FANews
FANews
RELATED CATEGORIES

Keep up to date with the Office of the Pensions Funds Adjudicator

02 September 2022 Shirdhi Baijnath, Senior Adjudicator at The Office of the Pension Funds Adjudicator (OPFA)
Shirdhi Baijnath, Senior Adjudicator of OPFA

Shirdhi Baijnath, Senior Adjudicator of OPFA

The Office of the Pension Funds Adjudicator (“OPFA”) was established with a mandate to ensure a procedurally fair, economical and expeditious resolution of complaints.

The OPFA is charged with ensuring that pension funds’ members and other complainants are able to access an effective, independent, fair, economic and timely dispute resolution mechanism, thus assisting in creating a general confidence in retirement fund participants that retirement funds will perform their duties in terms of the relevant financial sector laws or be held accountable.

RTF Process. What is it and how to utilise it effectively?

Section 30A of the Pension Funds Act, 1956 requires aggrieved members of pension funds to approach the fund directly to resolve the complaint before approaching the OPFA. Funds are required to properly consider the complaint and respond to the member in writing within 30 days. If a member remains dissatisfied, he or she may then approach the OPFA for resolution of the dispute. To give effect to this legislative requirement, the OPFA created an internal unit referred to as the Referred to Fund (“RTF”) unit whereby pension funds are first given an opportunity to resolve the complaint by using their internal dispute resolution mechanisms before the intervention of the Adjudicator.

The process was implemented to assist complainants who may not be aware of the legislative requirement and to not simply turn them away for want of compliance with section 30A(1). It provides funds with an opportunity to engage directly with their members without the intervention of the Adjudicator.

Following the referral, funds are requested to provide the OPFA with a response to the complaint indicating whether the matter was amicably resolved between the parties to the satisfaction of the complainant and the steps that were taken to resolve the complaint. In turn, the OPFA formulates a resolution letter indicating to all the relevant parties that the matter is deemed to have been resolved. In cases where the matter cannot be resolved, a formal investigation by the OPFA will ensue.
A year into the RTF process and it is noted that funds do not utilise the 30-day period, from receipt of the complaint, to resolve the complaint directly with the complainant. Most complaints received by the OPFA relates to non-payment of withdrawal benefits, computations, and the employer’s failure to complete and submit withdrawal claim forms. These are matters that ought reasonably to be resolved fairly quickly at the RTF stage.

Funds that have embraced the RTF process with ease and earnestly utilise the opportunity to resolve complaints directly with the complainants enjoy the fruits of such endeavour and the matter is resolved and closed by the OPFA without a formal investigation. Funds should take advantage of the RTF process to enable them to better treat their members fairly.

Orders sounding in money

A determination issue by the Adjudicator is deemed to be a civil judgment of any court of law and may be enforced in the same manner. However, such orders are sometimes not executed thereby depriving complainants of the intended relief unless they approach the courts for enforcement of the Adjudicator’s order. This places complainants in an undesirable position where they are required to expend further time and legal costs in obtaining relief.

To prevent further prejudice to complainants, the OPFA introduced “orders sounding money” with effect from 1 December 2021. This means the Adjudicator will issue a determination where a specific amount of money is ordered to be paid. This is intended to enable the complainant to obtain a writ of execution from the relevant court in the event that the fund or the employer fails to comply with the Adjudicator’s order. A writ of execution must be in respect of a specific and predetermined amount of money.

Funds responding to complaints pertaining to arrear contributions are therefore required to provide the OPFA with the periods for which the employer is in arrears and a computation of the arrear contributions, plus late payment interest calculated in terms of the Pension Funds Act.

It is not always possible to issue an order sounding in money. In such instances, the Adjudicator will issue an order requiring an exchange of information between the fund and the employer, following the computation of arrear contributions and the subsequent payment of the arrear contributions and late payment interest by the employer.

Quick Polls

QUESTION

How confident are you that insurers treat policyholders fairly, according to the Treating Customers Fairly (TCF) principles?

ANSWER

Very confident, insurers prioritise fair treatment
Somewhat confident, but improvements are needed
Not confident, there are significant issues with fair treatment
fanews magazine
FAnews June 2024 Get the latest issue of FAnews

This month's headlines

Understanding prescription in claims for professional negligence
Climate change… the single biggest risk facing insurers
Insuring the unpredictable: 2024 global election risks
Financial advice crucial as clients’ Life policy premiums rise sharply
Guiding clients through the Two-Pot Retirement System
There is diversification, and true diversification – choose wisely
Decoding the shift in investment patterns
Subscribe now