Pension fund withdrawal issues are the main complaints handled by the arbitrator

The majority of complaints finalized by the pension fund arbitrator during his fiscal year ended at the end of March came from people who had not yet received or had only partially received their retirement savings when they left their pension fund. .

In its annual report published this week, the adjudicator’s office reveals that of the 10,940 complaints finalized in fiscal year 2020/21, 52.9% concerned retirement fund withdrawal indemnities.

The late payment or non-payment of pension benefits may be due to lax administration practices on the part of the fund administrator, incomplete or out-of-date participant documents or, more worryingly, the fact that the member’s employer did not pay the contributions to the fund or even failed to register the member with the fund in the first place, while deducting the contributions from the member’s salary.

Complaints relating to non-payment of contributions to the pension fund by employers (non-compliance with Article 13A of the Law on Pension Funds) come second, at 23.9%, according to the annual report .

Another area of ​​complaints that seems to occupy much of the time of pension fund arbitrator Muvhango Lukhaimane and his staff is the distribution of death benefits. As detailed in last week’s article, “Paying Retirement Benefits on Death – It’s Complicated” (go to, fund trustees often have a heavy task in deciding to whom these services should be allocated. distributed, and disputes often arise. Almost 7% of the complaints resolved concerned the payment of death benefits, as governed by section 37C of the Act.

Lukhaimane said clarity continues to be provided to the funds by his office, the Financial Services Tribunal, various high courts and the Supreme Court of Appeal on the interpretation of Section 37C.

“It is more prudent for funds and administrators to invest in training initiatives within their boards or organizations to ensure that the technical expertise or knowledge on how to process death benefit payments are shared and maintained. The absence of these is clear from issues that are misinterpreted, as these are often not complex at all and do not raise new issues, ”said Lukhaimane.

The biggest delinquent

The Private Security Sector Provident Fund (PSSPF) remains the main source of complaints, according to the report. This fund serves the employees of countless private security companies across the country, and has long been a source of concern among regulators.

The Financial Sector Conduct Authority (FSCA) conducted an on-site supervisory inspection of the PSSPF in November 2017. Following its findings, the FSCA requested the appointment of trustees to take control of the activities of the PSSPF and, together with the fund agreement. , appointed statutory managers to the fund’s board of directors in September 2018. Statutory managers commissioned an independent forensic investigation into the PSSPF, while FSCA conducted an investigation into the affairs of the PSSPF and the appointment of SALT Employee Benefits as a service provider for the fund. As a result of the findings from these interventions, the FSCA initiated regulatory action against various parties.

“This regulatory action is an ongoing and confidential process, under section 251 of the Financial Sector Regulation Act, and although the FSCA cannot disclose any further details of its findings, it can assure the public that the matter is receiving due attention, “FSCA said in a recent statement.

The Arbitrator’s Annual Report indicates that, “under statutory management and having increased its capacity to handle complaints (both in terms of systems and case administrators), the CFPSP’s turnaround times have been little improved.

“The only outstanding concern remained the quality of the responses which required follow-ups and the fact that the fund had not taken advantage of the revised complaints management process because there was no attempt on its part to resolve the complaints directly. with members. “

Treat customers fairly

In the report, Lukhaimane said she constantly worries that financial service providers are not respecting the Fair Treatment of Customers (TCF) results.

Regulated service providers are expected to deliver the following six TCF outcomes to their customers throughout the product lifecycle, from product design and promotion, through advice and service, to processing. complaints and complaints:

1. Customers can be confident that they are dealing with companies where TCF is at the heart of the corporate culture.

2. Products and services marketed and sold in the retail market are designed to meet the needs of identified customer groups and are targeted accordingly.

3. Customers receive clear information and are kept appropriately informed before, during and after the point of sale.

4. When advice is given, it is appropriate and takes into account the client’s situation.

5. Products perform as businesses have led customers to expect, and service is at an acceptable level and as expected.

6. Customers do not face unreasonable after-sales barriers imposed by companies to switch products, switch suppliers, submit complaints or file complaints.

“In all, [the failure to deliver] the first four results represent 97.3% of all complaints. So it can be safely concluded that funds, administrators and employers must put in place measures to improve TCF results and they must be held accountable in order to improve the member experience, ”said Lukhaimane.

Source link

Previous Full relaunch of the investment cycle could be in a few months: Bank of Baroda
Next Biden makes remarks as US nears federal borrowing limit