Fund reported to FSCA for ignoring PFA's request's for response

A complaint to the Pension Funds Adjudicator about a fund’s delay in payment of a withdrawal benefit received stony silence from the fund despite numerous requests by the Adjudicator for the fund to submit a response.

Unfortunately, while waiting for his complaint to be resolved, the complainant passed away. 

The Adjudicator, Muvhango Lukhaimane, took a dim view of the manner in which Chemical Industries National Provident Fund treated this and many other complaints and the requests for a response. She reported the fund’s chronic impudence to the Financial Sector Conduct Authority (FSCA). 

The complainant was employed by Technipaint Holdings (Pty) Ltd (the employer) from 1 March 2001 until 31 August 2020. The complainant had a fund credit of R306 224.82 as at 29 February 2020. The fund was initially administered by Akani Retirement Fund Administrators (Pty) Ltd (previous administrator) and is currently administered by Momentum Retirement Administrators (Pty) Ltd (current administrator). 

The employer stated in its response that it had submitted the complainant’s withdrawal claim form to the previous administrator on several occasions and it did not receive feedback on why the withdrawal benefit was not processed. 

The complaint was received by the Adjudicator on 19 August 2021. In light of the vast number of complaints received by the Adjudicator against the fund, a formal letter was addressed to the Principal Officer of the fund expressing severe disappointment with the fund’s recalcitrancy. 

The Adjudicator also forwarded a copy of the said letter to FSCA requesting regulatory intervention against the fund (including its board of management) and its administrator. The letter further made reference to several meetings held between the Adjudicator and the fund relating to the latter’s inability to provide adequate responses to complaints as well as the board’s inability to uphold its fiduciary duties. 

The Adjudicator also addressed a letter to the FSCA expressing her concern with the fund and provided a list of complaints that remain unaddressed by the fund despite receiving several requests for same since 5 May 2021. 

The Adjudicator informed the FSCA that to date, the fund continues to raise the issue of data integrity following a change in administrators. which was effective 17 December 2021. The letter indicated that the board’s failure to ensure proper governance of the fund demands regulatory intervention by the FSCA. 

In her determination, Ms Lukhaimane said the fund is responsible for all its records, either from prior previous administrators or the current administrator. The fund is statutorily bound to keep proper books and records of its operations. 

“A vast number of complaints lodged with the Adjudicator remain unaddressed since February 2021 and almost a year after the change in administrator occurred on 17 December 2021. 

“It is clear that the fund has failed to effect an efficient data hand-over process between the previous administrator and the current administrator.

“It is utterly disgraceful that a board of a fund can remain in place without any consequences whilst providing such a dismal service to its members.” 

Ms Lukhaimane also said the Office of the Pension Funds Adjudicator deals with high volumes of complaints which need to be disposed of expeditiously in order to properly fulfil its mandate. 

“It is, therefore, incumbent upon registered and licensed entities such as pension funds and administrators to ensure that enquiries from the Adjudicator are properly and adequately responded to. 

“This is especially so since boards of funds and Principal Officers are required to be fit and proper. Administrators must be approved by the FSCA before being granted a licence to operate. 

“The failure to respond to enquiries and the failure to timeously respond in respect of complaints by such persons is a failure to uphold their fiduciary responsibilities. It impedes on the Adjudicator’s ability to deliver on its mandate and if allowed to continue will render the tribunal ineffective,” she said. 

The fund was ordered to finalise the transfer of data from the previous administrator to the current administrator and to pay the complainant’s withdrawal benefit, plus interest, into the deceased’s estate.