Renewed faith in rulings of Pension Funds Adjudicator

The number of applications to the High Court for review of determinations issued by the Office of the Pension Funds Adjudicator (OPFA) has dropped.

This was reflective of renewed faith in the OPFA’s investigation and determination of complaints, says acting Pension Funds Adjudicator Dr Elmarie de la Rey.

Writing in the 2010/11 Annual Report of the OPFA, Dr De La Rey said that when compared to previous years, as well as listening to feedback from stakeholders, she was satisfied the “substantial decline” in rulings being taken to the High Court was due to “renewed respect and confidence in the determinations made by the PFA”.

Overall, at the end of the year under review, 6 220 new complaints had been received by the OPFA, 894 complaints had been settled by conciliation, 1 430 were determined, and 3 799 were resolved without requiring determination.

Dr De la Rey said the OPFA has faced a number of challenges during the reporting year. Apart from dealing with the unexpected death on 6 November 2010 of Charles Pillai, the fourth Pension Funds Adjudicator, the OPFA had to deal with challenges around compliance with the provisions of the Public Finance Management Act 1 of 1999 (PFMA) and Treasury Regulations, the implementation of new policies, and outdated IT and case management systems.

The planned improvement of the case management system, including the development and implementation of customer relationship software, as well as the ongoing skills development of all staff members, would contribute to complaints being resolved more expeditiously.

In terms of challenges around compliance with the provisions of the PFMA and Treasury Regulations, Dr De la Rey said two staff members, the finance manager and the accountant, had left employment at the OPFA at short notice at the beginning of the financial year.

“Fortunately an experienced consultant assisted until a new finance manager was appointed in May and a new accountant with effect from 1 September 2010.

“With only one staff member remaining in Finance, the lack of continuity and the progression towards a more compliant environment presented certain challenges.

“The situation has since improved considerably and it is anticipated that in the next financial year, the OPFA will be fully compliant with the PFMA and treasury regulations.”

In terms of challenges posed by the implementation of new policies, she said a substantial number of formal policies were drafted and approved by the Financial Services Board in order to comply with the PFMA.

The bulk of the policies were approved on 30 September 2010 and had to be implemented immediately.

The implementation of various policies, which included the anticipation of the annual

increase date from 1 April 2011 to 1 January 2011, performance-based increases and incentive bonuses, led to some dissatisfaction amongst staff members. These concerns had all been addressed.

One of the operational improvements implemented from April 2010 to reduce turnaround times in dealing with complaints and the backlog of complaints has been the formation of a dedicated team in the Adjudication Unit to deal with complaints lodged before 1 April 2008.

This had successfully reduced the number of unresolved old complaints. It is anticipated that all complaints lodged prior to 1 January 2009 will be resolved before 30 November 2011.

In a message in the OPFA Annual Report, Finance Minister Pravin Gordhan said National Treasury’s pursuit of the “twin peaks” model of financial supervision followed international best practice and sought to reduce regulatory risk.

This was done by dividing the burden and authority in financial oversight between two institutions; one responsible for supervising consumer protection and market conduct, and the other responsible for prudential regulation.

He said the OPFA had “a very important role to play in this new regulatory framework and in protecting members of retirement funds”.

“The proper management of retirement savings is crucial to the welfare and wellbeing of South Africans, and also to the economy since they are a source of long term savings.

“The OPFA has, since its establishment in 1998, done very well in affording members of pension funds an opportunity to have their complaints investigated and resolved in a procedurally fair, economical and expeditious manner, without the need to resort to the courts.

“To further enhance accessibility to members of the public, the OPFA has since April 2011 been participating in the centralised complaints helpline for all financial Ombud schemes, where members of the public can phone a toll-free number for more information about the different financial Ombud schemes.

“This bears proof of the greater measure accorded to representing and protecting member rights and interests,” Gordhan said.

He added that the operations of the OPFA were forging ahead with the assistance of the reappointed Acting Adjudicator, Dr Elmarie de la Rey.

“I am optimistic that Dr De la Rey and her team will continue to steer the ship and provide retirement fund members with a convenient and accessible recourse system and wish them well in this important role,” said Gordhan.