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Cape Town - Certain major companies with pension fund surpluses are using political connections to circumvent fund regulations, says Financial Services Board (FSB) chief Dube Tshidi.
He said more than R60bn of the pension fund surpluses – which in terms of legislation must be paid out to fund members – are still in companies' hands.
In parliament on Wednesday, Tshidi sketched a dire picture to the standing committee on finance regarding the distribution of the surpluses.
Tshidi said that on Monday he had had discussions with two Cape institutions that he reckoned jointly held about R500m in surpluses in their pension funds.
In 2001, legislation was enacted compelling companies to pay out these surpluses to pension fund members.
Tshidi declined to name the institutions involved
The issue of distributing surplus pension funds to members started back in the 1980s – when there was about R80bn in surplus funds – but there has been little progress to date.
The issue was not a simple one, said Tshidi, because some institutions have political friends. Hei said the distribution of employers' surpluses to pension fund members to date had amounted to only R18.9bn.
This meant that about R60bn still needed to be distributed.
The surpluses lie in the erstwhile fixed benefit funds, which have at their disposal more assets than required in terms of the funds’ rules.
Tshidi said that the FSB was having sleepless nights about this and the public was being misled by certain institutions which accused the FSB of being bribed to pursue the surpluses.
He had no reason to mislead anyone, he said.
Shareholders of the institutions concerned were protecting their own interests, he said, but that money belonged to the pension fund members.
He asked the committee to use its powers to summon any institution to appear before it.
Committee chairperson Thaba Mufamadi undertook to launch an investigation into the surplus issue. He said that the FSB should begin to report instances of political interference to the National Treasury.
Olano Makhubela, head of financial investments and savings at National Treasury, said the six task teams investigating the restructuring of pension funds would meet with various directors general on Thursday to find out why the process was being delayed.
- Sake24.com
For business news in Afrikaans, go to www.sake24.com.