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2020/2021 Annual Report of the Office of the Pension Funds Adjudicator

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28 September 2021 Office of the Pension Funds Adjudicator (OPFA)

Muvhango Lukhaimane, Pension Funds Adjudicator

New Complaints

Total Complaints by Sector

Total Complaints finalised

Key Figures


Increasingly more effort is being made to resolve disputes with funds, employers and administrators before a complaint is lodged with the Office of the Pension Funds Adjudicator (OPFA).

This is evident from the operational overview by Pension Funds Adjudicator, Muvhango Lukhaimane, in the 2020/2021 Annual Report of the OPFA.

She said there had been a marked reduction in the number of new complaints in the year under review to 7 014, representing a 37.25% decrease from the previous year.

Apart from the effect of COVID-19 lockdowns, this decrease has also been attributed to the introduction by the OPFA of the referred-to-fund process in the second half of the year. All premature complaints (those complaints not referred to fund/employers/administrators) were now referred to the other party to resolve with the complainant before such a complaint was lodged with the OPFA.

This has allowed the OPFA to reduce its lead times as mostly ripe complaints would remain unresolved between the parties and lodged for formal resolution.

Ms Lukhaimane said the reconsideration process at the Financial Services Tribunal (FST) was also bearing fruit. Some of the matters referred for reconsideration have resulted in the OPFA adjusting its processes and procedures to ensure that parties were not unduly prejudiced.

She said this was a welcome development in line with the status of the OPFA that a matter from the FST was referred back to the decision-maker for a fresh look. This was so especially as parties frequently presented new facts to the FST that were not presented before the OPFA.

Most administrators have also built some capacity to deal with administration-related complaints or enquiries, especially in preparation for the implementation of the Treating Customers Fairly (TCF) regime.

“The only reason that these complaints are still being referred to the OPFA in the first instance is because complainants are unaware that they may first seek clarity from the fund but also in instances where they have done so, there is either lack of trust with the employer/fund/administrator or the complainant requires a written response with proof of performance.

“Funds will be requested to remind complainants of their internal complaints management processes on a regular basis,” said Ms Lukhaimane.

The revision of the complaints process will also ensure that those funds accredited by the Financial Sector Conduct Authority (FSCA) in terms of section 30E(1)(b) of the Act to implement internal complaints resolution processes, are given the opportunity to do so. For these funds, it would only be in instances where a dispute remains unresolved after the fund has attempted to deal with same, that the OPFA would get involved.

“The OPFA is set up to resolve genuine complaints where an impasse has been reached and not to interfere with regulatory processes where alternative measures have been provided for the enforcement of such measures,” Ms Lukhaimane said.

The OPFA received 7 014 new complaints during the financial year and carried over a significant number of complaints from the 2019/20 financial year – 5 946, with 1 602 of those already over the six-month mark. This was partly due to some funds with a high volume of complaints not submitting responses timeously and also due to a less-than-successful change management process in the last quarter of 2019/20, resulting in a slowdown in finalisation of matters.

10 940 complaints were closed in the reporting period. The increase is due to the complaints carried over from the previous reporting period. This closure rate represented an increase of 13.93% from the previous period. 5 245 complaints were closed by way of formal determinations, 2 807 matters were settled, whilst 615 were closed for other reasons. 2 273 complaints were deemed as out of jurisdiction and, therefore, could not be investigated further by the OPFA.

Determinations increased by 5.09% year-on-year whilst settlements increased by 29,35%. The increase in settlements was a welcome trend whilst the increase in the number of matters deemed as out of jurisdiction remained a concern.

“This means that employers/funds/administrators need to improve on communication and educational initiatives to members to ensure that they are aware of where to complain and what issues the OPFA may investigate,” said Ms Lukhaimane.

As at 31 March 2021, the OPFA had 2 109 active complaints remaining unresolved. Of those, only 16 were older than six months. This state of affairs has been credited to the revised complaints’ management process and the improvement in the quality of responses received.

In a message for the annual report, Finance Minister Enoch Godongwana said the impact of the COVID-19 pandemic on the economy meant dealing with the reality of job losses and many members of retirement funds resorting to withdrawals to assist with financial relief in trying times.

“Under these challenges, the OPFA adapted its processes to effectively continue delivering on its mandate of disposing of complaints in a procedurally fair, economical, and expeditious manner.

“I would like to acknowledge the exemplary leadership displayed by the Pension Funds Adjudicator and Deputy Pension Funds Adjudicator in leading the organisation during the new normal.

“The continued success of this Tribunal serves as a beacon of hope for aggrieved members of retirement funds and sets an excellent example for others to follow,” he said.



Withdrawal benefits remained the highest category of complaints at 52,93% of the 7014 complaints received by the Office of the Pension Funds Adjudicator (OPFA) in the last financial year.

Complaints relating to the non-payment of retirement fund contributions (section 13A compliance) came in second at 23,87%, according to the 2020/2021 annual report of the OPFA.

Both withdrawal benefit and section 13A complaints involve complainants experiencing delays in payment of withdrawal benefits either because proper documents have not been submitted to the fund or more commonly, a partial payment has been made/no payment has been made at all owing to non-payment of contributions by the employer or the failure to register the complainant as a member of the fund in the first place whilst deducting the requisite contributions from their monthly salary.

The number of complaints lodged by funds against employers for non-payment of contributions in terms of section 13A had also increased.

Pension Funds Adjudicator Muvhango Lukhaimane reported that 6.91% of complaints finalised related to the payment of death benefits in terms of section 37C of the Act.

She said clarity continues to be provided to funds by the OPFA, the Financial Services Tribunal, the various High Courts and the Supreme Court of Appeal on the interpretation of section 37C.

“It is most prudent that funds/administrators invest in training initiatives within their boards of management or organisations to ensure that technical expertise or knowledge on how to deal with death benefit payments is shared and maintained.

“The lack thereof is apparently clear from the issues that get misinterpreted as these are often not complex at all nor do they raise novel issues,” said Ms Lukhaimane.

The Private Security Sector Provident Fund (PSSPF) remained the biggest contributor to new complaints. However, in the reporting period, under statutory management and having increased its complaints management capacity (both in terms of systems and case administrators), the PSSPF’s turnaround times had somewhat improved.

The only outstanding concern remained the quality of responses that notably required follow-ups and the fact that the fund had failed to take advantage of the revised complaints’ management process as there was no attempt at all on its part to resolve complaints directly with members. The quality of some of the responses required that the OPFA raises the appearance of systemic problems with fund governance and administration with the Financial Sector Conduct Authority (FSCA), as the regulator.

The number of complaints received in relation to non-payment/late payment/partial payment of claims remained of concern. These represented 74,22% of complaints. Hence, the revised complaints management process should be able to assist further by ensuring that the fund/administrator is prompted to resolve the complaint directly with the complainant before referring it to the OPFA. As the process becomes embedded and the data statistically significant, referrals would be made to the FSCA to deal with those regulated entities that were failing to abide by the Treating Customers Fairly (TCF) outcomes.

Regulated entities are expected to demonstrate that they deliver the following six TCF Outcomes to their customers throughout the product life cycle, from product design and promotion, through advice and servicing, to complaints and claims handling:

• Customers can be confident they are dealing with firms where TCF is central to the corporate culture
• Products & services marketed and sold in the retail market are designed to meet the needs of identified customer groups and are targeted accordingly
• Customers are provided with clear information and kept appropriately informed before, during and after point of sale
• Where advice is given, it is suitable and takes account of customer circumstance
• Products perform as firms have led customers to expect, and service is of an acceptable standard and as they have been led to expect
• Customers do not face unreasonable post-sale barriers imposed by firms to change product, switch providers, submit a claim or make a complaint.

The next highest outcomes that were complained of related to information provided and performance of products.

“Again, these were outcomes that were within the parties’ competence to improve on. All in all, the top four outcomes represent 97,32% of all complaints. It can, therefore, be safely concluded that funds/administrators/employers need to put measures in place to improve on TCF outcomes and they must be held accountable for this in order to improve the member experience,” Ms Lukhaimane said.

The year in review also saw the position of Senior Legal Advisor at the OPFA being created and Naheem Essop being appointed into the role dedicated to legal research, advice and training.

Through this appointment, the OPFA will be heard on proposed legislation as it is best placed to comment on how retirement funds and administrators should implement envisaged outcomes and share the OPFA’s experience proactively.