If you suspect that you have not received what you should have from your retirement fund or former fund's surplus apportionment scheme, you will have to provide evidence before you can challenge the payment made to you and you should approach your fund or administrator.
At a presentation to the Pension Lawyers Association conference this week, Jurgen Boyd, the deputy registrar of pension funds at the Financial Services Board (FSB), said the FSB is receiving complaints daily from retirement fund members about potential incorrect payments.
However, he says, the FSB is responsible only for checking the surplus apportionment schemes on a high level and does not check each and every individual calculation for correctness since the information relating to individual stakeholders is something that the FSB cannot verify. The FSB refers such complaints to the funds concerned or their administrators, who are responsible for implementing approved surplus schemes.
Boyd says the FSB will check that the law has been followed in determining the total surplus amount to be distributed and that the relevant stakeholders have been included in decisions on how to distribute it. The distribution must have been reasonable and equitable given the financial history of the fund.
The FSB has so far approved 1 330 surplus apportionment schemes involving R19 billion of surplus. Thousands of funds have reported no surpluses to distribute.
If you don't agree with the FSB's approval of a surplus apportionment scheme for the fund you have a stake in, you can appeal to the FSB's Appeal Board, Boyd says.
But if you have been paid an incorrect amount because an error was made in calculating your benefits, you will not legally be regarded as someone able to appeal the FSB's decision, he says.
"To hold that individual stakeholders are aggrieved at the registrar's approval of a fund's surplus scheme will open the floodgates and literally incapacitate the Appeal Board of the FSB," he says.
Boyd says a retirement fund administrator had recently made a mistake when paying amounts to individual stakeholders in a surplus apportionment scheme. Some people were paid too much and others too little, and some, who were not entitled to a minimum top-up, were paid a benefit enhancement.
The deputy registrar says the fund concerned approached the FSB, but the FSB was unable to assist, because there was no problem with the surplus apportionment scheme it had approved. The FSB insisted that the approved scheme be implemented, Boyd said.
The problem was that the administrator had made an error and needed to be held responsible for that error and the shortfall it caused in the fund, he says.
Boyd told the conference that a number of funds and their service providers had come across errors in their calculations of surpluses after their schemes had been approved. In some cases, for example, assets had been wrongly valued.
As the funds were the ones who supplied the incorrect information they cannot legally be regarded as persons aggrieved by the FSB's decision to approve the surplus apportionment scheme, and hence they were not capable of bringing an appeal to the FSB's Appeal Board.
These funds have had to approach a court to set aside their surplus apportionment schemes and, in these cases, the FSB had not opposed these applications, Boyd says.
He says it is important that funds do not implement incorrect surplus apportionment schemes, and they should act as quickly and cost-effectively as possible to rectify any errors that are uncovered in the interests of those stakeholders who are entitled to enhancements from the distributable surplus.
In addition, he says, those responsible for the errors should be held responsible for the costs of rectifying the errors.
The manner in which it is established whether a fund has a surplus and the manner in which it must be apportioned are governed by the Pension Funds Act. However, complaints about surplus apportionments cannot be taken to the Pension Funds Adjudicator, because that office is precluded by law from dealing with such complaints.