Nathalie Burrows, Editor at EBnet
If day one of the 2026 IRFA Conference in Cape Town was about understanding the changing world around retirement funds, day two was about what that change means in practice for members.
The conference theme, “A New World – A New Normal”, carried through the day’s conversations from the Regulators on the topics of value for money, unpaid contributions, unclaimed benefits, financial inclusion and future regulation/supervision. The recurring message was clear: retirement funds can’t be measured only by whether they comply with the rules. They need to be judged by whether they deliver fair, understandable and sustainable outcomes for the people whose money they look after.
That may sound obvious, but it represents an important shift. In a defined contribution system, members carry much of the investment, longevity and decision making risk. They need trustees, employers, administrators, advisers and regulators to make sure the system works in their best interests.
Value for money is about outcomes
Zareena Camroodien, the FSCA’s divisional executive for retirement funds supervision, said the regulator is prioritising a value-for-money framework for retirement funds, alongside its focus on unclaimed benefits.
This should not be interpreted as a simple drive to find the lowest cost provider. Fees matter – and they can erode savings materially over time – but value for money is broader than that. A cheap fund is not necessarily a good fund if its investment outcomes are poor, its administration is slow or inaccurate, its communication is confusing or its default arrangements don’t suit members’ needs.
The real question is whether the overall value delivered to members justifies the costs and risks involved. That means looking at investment performance, fees and charges, service quality, governance and the suitability of the fund’s arrangements together as a whole, rather than as isolated parts.
The FSCA is exploring a local framework that takes lessons from the United Kingdom and Australia, while recognising the nature of South Africa’s retirement fund landscape. The intention is to use transparent, outcomes-focused measures built around familiar industry tools such as return on investment and the total expense ratio.
This approach is needed because the market remains fragmented and difficult to compare. Employers often select the fund or provider on behalf of their employees, while members may have little say and limited information. Returns, fees, risk and service are often disclosed separately, making it difficult to establish whether a fund is truly delivering good value.
A meaningful framework could help trustees (and mancos) ask better questions, identify weak outcomes sooner and strengthen competition between providers. But it will need credible data, like-for-like comparisons and clear consequences where funds cannot demonstrate acceptable value.
Unclaimed benefits must find their owners
The FSCA’s second major priority is unclaimed benefits. National Treasury has proposed centralising more than R88 billion in unclaimed financial assets, with retirement funds accounting for roughly 53% of the total.
That is a staggering amount of money, but the human story behind it is more important. These are benefits that may belong to former employees, pensioners, dependants and families – people who may not know that they have money owing to them or may not know where to start looking for it.
The reasons are often historical. Poor records, incomplete personal details, multiple changes in employers and administrators, fragmented tracing processes and the legacy of migrant labour have all made it difficult to reconnect people with their benefits.
The FSCA supports the idea of a uniform national unclaimed-assets framework, with a central administrator responsible for consolidating assets, maintaining records, tracing beneficiaries and processing claims. The retirement fund sector would be the first part of the financial system covered, before the model potentially expands to other categories of unclaimed assets.
To inform its opinion, Zareena shared that the FSCA has asked those funds and administrators holding 86% of unclaimed retirement benefits to provide historical claims data for the 2020 to 2025 period. This will help National Treasury assess the liquidity and operational requirements of a central administrator.
Centralisation will not solve every tracing problem. Better data, proactive tracing and clear communication will still matter. But a single point of contact could make a major difference for people who currently have to navigate a confusing maze of former employers, funds and administrators just to establish whether they are entitled to a benefit.
Unpaid contributions need action
The discussion on unpaid contributions was perhaps the most urgent. The FSCA and PFA have reported that around R8.3 billion in contributions has not been paid over to retirement funds by employers, including roughly R1.7 billion owed by local government.
For members, this is not merely an administrative failure. It can reduce retirement savings, disrupt risk cover and leave families exposed when they need benefits most. A member may only find out that contributions were not paid when they resign, retire, become disabled or die.
