A pension fund trustee has the right to know what pensionable salary each fund member earns, as well as what pension each of the fund's pensioners is paid.
This is in terms of a recent ruling by John Murphy, the Pension Funds Adjudicator. Your pensionable salary is the basic wage or salary you earn and it is deemed to be pensionable for the purposes of the pension fund.
On being elected as trustee of the Mitchell Cotts Pension Fund, John Knight, asked the fund's principal officer for this information, but the principal officer refused to supply it and referred the matter to the board of trustees. The board, in turn, voted against divulging the information, saying it could only give out consolidated information as contained in the actuarial reports, and not individual's details, unless the trustees needed an individual's details to make a decision about a benefit.
Knight then complained to the adjudicator's office, where he was asked to explain why he wanted the information.
Knight said that without the information he could not satisfy himself that the fund was complying with its rules and all the applicable legislation, and that the trustees were acting in the interests of the pensioners he represented.
He said that as an elected trustee, he regarded his duty to the fund's pensioners as similar to that of an executive director of a company, who has a duty to its shareholders.
"In my experience, a director can never be refused access to all the records of the company on whose board he sits in order to meet his onerous responsibilities. In particular, he must be able to approve the annual financial statements with a clear conscience that the results reflected there represent the best efforts of the company."
Knight said specifically he wanted to know what pensioners were earning because he suspected that many of them were in "straitened circumstances" and the fund may be able to assist them. He said he believed this because the fund had received a windfall of 607 900 Old Mutual shares worth R11.5 million. These were generating an income of R231 000 a year.
As for information about the active members, Knight said he needed this because he wanted to know how those active members who were appointed as non-contributing executives and in respect of whom the employer had declared a contribution holiday, were affecting the fund's surplus.
The fund via its attorneys presented various arguments why Knight should not be given the information including that Knight, as a trustee, had not proven a need for the information, that even if there was such a need, the individuals' rights to privacy outweighed the trustees' need, and that individuals' rights to privacy were protected by the Constitution.
Murphy said that in terms of the Pension Funds Act, trustees have a duty to take all reasonable steps to ensure the interests of members of the fund are protected at all times, to act with due care, diligence, good faith and impartiality in respect of all members and beneficiaries.
Murphy also said trustees have a duty to ensure that contributions are adequately and correctly made to the fund, and since the calculation of contributions are based on pensionable salary, trustees would need to know what each member was earning.
And, for the same reasons the trustees needed to know what pensioners were earning in order to ensure their pensions had been calculated correctly.
Murphy said he could not agree with the fund that Knight did not have a right to information he had requested. However, he added, should Knight use the information for "an unauthorised purpose", he would be in breach of his fiduciary duty and the members or pensioners whose details had been disclosed would be able to pursue a civil claim against him for breach of his duty of confidentiality.
Naleen Jeram, the assistant adjudicator, says in terms of the Financial Institutions Act, trustees of pension funds could be held personally liable for losses suffered by the fund or its members, and may also be liable for a criminal offence if they breach their duties of due care, diligence and good faith.
See also: