Good governance is key to the well-being of the retirement funds industry, says the Pension Funds Adjudicator, Muvhango Lukhaimane.
Addressing the winter conference of the Batseta Council of Retirement Funds for South Africa in Durban, Lukhaimane said in the light of recent reforms with much stronger regulation and supervision, compliance was not enough.
“The technocrats have put in place new rules of the game. However, it is no longer only about compliance.
“It is about the decision-making process and the implementation of those decisions. It is about governance,” she said.
Batseta is a non-profit organisation that looks after the interests of Principal Officers, trustees and fund fiduciaries in the retirement industry.
Lukhaimane said boards of funds have to embrace change, set clear strategic objectives and address the needs and well-being of their members.
She said excessive legislation and regulation should be avoided.
“Anyone can pass legislation - in fact the most repressive governments have thousands of laws.
“But if you pass laws in order to ensure accountability, the laws must be sound and widely supported.”
Lukhaimane said the law requires that when you transgress, you are punished but when governance is the ideal, there is guidance, encouragement and education in order to sustain and embed service of the highest order.
“Good governance fosters partnerships between funds, administrators and regulators.
“Good governance considers the rule of law but also encompasses transparency, participation, accountability and sustainability.”
Lukhaimane stressed the need to be positive about the current reforms to ensure good governance.
The government’s implementation of the final retirement funds default regulations requires all retirement funds to adopt a set of default options for fund members in terms of investments, preservation and pensions at retirement.
“Provide feedback about the reforms. State what works and what doesn’t. If certain aspects of the changes must be incremental, then say so.
“As a community, it is important to share critical insights as to what works. This must not be a one-size-fits-all situation because the protection of members and the advancement of their interest remain central.
“Therefore, I expect you to ask questions, be proactive. Regulators must be held to account why the new way is best, so that you invest in it with participation and feedback,” Lukhaimane said.
ABOUT THE PENSION FUNDS ADJUDICATOR
The Office of the Pension Funds Adjudicator (OPFA) is a statutory body established to resolve disputes in a procedurally fair, economical and expeditious manner. The adjudicator's office investigates and determines complaints of abuse of power, maladministration, disputes of fact or law and employer dereliction of duty in respect of pension funds. The OPFA is situated in Pretoria, Gauteng.
For general enquiries or to lodge a complaint visit www.pfa.org.za, call 012 346 1738 or email Enquiries@pfa.org.za