There is a risk that the cheap, accessible complaints procedures available
to you through the Pension Funds Adjudicator could be hijacked by companies
and pension funds who are taking their cases to the courts.
Complaints to the Pension Funds Adjudicator, John Murphy, are free and the
purpose of establishing such a complaints mechanism is to provide you with
a cheap, quick alternative to the court process to deal with problems with
your retirement fund.
You do not need to appoint attorneys to handle a complaint before the
Adjudicator, but the pension funds or the employers often make use of legal
experts.
So the danger is that if you lose a case before Murphy, you may be ordered
to pay the expensive legal costs incurred by your fund or employer.
In the three years since his office was created, Murphy has ruled on about
1 800 cases. In only one case has Murphy awarded costs.
However, he is under increasing pressure from employers and retirement
funds to make a ruling on costs when the complainant loses a case.
He says most pension funds do not ask for costs to be awarded, but in big
cases involving huge sums of money, this can happen. For instance, the
Dunlop case submitted to him involved a former senior manager, with the
assistance of legal experts, taking on his pension fund and asking for the
redistribution of about R160 million.
In this case the fund warned that if it won, it would ask Murphy to order
the loser to pay costs which could amount to as much as R70 000. When
informed about the possible cost implications, the complaint withdrew his
case.
Murphy is also under pressure from fund administrators who are reluctant to
use their fund`s money to deal with what may seem like small issues from
fund members.
``The principal officers of funds are losing patience with complaints and
are asking for costs to be awarded,`` he says.
And even if Murphy resists the pressure to award costs to victorious
retirement funds or employers, they can take the issue further.
All parties involved in a Pension Funds Adjudicator ruling have the right
of appeal to the High Court. So even if you, as a fund member, win your
case with Murphy and your fund doesn`t like it, it has the right to take
you to the High Court, which will involve costly litigation for which you
may have to pay.
But retirement fund members should not be discouraged from coming to him
with complaints, Murphy says.
His advice is simply that you should take account of the financial
implications and where possible bring together other members in a similar
situation so that you can share the costs, if any.