Don’t wait too long to complain to adjudicator

Many retirement fund members and beneficiaries forfeit the possibility that the Pension Funds Adjudicator will finalise a case in their favour, because they do not submit their complaint before it prescribes.

A complaint must be lodged with the adjudicator within three years of the “cause of action” that gives rise to the complaint – for example, the date on which your employment was terminated or the date on which you become aware that your fund owes you money.

In her report for the year to March 31, 2015, the adjudicator, Muvhango Lukhaimane, says her office rejected 1 947 complaints in 2014/15 because they did not fall within its jurisdiction. Of these, 625 would have been dealt with if they had been submitted within the prescribed time limit.

“It is often the case that members spend a lot of time trying to resolve a matter with the fund or the employer, and, by the time the member lodges the complaint with [my office], the matter has prescribed,” Lukhaimane says.

The adjudicator’s office referred 932 complaints to other tribunals, departments and organisations, mostly to the Financial Services Board, the Government Employees Pension Fund and Transnet, the annual report says.

Red-flagging poor communication as an area of ongoing concern for her office, Lukhaimane says there would be fewer complaints to her office, or complaints would be resolved faster, if employers, retirement funds and fund administrators communicated better with members. She says common lapses involve:

◆ The progress with transferring a member and his or her benefit from one fund to another, including explaining the required procedure and the time-frames involved;

◆ The progress with the liquidation of a fund; and

◆ The provision of annual benefit statements.

There was an increase of 29.7 percent in the number of complaints submitted to the adjudicator’s office in the year to March 31. The office received 7 010 complaints in 2014/15, compared with 5 405 in 2013/14.

The overwhelming majority of complaints concerned withdrawal benefits (68.3 percent) and lump-sum death benefits (10.2 percent).

Lukhaimane says it is a concern that complainants are often made to wait longer than 12 months before their benefits are paid. “These complaints may be negligible compared with the benefits pension funds pay out annually, but they are disconcerting, because the financial distress that might befall complainants while waiting for their benefits may be irreparable.”

Lukhaimane told Personal Finance that the increase in the number of complaints could be attributed to more people becoming aware of her office, while “increased communication” about unclaimed benefits was also a factor.

The office finalised 6 332 complaints in 2014/15, compared with 6 649 in 2013/14. The content of employers’ and administrators’ responses to complaints improved, and more responses were submitted within the required time-frames, the annual report says. The number of determinations fell by 21.1 percent – 2 879 determinations were issued in 2014/15, compared with 3 651 in 2013/14.

Lukhaimane told Personal Finance that the long-term goal of her office was to finalise more cases through settlements than through issuing determinations.

In a settlement, the parties are able to resolve the complaint during the investigation stage – for example, a fund member complains about not being paid a withdrawal benefit, and the fund pays out the benefit after the adjudicator asks it to respond.

The number of complaints finalised through settlements increased from 985 to 1 000, while one complaint was resolved through external conciliation.