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Pension and Provident Funds

Complaints with the Pension Fund Adjudicator

By 30/10/2010 No Comments

The Office of the Pension Fund Adjudicator (PFA) was established in 1998.  There have been four Adjudicators since then, and the current incumbent is Charles Pillai who was until recently the Financial Advisers and Intermediaries Services Ombud.

In its simplest terms, the PFA was established to ensure a fair, inexpensive and expeditious method of settling disputes and complaints.  The office must ensure that its services are accessible to all and that any disputes and complaints can be settled quickly and fairly.  Complaints may be lodged at the offices of the PFA by a member or former member; a beneficiary or former beneficiary; a Board member, or the Board of trustees of any fund; and in fact any person who may have an interest in any dispute.  Complaints may be lodged against the Fund, the trustees, the employer or an employee, and the Adjudicator can make any order that a Court can make.  Any determination made may be executed upon, and the aggrieved party has six weeks to bring an appeal against the determination.

The PFA has no jurisdiction over funds to which the government contributes – such as the Government Employees Pension Fund, for example.

Any person who has a complaint must bring that complaint within 3 years from the date when the complaint arose. No claims or complaints brought after that 3 year period would be considered by the PFA.

The complaint must be in respect of maladministration by the fund and the complainant suffered prejudice as a result of that maladministration.  Other grounds are that the fund or the trustees acted outside of their powers – ultra vires, or, that the complaint is one of a dispute of fact or law, or, that the employer has not acted or fulfilled its duties in terms of the rules of the fund.

In terms of Pension Funds Act,the complainant must address a letter of complaint to the fund, the employer or the board, setting out the reason for the complaint, the basis of the complaint and any facts supporting the claim. The respondent has 30 days within which to reply to the complaint and if it does not do so, or if this response does not satisfy the complainant the complainant may then bring the complaint to the office of the Pension Fund Adjudicator.

The Adjudicator will then request a response from the fund or employer and if necessary he may request further evidence or documentation in order to clear up any anomalies that may exist and make the determination.  That decision has the full force and effect of a judgment of a court of law and the successful party may execute on it.

The PFA also instituted a process where the parties are assisted to settle the dispute by appearing at a conciliation hearing where the issues are discussed, debated and an effort ,made to settle the complaint and if no settlement can be reached, it is referred to the Adjudicator for a determination.

At a PLA report back held recently, a senior member of staff presented some comments on the current state of the office.

He raised a number of concerns;
Many of the complaints – up to 40{bb7c59228909ee3c635bb54164678f79c6c2320af74994b444cd69be7e87e9c7}, should not have been brought to the PFA
Many funds and administrators did not have a first port of call to deal with and resolve these complaints
The PFA is used as a post office for complainants who should have made the formal letter of demand early on, and taken such steps as he could to resolve the issues which, for the most part are fairly “simple” such as non-payment of claims, not disinvesting timeously on a member’s withdrawl from a fund, or death
Many respondents did not react to the complaint at hand or the issues raised
Many respondents referred to rules and then did not annex them
The gist of the presentation was that there was a perception by complainants that the PFA must resolve the issues.  This was not the function of the office and the funds and complainants should be doing more to try and settle the disputes which before bringing them to the Adjudicator.

There were serious concerns with the conciliation process and the Adjudictor was aware of the problems and these problems were being addressed.

The basic education of the members, employers and other stakeholders was lacking in most respects and the communication (or rather the lack thereof) was causing problems – particularly where the benefits and the amounts of those benefits were concerned.

The main thrust was that the “simple” dispute, those that could be easily settled by the parties talking to each other, needed to be weeded out, and he expressed the wish that the complainants would first approach the respondents and discuss the matter fully without the necessity of any need for referral to the Pension Fund Adjudicator’s office.  It was likely that these upfront discussions would go a long way to resolving the complaints without the necessity of going to court or approaching the PFA.  This would free up the office for resolving difficult disputes and would be more in line with the stated mission of the Adjudicator’s office in making the complaints procedure simple, expeditious and effective.

Ian Mc Laren

Ian Mc Laren

Ian McLaren BA LLB (WITS) General Educated St Johns College, Houghton. BA LLB University of the Witwatersrand 1984 Founded McLarens Attorneys September 1986. Right of Appearance High Court, October 1996. Expertise Litigation, Labour Law, Commercial Law, Family Law, Pension and Provident Funds, Customs and Excise, Wills, Deceased Estates, Trusts, Commercial Agreements, Reviewing and Drafting Government Legislation, Information Technology. Committees/ Trusts Law Society of South Africa Information Technology Committee. Trustee Verney College Educational Trust Other Transvaal Provincial colours for Practical Shooting. Third degree Black Belt JKS Karate. Photographer and motor cyclist Lectured for Continuing Legal Education on Information Technology issues.