section 13A (non-payment of contributions by participating employers).
The Office of the Pension Funds Adjudicator (OPFA) describes itself as a statutory body established to resolve disputes in a procedurally fair, economical, and expeditious manner. The adjudicator's office investigates and determines complaints of abuse of power, maladministration, disputes of fact or law, and employer dereliction of duty regarding pension funds.
This information is contained in the annual report of the Pension Funds Adjudicator (PFA) which it presented in Parliament.
The OPFA said 9,177 new complaints were received for the 2023/24 financial year, which translates into an average of 765 complaints a month.
"This was a marginal decrease of 0.14% when compared to the previous year and an increase of 3.60% when compared to the 2021/22 financial year," it said.
A total of 8 399 complaints were investigated and finalised as either determination, out of jurisdiction, or settlements. In total, this represents an increase of 25% in the number of cases closed compared to the previous year.
"In keeping with its mandate to resolve complaints expeditiously, 77% of complaints finalised as either determination, out of jurisdiction, or settlements were done within six months. However, this represents a decrease of 5% compared to the previous year," the OPFA said.
Pension Funds Adjudicator Muvhango Lukhaimane said: “Some of the decreases can be attributed to certain retirement funds that are habitually uncooperative by failing to provide proper responses to complaints or funds undergoing some form of regulatory intervention by the Financial Services Conduct Authority (FSCA) where the grievances raised by complainants are of secondary concern to the statutory manager".
The Private Security Sector Provident Fund (PSSPF) remained the largest contributor to new complaints with a total of 3 654 lodged by members of the PSSPF, the OPFA said.
According to Lukhaimane, the requirement for compulsory membership in the PSSPF for security guards remains questionable, as employers continue to evade their obligation to pay contributions, and this problem has evolved into an “acceptable business practice” for the private security industry, notwithstanding the existence of a collective bargaining agreement, an independent regulator in the private security sector, and criminal consequences for defaulters in terms of the Pension Funds Act.
“The PSSPF board of management appears to be unwilling to hold defaulting employers liable with the majority of complaints arising from individual members as and when they become entitled to benefits," she said.
Lukhaimane said the PSSPF has been encouraged to monitor, identify, and act against its defaulting employers as it is required to do in terms of legislation.
“Adding to the problem, the PSSPF and its administrator are failing to allocate contributions paid by compliant employers timeously, leading to delays in the processing of benefits," she said.
Rather than just determining all the complaints it receives, the Office of the Pension Funds Adjudicator said it also seeks to maintain the trust between funds and their members by using the refer-to-fund (RtF) process.
It said During the RtF process, it facilitates the lodging of a complaint with the fund for internal dispute resolution.
Lukhaimane said a notable number of disputes have been resolved in this manner without the need for a formal complaint to be registered and investigated.
“The RtF process has been largely welcomed by the industry and it continues to mature for those funds that do not have compliance issues,” she said in the 2023-2024 annual report of the OPFA.
“During the year under review, 699 disputes were resolved via the RtF process, which is approximately 10% higher than in 2022/23.
“For those funds that failed to take advantage of this process, however, it is hoped that with time, constant encouragement, and an increase in compliance-related regulations, all funds will fully embrace the RtF process as a means of addressing dissatisfaction with their members and increasing trust in the system,” said Lukhaimane.
The OPFA said persons aggrieved with the decisions of the PFA are permitted by law to either make an application to the High Court or apply for reconsideration at no cost to the Financial Services Tribunal (FST).
"During the year under review, 81 applications were made and 69 decisions were issued by the FST. Among these 54 upheld PFA decisions whilst 15 were remitted for reconsideration by the OPFA," it said.
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