Lebogang Mogashoa, the Pension Funds Adjudicator, noted that 51% of complaints submitted to the Office of the Pension Funds Adjudicator in the past financial year related to non-payment of contributions.
Mogashoa said the Adjudicator intends to use its powers more actively. The office can issue orders requiring employers and responsible persons to pay outstanding contributions. These determinations have the force of civil court orders and can be enforced through the court process if employers don’t comply.
That is an important reminder for trustees. Reporting a contribution default to the FSCA is necessary, but it is not the end of the board’s responsibility. Trustees need proper escalation and recovery processes: clear trigger points for engagement, payment arrangements, formal complaints, civil recovery and enforcement.
The section 13A panel discussion which included voices from IRFA, the FSCA and the PFA, made the point forcefully: funds should not merely note arrears reports at meetings. They need to ask what is happening to recover the money, whether the employer is honouring any arrangement and whether action is being taken against the responsible persons where necessary.
The OPFA has recently introduced a dedicated complaint form to help funds lodge cases against non-compliant employers and responsible persons. The form is designed to ensure that the office receives the evidence it needs upfront, including contribution schedules, rule extracts, details of affected members and calculations of arrears and late-payment interest.
Funds also need to act quickly. Waiting too long can create prescription problems and may force the fund into more expensive recovery channels. The OPFA route is available to funds at no cost, and properly prepared complaints can be expedited. But even a favourable determination means little if trustees do not follow through with enforcement.
Members do not experience section 13A compliance reports. They experience whether their contributions are paid and whether their benefits are available when life takes an unexpected turn.
Inclusion needs a new approach
Day 2 also raised the broader issue of financial inclusion. South Africa’s retirement system works mainly through formal employment, but many people have irregular incomes, move between jobs or work outside the conventional payroll environment altogether.
The FSCA is working on auto-enrolment as a significant step in the right direction by making retirement saving the default. People would still be able to opt out, but they don’t need to take the first difficult step of joining and choosing a retirement arrangement.
Zareena reiterated that the design of any auto-enrolment model will be crucial. Contribution rates must be affordable, default options must be appropriate, and members need clear communication. South Africa cannot ignore the financial pressure facing households. But doing nothing leaves too many people without any realistic path to long-term savings.
Rwanda’s Ejo Heza scheme offers a useful example of a more flexible approach. It has sought to include informal and lower income workers through small, flexible contributions, mobile technology and incentives. South Africa cannot simply copy the model, but the principle is relevant: savings systems need to reflect how people actually earn and live.
For many workers, it’s not possible for retirement saving to depend on a predictable monthly salary and a traditional employer. Inclusion means creating accessible, low friction ways to save, preserve and remain connected to savings across different work arrangements.
Supervision is becoming sharper
The overall regulatory environment is moving towards more proactive, outcomes-based supervision.
Prudential Standard 1 of 2026, published by the FSCA in March, introduces a consolidated framework for retirement fund regulatory reporting and annual financial statements. Its effective date is still to be determined, but the goal is to improve reporting consistency, transparency and comparability.
Prudential Standard 2 of 2026, published in July, will strengthen Regulation 28 reporting. It moves beyond relying mainly on reports of past breaches, requiring a fuller picture of funds’ holdings and supporting a more risk based supervisory approach.
The FSCA is also paying closer attention to ESG and stewardship. A recent survey found that most funds include ESG considerations in their investment policy statements, but far fewer have active-ownership or climate-focused policies. The key point is that funds remain the asset owners. They may appoint asset managers, but they cannot outsource responsibility for understanding risks, setting mandates and exercising oversight.
That is the direction of travel: stronger data, better disclosure, more active oversight and greater accountability for member outcomes.
The challenge for trustees is not simply to keep up with new standards. It is to use them as an opportunity to improve how they govern funds, challenge providers and protect members. In this new world, good governance is not a file of policies. It is the ability to see risks early, ask difficult questions and act before members suffer the consequences.
ENDS
