FSCA considers action against pension fund

THE Financial Services Conduct Authority (FSCA) is considering “regulatory action” against the South African Local Authorities Pension Fund (SALA) because it isn’t providing the required information on members’ contributions.

- NICOLA MAWSON

That the FSCA is considering regulatory action is the result of yet another referral from the Office of the Pension Funds Adjudicator (OPFA) regarding the pension fund and its failure to address several issues. The FSCA has, Corlia Buitendag, departmental head of retirement fund conduct supervision at the FSCA, previously engaged the Fund to address issues.

Buitendag told Personal Finance that “it is deeply concerning that, despite these interventions, the Fund has shown no meaningful improvement. Regulatory action is being considered.”

The Office of the Pension Funds Adjudicator’s most recent referral of SALA to the FSCA came after the Pension Funds Adjudicator “severely criticised” it for not responding to requests for information. OPFA sought details to decide a matter after being approached by a complainant who had been employed by the South African Police Service (SAPS) and was unhappy with the amount he received as his withdrawal benefit. Pension Funds Adjudicator, Muvhango Lukhaimane, said SALA was not compliant with requests from her office as it didn’t respond to her demand that it provide her Office with information on the matter. She told Personal Finance that “SALA has had many administrative issues over the years - and has not had a history of compliance”.

Lukhaimane added that issues relating to SAPS members have, in some cases, resulted in members even losing out on benefits because of a process breakdown. “At this stage the situation seems quite dire,” she said, which is why she asked the FSCA to investigate. “The fund’s non-compliance is intolerable.”