Pension fund issues? When to complain, and how

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JIMMY MOYAHA: It’s a Wednesday. Why not have it be consumer awareness Wednesday? We’re going to be taking a look at the role of the Office of the Pension Funds Adjudicator [PFA], an important part of South Africa’s pension fund industry aimed at protecting consumers and ensuring that you have the best support that you could potentially want for your pension fund queries.

We’re going to be taking a look at this office, we’re going to be taking a look at the roles and responsibilities of this office with the Pension Funds Adjudicator Lebogang Mogashoa, who joins me on the line to look at his role and the role of his teams.

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Lebogang, lovely to have you on the show. Thanks so much for taking the time. Congratulations are in order. I believe you were appointed to the role towards the tail-end of last year and I’m guessing this might be one of the first conversations you’ve had with the media since that appointment. So congratulations from us and from the SAfm team. Fully deserved, without a doubt.

Let’s start the conversation with the role that you step into – and take us through just your responsibilities within the Office of the Pension Funds Adjudicator. Then we’ll get perhaps into the other responsibilities of the office.

LEBOGANG MOGASHOA: Thank you so much for the warm welcome and the kind words. As you said, I joined in December, starting on the 8^th of December and it’s been a really interesting time trying to get up to speed with the responsibilities of the role, with the office.

But as you know, I previously worked for this office, so it’s actually nice to be able to see some of the old faces that were here – but also get reacquainted with the work of the organisation, in that the organisation has evolved quite a lot in the last few years when I wasn’t here.

In terms of the responsibilities, obviously I joined the organisation in order to lead it in discharging its mandate in terms of the law.

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I am responsible for also looking after the governance side of the organisation to ensure that in investigating complaints, as we are mandated to do by legislation, we do so in a way that complies with governance best practice – but also so that the organisation is properly managed and can pursue its strategic objectives and its goals within a well-articulated strategic framework.

So that’s my work as the PFA, and that’s what I’ve been appointed to do, in essence. But I’ll get into the detail of what the mandate of adjudicator is from a legal perspective.

JIMMY MOYAHA: Let’s get into that mandate, Lebogang, because a lot of the consumers aren’t aware, or may not be aware, of the fact that your office even exists – much less that it exists to protect consumers. So tell us in simple terms, what is it that the PFA does?

LEBOGANG MOGASHOA: The PFA is an office that was established in terms of the Pension Funds Act, so it’s a creature of statute.

It was created by law to investigate complaints. So there’s a specific mandate that’s stipulated in legislation that relates to the mandate of the PFA, which is …

To investigate complaints that have been lodged against, for example, retirement funds and employers who participate in retirement funds.

And we do that in an economical, expeditious and procedurally fair manner.

In other words you can look at us as kind of an institution that has been established to investigate matters that have been launched against retirement funds, typically by members of retirement funds. And we follow a due process in terms of investigating those complaints.

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And then ultimately we end at a point where we issue, call it a statement of determination, that is really a ruling on a complaint that has been lodged by a complainant communicating the outcome of the complaint’s investigation process and the reasons for that outcome.

And that statement of determination has the same weight as a judgment of a court of law, which can then be enforced in the same way that you would typically enforce a judgment of a court of law.

So that’s the mandate of the adjudicator. We investigate complaints that relate to maladministration of retirement funds and other allegations of illegal conduct by retirement funds or unlawful conduct. And then we resolve that through a determination, deciding what the outcome of that complaint should be and what the legal reasons for that are.

JIMMY MOYAHA: Lebogang, when you say complaints, what do we mean by that? How do I know, as a consumer, as a member of a pension fund, if I’ve even got a valid reason to come to you?

LEBOGANG MOGASHOA: Obviously I don’t want to get into the technical definition, because there’s a technical definition in the Pension Funds Act, but I just want to explain it in relatable terms.

A complaint is essentially when you are dissatisfied with something that has been done by your retirement fund, and you believe that what was done by your fund relates to the administration of the fund.

