Statutory body the Office of the Pension Funds Adjudicator (OPFA) has reported the South African Local Authorities Pension Fund to regulator the Financial Services Conduct Authority (FSCA), recommending that action to be taken against its officials.

Pension Funds Adjudicator Muvhango Lukhaimane said there had been several complaints against the fund and the lack of response from the fund reflected a disregard of the Pension Funds Act, its rules and the best interests of members.

She severely criticised the fund for its failure to respond to repeated requests for information.

Lukhaimane said in her determination that the fund’s non-compliance was “intolerable” as it pointed to several contraventions of the Act and also reflected poor conduct of duty.

A complainant, who had been employed by the South African Police Service, was unhappy with the amount received as his withdrawal benefit. He requested the OPFA to investigate whether or not the employer had failed to remit all contributions on his behalf to the fund as this would have affected the quantum of his withdrawal benefit.

When asked by the OPFA to respond to the complaint, the fund failed to file a response addressing this issue.

The fund’s unreasonable delay in responding to the complaint could not be entertained as it prejudiced the complainant. The lack of response from the fund forced the adjudicator to proceed with determining the matter, the OPFA said.

In her determination, she 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.

The employer was ordered to pay the fund any arrear amounts. The fund was ordered to pay the complainant any outstanding fund credit which consists of the arrear contributions.

The OPFA dealt with high volumes of complaints which needed to be disposed of expeditiously in order to properly fulfil its mandate, Lukhaimane noted.

“It is, therefore, incumbent upon pension funds and administrators to ensure 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 respond to complaints by such persons was a failure to uphold their fiduciary responsibilities. It impeded the adjudicator’s ability to deliver on its mandate and, if allowed to continue, would render the adjudicator ineffective.

It also constituted a barrier to the complainant being able to have their complaint properly resolved, she said.

“When the administrative wheels of a fund come off, it starts off with the fund’s failure to respond to complaints that require data from its administration system relating to payment of contributions,” Lukhaimane said.