One of the biggest newsmakers in the industry, Vuyani Ngalwana rocked the insurance industry and his rulings have changed the retirement landscape forever.
Vuyani Ngalwana is a name the insurance industry will long remember. As he steps down from his somewhat controversial position as the Pension Funds Adjudicator (PFA), FAnews chatted to Vuyani about the last two years and share with you his parting words.
Media influence
The media coverage raised the public's awareness of the issues at stake, creating a whole
new playing field and exposing the unscrupulous behaviour of some insurers. However, not all the rulings were against insurers and the office of the PFA upheld fairness and impartiality at all times.
Vuyani says that the media coverage played its part in the office's public awareness-cum-education campaign. "However, despite the spotlight the media placed us under, it certainly never influenced me in the decisions I have made, or the manner in which I have made them."
Much more to be done
Despite the many precedents established by his rulings, Vuyani says that he feels he did not achieve everything he wanted to do as the PFA. "Sadly, I have to leave before I have done everything I wanted to accomplish, since the authorities clearly have no idea what it takes to do what we do properly and sustainably."
"I'd have liked to see through the rewriting of the Pension Funds Act. I have many ideas that I am certain would make the process much easier and meaningful for both parties to a complaint, and would give the office the gravitas it deserves."
Success
Despite his disappointment, Vuyani feels that the office of the PFA did achieve success. "This success is based on the fact that ordinary people have finally found in the office a compassionate yet impartial and fair arbiter of their complaints. We have also prevailed on National Treasury to consider reviewing the entire Pension Funds Act a lot sooner than it would otherwise have done.
"This gives right-thinking people the opportunity to influence the redrafting of the Act in ways that put the interests of retirement fund members and their dependants first. It remains to be seen whether some of the amendments already before Parliament will not be lobbied out of the draft. We hope (against hope) not."
Challenges for the industry
Vuyani also foresees some challenges for the industry in the future. "The first challenge is the conflict of interest mess, especially in life company-administered RAs, preservation funds and umbrella funds. The lack of competition for the business of retirement funds by new entrants also poses problems.
"An ongoing concern is the lack of trustee education which renders retirement funds, according to one industry publication, as 'beached whales' from which 'every man and his dog can take a bite'. This is exacerbated by a lack of clear communication by administrators to members, opaque products underlying retirement savings and the arrogance of administrators and other service providers.
"Problems can be expected in a regulatory environment that is not entirely in keeping with developments in the industry, especially regarding surplus apportionment issues. The chronically out-of-date legislative framework from a regulatory perspective, the monitoring of the implementation of the flawed Statement of Intent and the capacity concerns at the FSB, all represent challenges the industry must face and resolve."
Changes
The PFA's office has also implemented changes to overcome some of the challenges they faced. According to a recent PFA announcement, no new facts can be brought to an appeal against the adjudicator, which means that insurers will have to sharpen their pencils in their first reply to a case investigated by the adjudicator.
"This is part of an amendment to section 30P of the Pension Funds Act currently in draft form before Parliament," explains Vuyani. "The idea is that institutions should not be free to argue one case before the adjudicator and, upon losing that case, argue another before the High Court. when neither the complainant nor the adjudicator is there to defend the case. Without this amendment, impecunious complainants have not a jot of a chance to obtain sustainable relief and institutions can have the adjudicator's determinations overturned simply by showing up in court. If this office is to serve any meaningful function, this practice has to stop."
Legacy
Vuyani not only leaves an indelible impression on the industry, but also leaves a legacy at the
office of the PFA. "Hopefully the office will be accorded the respect it so thoroughly deserves because of the hard and smart work that defines it. And, hopefully ordinary South African pension members now have the courage and determination to challenge large financial institutions via the office."
Vuyani believes that, "If you decide to do something, do it properly or don't even bother. I despise nonchalance and artificiality in the performance of a job. That is why I could not continue as adjudicator under the current legislative framework and lack of political support as regards budget to appoint additional staff."
Vuyani will be returning to private practice in law at the Johannesburg Bar in Sandton.
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