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So you could be dissatisfied with something that relates to the administration of the fund, whether it relates to the interpretation and application of its own rules or how they have applied the rules of the fund to you – or in relation to your benefits.

Or how they have invested your retirement savings; if you believe that inappropriate decisions were made in relation to how your retirement savings were invested.

But importantly, we have to, from your complaint, we have to be able to see that you are alleging that – as a result of any conduct by the fund – you believe that you’ve suffered some kind of prejudice or harm. And then we can look into that.

There are various types of complaints, obviously – a long list of the kind of matters that we investigate.

But some of the typical complaints that would come to the adjudicator include complaints about the pension benefit not being paid.

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Maybe you retired from service and submitted your claim for a pension benefit, and it was not paid – without any valid reason. Obviously you can come to us and say: ‘My benefit was not paid for no valid reason.’

But also if there have been delays in paying your benefits.

For example, you believe that there was a delay in paying a benefit that caused you harm and you want to take action in relation to that.

There could also be a complaint because you believe that your retirement benefit that becomes payable when you leave your pension fund has been calculated incorrectly.

Another big issue of big types of complaints that we see are what we call ‘area contributions’.

Area contributions are essentially where your employer makes a deduction from your salary under the pretext of it being a contribution to your retirement fund – because obviously, when you’re a member of a retirement fund, on a monthly basis you pay contributions to your fund so that you can have something to live on when you retire.

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But from the complaints that we’re seeing some employers make these deductions but they then don’t pay that money to retirement funds.

So we see a lot of complaints initially where these deductions were made and not paid over to retirement funds.

You can also complain about anything that you believe [has occurred] – trustees for example not managing the fund properly and you believe it shows that the fund is not being managed properly. It is not communicating with you clearly as a member, or you believe that the fund has done something that is outside its powers in terms of the law or in terms of its rules.

So you can complain about all those things, but I do want to stress that we do not accept complaints that relate to funds or pension funds over which we do not have jurisdiction.

By ‘jurisdiction’ I mean the authority to investigate. Those would typically be retirement funds like your GEPF, the Government Employees Pension Fund.

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We do not have jurisdiction over that fund at the moment.

But also you cannot complain about any matters that do not have anything to do with retirement funds.

So you can’t complain, for example, about the medical aid [and] you can’t complain about an employment issue where you may have other disputes with the employer.

If you have a dispute with the employer and you want to lodge a complaint with us, it has to relate to a pension fund.

It has to be something that has to do with the retirement front.

So when you check all of these things and you can answer them in the affirmative, then you have a complaint that you can lodge with us.

JIMMY MOYAHA: Lebogang, if I am afraid to lodge a complaint because it might feel overwhelming and I might not be certain I’ve got the right resources – or even whether I’ve got the money to lodge a complaint – is it expensive to lodge a complaint with the PFA?

LEBOGANG MOGASHOA: No, I did mention when I was discussing the mandate of the adjudicator that part of our mandate is to do our investigations or to conduct our investigations in a procedurally fair manner, but also in an economic manner.

What that means is that we do not charge any fees for any of our services.

So if you lodge a complaint with us, we investigate it free of charge. We do not charge you anything, so there’s no need for potential complainants to be worried about whether they would be able to afford the services of the adjudicator – because we do not charge a fee for that and we can investigate your complaint regardless of whether or not you have money.

JIMMY MOYAHA: There you have it, folks. The Pension Funds Adjudicator’s Office is there to assist you with all of your pension fund-related complaints and concerns.

Please reach out to them if you have any concerns. [Their services] are free of charge and they are able to assist wherever necessary.

I think we’ll leave the conversation on that note. Thanks so much to the Pension Funds Adjudicator at the Pension Funds Adjudications Office, Lebogang Mogashoa, for joining us to take a look at the role of their office and what it is that they do for consumers.

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