The courage of his convictions

Karin MacKenzie, the senior assistant adjudicator in the office of the Pension Funds Adjudicator (PFA) provides some insights into the latest ruling to come out of the PFAs office.

In essence the ruling focuses on members transferring between retirement annuity funds.  A copy of months ago the pfa did rule provisionally, but also asked the Competition Commission and SARS to look into the matter.

On Friday he told the trustees of this particular retirement fund that had to submit a rule amendment to the registrar of Pension Funds which allows members to transfer to any other approved retirement annuity fund.

The trustees have six weeks in which to submit the rule amendment. According to Mackenzie trustees has a fiduciary duty to members of the funds to look after their interests, and these interests supercede those of the underwriting sponsor.

How long the Registrar of Pension Funds takes to approve the rule amendment is entirely up to him and would probably depend on his workload. On the other hand he may well consider this to be an important enough amendment to address it as soon as it's received. He could fast-track the rule amendment.

It is believed that the Registrar would probably approve the rule amendment as the legislation, in terms of one of the provisions in the new draft Pension Funds Act, urgently awaiting approval in Parliament, deals with the issue of members and entrenching their right to move to another approved annuity funds.

Editor's thoughts:
* The principle that trustees have a fiduciary duty to protect the interests of the funds members, above those of the underwriting insurer, is now firmly entrenched.
* One wonders when that trustees fiduciary duty stops, in terms of protecting the members interests, once they have announced their intention to move to another fund?

To read the summary ruling click here