The Pension Funds Adjudicator has reported the South African Local Authorities (SALA) Pension Fund to the Financial Sector Conduct Authority for failing to respond to repeated requests for information.
The Adjudicator, Muvhango Lukhaimane (pictured), said in her determination last month there were several complaints against the SALA Pension Fund, and the lack of response from the fund reflected a disregard of the Pension Funds Act, the fund’s rules, and the best interests of members.
She forwarded a copy of the determination to the FSCA, expressing the hope that “some form of action” will be taken against the fund’s officials, considering the “ever-increasing complaints against the fund that go unanswered”.
The complainant, who was employed by the South African Police Service, was unhappy with the amount received as his withdrawal benefit. On 17 December 2024, he asked the Office of the Pension Funds Adjudicator (OPFA) to investigate whether or not SAPS had failed to remit all contributions on his behalf to the fund, because this would have affected the quantum of his withdrawal benefit.
The OPFA notified the fund and SAPS of the complaint on 6 January 2025 and gave them until 5 February to resolve it. On 7 February, the OPFA reminded the respondents that the matter remained unresolved, and they were requested to file their responses by 27 February. On 27 February, acknowledgement was received from the fund.
Follow-up letters were sent to the respondents on 28 February, giving them until 11 March to respond. On 9 April, they were given a further opportunity to file their responses by 21 April. No response was received despite several follow-ups in this regard, the determination stated.
The Adjudicator decided to determine the matter in the absence of the fund’s submissions because of the extended period that had lapsed since the fund was first notified of the complaint.
She said granting any further extension would not serve the interests of justice because it could perpetuate any prejudice suffered by the complainant.
Lukhaimane said her office deals with high volumes of complaints that 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 history shows that when the administrative wheels of a fund come off, it starts with the fund’s failure to respond to complaints that require data from its administration system relating to the 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.
The Adjudicator 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.
She ordered SAPS to pay to the fund any arrear amounts. The fund was ordered to pay the complainant any outstanding fund credit that consists of the arrear contributions.
No increase since 2018 for saps from Sala pension fund