The Office of the Pension Funds Adjudicator (OPFA) says it is moving to implement stronger enforcement measures against retirement funds and administrators that fail to respond properly to complaints, including the use of summonses and subpoenas.
Addressing the Pension Lawyers Association Conference last month, Pension Funds Adjudicator Lebogang Mogashoa (pictured) said his Office is addressing persistent non-cooperation that hampers investigations. This includes failures to respond to complaints timeously or at all, repeated requests for extensions, and submissions that do not comprehensively address the substance of complaints.
The OPFA has obtained a Senior Counsel opinion on the use of section 30J of the Pension Funds Act, which allows the Adjudicator to determine appropriate procedures for investigations, including inquisitorial processes. The provision also states that certain sections of the Commissions Act apply to investigations by the Adjudicator.
According to the opinion, these provisions enable the Adjudicator to issue summonses and subpoenas, in terms of the Commissions Act, to compel funds and administrators that fail to file responses to cooperate with investigations. Mogashoa indicated that such measures would be directed at the principal officer and chairperson of the board of the relevant fund, placing accountability at a senior level.
Failure to comply with a summons or subpoena issued under the Commissions Act constitutes a criminal offence and may also be enforced through civil contempt proceedings. The OPFA is working on establishing the necessary systems to implement these processes.
Mogashoa said the move forms part of a broader focus on improving complaints handling and governance in the retirement fund sector, particularly as regulatory expectations continue to evolve.
He noted that external factors are contributing to increased pressure on the OPFA, including economic conditions leading to higher levels of fund withdrawals, greater consumer awareness of rights, increased familiarity with the ombud system, and increasingly sophisticated complaints.
The OPFA continues to target the resolution of complaints within six months, with ongoing internal reforms aimed at improving efficiency. While the Office is based in Pretoria, with an additional access point in Johannesburg, there are plans to expand its physical footprint over the next five years to improve accessibility for complainants. Mogashoa said attracting, developing and retaining skilled staff remains critical to ensuring the Office operates efficiently.
Mogashoa also highlighted the anticipated impact of the Conduct of Financial Institutions Bill, which is expected to introduce a consolidated market conduct framework and expand the OPFA’s jurisdiction.
Operational challenges remain evident in specific areas. Complaints relating to section 13A of the PFA, which deals with the payment of contributions by employers, accounted for 51% of all matters finalised in the most recent financial year. Non-compliance by employers remains a concern, with some employees resorting to anonymous tip-offs because of fear of reprisal.
These complaints, previously concentrated in the private security sector, are increasingly seen in umbrella and municipal funds. Funds are increasingly lodging complaints on behalf of members, although delays in doing so can result in claims becoming time barred. Mogashoa also noted that some funds avoid seeking section 13A orders against responsible persons to preserve client relationships, which he described as a conflict with their fiduciary duties.
Delays are also occurring in the distribution of death benefits under section 37C. Mogashoa said some funds are not taking sufficient steps to investigate claims, instead waiting passively for information. He cited a case that has remained unresolved since a member’s death in 2000.
He urged funds to take a more proactive approach to investigations, including verifying information obtained during the process rather than relying solely on affidavits.
