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Gigaba warns retirement funds to obey regulator's rules

Oct 17 2017 20:48

Cape Town - Finance Minister Malusi Gigaba has called on retirement funds to obey the strict rules laid down by the pension funds regulator.

In a message in the 2016/17 annual report of the office of the pension funds adjudicator, Gigaba said he was concerned that there were too many cases of funds being badly run or mismanaged.

The pension funds adjudicator investigates and determines complaints of abuse of power, maladministration, disputes of fact or law and employer dereliction of duty in respect of pension funds. 

"There was cause for concern that of the many complaints relating to withdrawal benefits, the non-payment of contributions by employers was a trend that continued unabated and flew in the face of regulations."

Gigaba praised the adjudicator Muvhango Lukhaimane for the decision to levy monetary penalties against retirement funds that failed to conduct proper investigations into the dependants of a deceased member, in order to effect an equitable distribution of a death benefit.

READ: Pension funds watchdog slams mine fund for death benefit delay 

“Such dereliction of duty can be a life or death matter for beneficiaries that suddenly find themselves without financial support and are condemned to live a destitute life while their breadwinner’s funds lie idle in a retirement fund account, a fact attested to by the billions that remain unclaimed in retirement funds,” the minister said.

Gigaba said the political transition from Apartheid to an era underpinned by the ideology of equal rights was not mirrored in the economic well-being of the citizens of South Africa, and gross inequality in poverty levels still persist. 

"It thus becomes obligatory on the part of retirement funds to invest wisely to ensure that those who have spent most of their lifetime working do not suffer the burden of poverty when they go on retirement."

The office of the pension funds adjudicator, Gigaba said, must therefore be lauded for its efforts to protect the public.

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