Poor communication by pension funds appears to be a recurring underlying cause of complaints to the office of the Pension Funds Adjudicator (PFA), according to the PFA's annual report for the year to March, which was tabled in Parliament this week.
Charles Pillai, who took office as PFA in March this year, says it is evident that most complaints stem from poor or no communication by funds to their members. "These relate to complaints around the quantum of withdrawal benefits, transfers, and discrepancies between benefit statements and what is eventually paid out to members," he says.
Fund trustees have a duty to ensure that adequate and appropriate information about the rights, benefits and duties of fund members is communicated to them, Pillai says.
Another problem is the lack of internal complaint-handling mechanisms at funds and fund administrators, which often results in simple queries being referred to the PFA's office, he says.
"The office of the PFA should be seen as the option of last resort. However, our experience has been that members are simply referred to our office when any member complains or directs simple inquiries to their fund," he says.
Pillai says his office has faced several challenges over the past year, including the resignation of his predecessor, Mamodupi Mohlala, the closure of the Cape Town office, the move of the Johannesburg office to new premises and a lawsuit related to the alleged breach of an office lease agreement.
There were 10 resignations and five retrenchments from the PFA office during the past financial year, he says.
Pillai says almost all of the staff who were employed by the PFA from its inception have left. "Thus the institutional knowledge built up from 1998 is no longer here. The need for training and capacity-building is one of urgent priority that will have to be addressed," he says.
By the end of the year to March, the office of the PFA had settled 3 319 complaints, issued 1 555 determinations and dismissed 1 768 complaints, Pillai says.