Lize de la Harpe, Senior Legal Advisor: Sanlam Life & Savings: Regulatory Unit

Background

The office of the Pension Funds Adjudicator (“the Adjudicator”) is a statutory ombud scheme established under section 30B of the Pension Funds Act.

The main object of the Adjudicator is to dispose of complaints lodged in terms of the Pension Funds Act in a procedurally fair, economical and expeditious manner. The Adjudicator is a creature of statute, meaning it has no inherent jurisdiction – its jurisdiction is limited to “complaints” in relation to a “pension fund organization” registered in terms of the Pension Funds Act.

A “complaint” is defined in section 1 as relating to the administration of a fund, the investment of its funds and the interpretation of its rules alleging that –

1. a decision of the fund or any person taken in terms of the fund rules was ultra vires (in excess of the powers the fund or person had) or an improper exercise of its powers
2. the complainant has or may sustain prejudice in consequence of the maladministration of the fund, whether by act or omission
3. a dispute of fact or law has arisen in relation to a fund between the fund or any person and the complainant, or
4. that an employer who participates in the fund has not fulfilled its duties in terms of the rules of the fund,

but shall not include a complaint which does not relate to a specific “complainant”.

A “complainant”, in turn, is defined as meaning –

1. a member or former member of a fund
2. a beneficiary or former beneficiary of a fund
3. an employer who participates in a fund
4. a spouse or former spouse of a member or former member
5. the Board of trustees, or any member of the Board, or
6. any person who has an interest in a complaint.

Draft Rules

In terms of section 201 of the Financial Sector Regulation Act, 2017 (FSR Act) the Ombud Council is empowered to make rules for ombud schemes to support its statutory objective and fair dispute resolution mechanisms for financial customers. In terms of section 30AA of the Pension Funds Act, read with the definition of “statutory ombud scheme” in the FSR Act, the Adjudicator is a statutory ombud scheme.

The Ombud Council on 30 September 2025 published draft Ombud Council Rules for the Pension Funds Adjudicator for public comment. The draft rules do not introduce material changes to the existing Adjudicator’s complaint-handling processes or impose new obligations on complainants, respondents, or stakeholders generally – it aims to provide clarity on procedural matters.

Noteworthy points include the following –

• who qualifies as “complainants” – Rule 3 aligns the term to the definition as set out in the COFI Bill

• creating a mechanism for the Adjudicator to issue a default determination – Rule 9 confirms that the Adjudicator may resolve a complaint based on available facts and information, adequate to make a final determination, notwithstanding the lack of co-operation by or non-response from a respondent. In essence it creates a mechanism for the Adjudicator to issue a default determination in the circumstances.

• powers of Adjudicator to award costs and interest – Rule 10 confirms that the Adjudicator may include an award of costs or interest as part of a determination. This Rule substantively aligns with a similar provision applicable to the FAIS Ombud, and corresponding provisions proposed in the consequential amendments to the FSR Act. Where a costs award is concerned, sub-Rule 10(2) sets out the criteria the Adjudicator must consider in quantifying the award, while sub-Rule 10(1) provides that a costs award against a complainant may only be made in limited instances of improper or unreasonable conduct by the complainant.

• enforcement of contraventions, particularly the failure by employers to pay contributions in terms of section 13A of the Pension Funds Act – Rule 14 reinforces the role the Adjudicator can play in supporting enforcement of and deterring section 13A contraventions, acting as a potential additional member protection measure by supplementing the reporting obligations imposed on other parties by FSCA Conduct Standard 1 of 2022.

Conclusion

The Ombud Council previously invited comments on an earlier draft of the rules through targeted informal consultation from the members of the FSCA Market Conduct Committee which took place in April 2025. Comments were received from several industry stakeholders as well as the FSCA. Comments on the updated draft are open until 14 November 2025.

The Rules will come into operation one month after the date of final publication on the Ombud Council’s consultation processes under the FSR Act. The Ombud Council is of the view that no further transition period is required for implementation. However, feedback on this approach has been invited.

ENDS