Pensions adjudicator seeks big levy increase in 2026/27

The Office of the Pension Funds Adjudicator (OPFA) is proposing to increase its levy for the 2026/27 financial year by 15% (R1.59).

The OPFA said the above-inflation increase is intended to cover additional staffing costs arising from a significant increase in complaints and to provide adequate funding for its operational reserve account.

The Office’s proposed budget indicates that staff expenses will increase by 12% in 2026/27 over those in 2025/26. The Office said this was largely the result of adding new staff to its case management unit, to respond to the increased number of complaints linked to, among other things, the two-pot retirement system.

If implemented, the levy increase will result in retirement funds paying R12.46 per eligible fund member instead of R10.87 in 2025/26.

The proposed increase exceeds the estimated Consumer Price Index for 2026/27, so the Minister of Finance will have to table the proposal for Parliament’s approval, in terms of section 10 of the Financial Sector and Deposit Insurance Levies Act.

The Adjudicator’s Office receives levies from retirement funds, based on a formula that considers the number of eligible fund members from the preceding year and a levy rate that must cover all the OPFA’s expenses, including capital expenditure and a 15% contingency reserve.

The OPFA’s reserve account is intended to meet expenses during the gap between the approval of its budget and the Financial Sector Conduct Authority’s invoicing retirement funds for the approved levies and collecting them. The Office said that over the past two financial years, the process has taken more than nine months.

The OPFA is funded almost entirely from levy income – only 1% is derived from interest income. The formula in Table E in Schedule 5 to the Levies Act sets out how the OPFA’s levy must be calculated.

The formula comprises a base amount and a variable amount. The OPFA does not propose to increase the base amount of R0.

The variable amount – R10.87 in 2025/26 – is multiplied by the number of eligible retirement fund members. These are members and other persons who receive regular payments from a retirement fund as reflected in the fund’s latest annual financial statements submitted to the FSCA on 28 February of the preceding levy year. Beneficiaries and members with unclaimed benefits are excluded.

The number of eligible fund members was reported to be 10.7 million at the end of February 2025, which is a decrease from 10.9 million in the prior year.

There is no cap on the maximum levy that a fund can pay to the OPFA.

Budget proposals

For the 2026/27 financial year, the OPFA is budgeting for gross revenue of R121 million, which 7% higher than the R113m budgeted for in 2025/26. The budget provides for general expenditure of R115m, up by 9% from 2025/26 (R106m), and capital expenditure of R5.8m, which is 17% lower than in 2025/26 (R7m).

The general expenditure of R115m comprises staff expenditure of R73m, which is 12% higher than in 2025/26 (R65.3m), and operating costs of R42m, 4% higher than in the previous year (R40.3m).

Of the total expenditure budget, staff expenses represent 60%, general expenditure represents 35%, and capital expenditure represents 5%.

Click here to download the OPFA’s budget and levy proposals for 2026/27.

Submissions on the proposals must be made on the comments template and sent to levycomments@pfa.org.za by 4 November.