Lebogang Mogashoa - Pension Funds Adjudicator.
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Pension funds that ignore member complaints could soon face summons and even criminal consequences, as the Office of the Pension Funds Adjudicator (OPFA) moves to clamp down on non-cooperation.
The shift comes as the Adjudicator looks to enforce its powers more aggressively, warning that delays and failures to respond are undermining its ability to resolve disputes, the OPFA said.
Pension Funds Adjudicator Lebogang Mogashoa said his office is exploring the use of Section 30J of the Pension Funds Act to compel cooperation, including issuing summons and subpoenas against non-compliant funds and administrators.
Section 30J of the Pension Funds Act outlines the procedure for the OPFA to conduct investigations. It empowers the Adjudicator to handle complaints in a flexible, often inquisitorial manner to resolve disputes between members and funds.
Under this section, the adjudicator has the power to adopt “any procedure which he or she may consider appropriate in conducting an investigation, including procedures in an inquisitorial manner”. The provision also states that certain sections of the Commissions Act apply to the adjudicator’s investigations.
The OPFA said senior counsel has advised that these powers can be exercised in terms of the Commissions Act, allowing the adjudicator to direct summons at senior officials, including principal officers and board chairpersons.
Failure to comply with such summons could amount to a criminal offence, with enforcement possible through both the criminal justice system and civil contempt proceedings, said the OPFA.
“Work will begin on ensuring that the office sets up the infrastructure required for these processes as advised by senior counsel,” it said in a statement.
The move follows ongoing concerns about funds that fail to respond to complaints, request repeated extensions, or submit incomplete responses that do not address the substance of member grievances.
Recent determinations highlight the real-world impact of these failures.
One instance that has involved escalation to the Financial Sector Conduct Authority (FSCA), was against the South African Local Authorities Pension Fund for failing to provide the required information on members’ contributions.
Based on recent cases regarding a determination made by the Adjudicator, courts can authorise writs of attachment, leading to funds being seized.
The FSCA can vary, suspend or revoke the licences of retirement funds, fine or refer a matter to the South African Police Service for potential criminal prosecution, as well as remove board members if they have been involved in a crime, for example.
In addition, the FSCA can issue a directive against financial service providers as well as pension funds, among other entities.
Should a directive be ignored, the Authority has the power to impose a fine of as much as R15 million or imprisonment not exceeding 10 years, or both.
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