WHILE the number of complaints received by the Office of the Pension Funds Adjudicator (OPFA) in the last financial year declined, withdrawal benefits complaints registered the highest number of complaints at close to 53 percent of the 7 014 complaints received, according to the Office’s 2020/2021 annual report.
Complaints relating to the non-payment of retirement fund contributions came in second at close to 24 percent.
Both the withdrawal benefit complaints involved complainants experiencing delays in payment of withdrawal benefits either because proper documents were not submitted to the fund or, more commonly, a partial payment had been made or no payment had been made at all owing to non-payment of contributions by the employer or the failure to register the complainant as a member of the fund in the first place while deducting the requisite contributions from their monthly salary.
The report also showed that the number of complaints lodged by funds against employers for non-payment of contributions had also increased.
Close to 7 percent of complaints finalised related to the payment of death benefits.
Pension Funds Adjudicator Muvhango Lukhaimane said that the OPFA, the Financial Services Tribunal, the various High Courts and the Supreme Court of Appeal continued to provide clarity to funds on the interpretation of section 37C.
“It is most prudent that funds/administrators invest in training initiatives within their boards of management or organisations to ensure that technical expertise or knowledge on how to deal with death benefit payments is shared and maintained. The lack thereof is apparently clear from the issues that get misinterpreted as these are often not complex at all nor do they raise novel issues,” Lukhaimane said.
The Private Security Sector Provident Fund (PSSPF) remained the biggest contributor to new complaints. However, in the reporting period, under statutory management and having increased its complaints management capacity (both in terms of systems and case administrators), the PSSPF’s turnaround times were said to have improved.
The only outstanding concern remained the quality of responses that notably required follow-ups and the fact that the fund had failed to take advantage of the revised complaints’ management process as there was no attempt at all on its part to resolve complaints directly with members.
The quality of some of the responses required that the OPFA raises the appearance of systemic problems with fund governance and administration with the Financial Sector Conduct Authority (FSCA), as the regulator.
The OPFA said the number of complaints received in relation to non-payment/late payment/partial payment of claims remained of concern as these represented over 74 percent of complaints.
The next highest outcomes that were complained of related to information provided and performance of products.
“Again, these were outcomes that were within the parties’ competence to improve on. All in all, the top four outcomes represent 97.32 percent of all complaints. It can, therefore, be safely concluded that funds/administrators/employers need to put measures in place to improve on TCF (Treating Customers Fairly) outcomes and they must be held accountable for this in order to improve the member experience,” Lukhaimane said.
She said there had been a marked reduction in the number of new complaints in the year under review to 7 014, representing an over 37 percent decrease from the previous year.
Lukhaimane said the reconsideration process at the Financial Services Tribunal (FST) was also bearing fruit. Some of the matters referred for reconsideration had resulted in the OPFA adjusting its processes and procedures to ensure that parties were not unduly prejudiced.
The OPFA received 7 014 new complaints during the financial year and carried over a significant number of complaints from the 2019/20 financial year - 5 946, with 1 602 of those already over the six-month mark. This was partly due to some funds with a high volume of complaints not submitting responses timeously and also due to a less-than-successful change management process in the last quarter of 2019/20, resulting in a slowdown in the finalisation of matters.
Some 10 940 complaints were closed in the reporting period. Determinations increased by over 5 percent year-on-year, while settlements increased by over 29 percent.
Finance Minister Enoch Godongwana, commenting in the report, said the impact of the Covid-19 pandemic on the economy meant dealing with the reality of job losses and many members of retirement funds resorting to withdrawals to assist with financial relief in trying times.
“Under these challenges, the OPFA adapted its processes to effectively continue delivering on its mandate of disposing of complaints in a procedurally fair, economical and expeditious manner,” Godongwana said.
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