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Category:
Insurance
News /
Life
Insurance /
January 2007
Check your retirement
fund statements regularly, warns Old Mutual
Members of pension funds should at
least receive an annual statement
Just because your pension fund
contribution is deducted regularly from your salary, do not assume
that it is paid over to your pension fund.
This
warning comes from Tim Cumming, MD of Old Mutual Corporate, in the
wake of a recent ruling by the Pension Funds Adjudicator (PFA),
Vuyani Ngalwana, against an employer who failed to transfer an
employee’s monthly contributions to his pension fund.
Cumming said the
PFA
regarded this in such a serious light that he has sent a copy of his
determination to the Minister of Finance and the Financial Services
Board with a request that the penalties be increased. The
PFA
also said in his ruling the non-payment of contributions was a
"punishable offence" and he has asked the National Director of
Public Prosecutions to take action against the company.
“Members should take responsibility for
all aspects of their financial well being which include checking up
on their pension fund contributions. They must ensure that their
contributions to a pension fund are not only deducted, but that it
is paid over regularly to the pension fund as it should be”, says
Cumming.
“In the light of what has happened,
members of pension funds should be far more vigilant. It is the same
with checking your bank statements regularly,” he says.
Cumming said that while the majority of
trustees of pension funds took their role of protecting the
interests of their members very seriously, there are undoubtedly
trustees who are not on top of all the issues as they are required
to be. “In the interest of good governance, such trustees need to be
more meticulous in the execution of their duties”.
Cumming says by law members of pension
funds should at least receive an annual statement from their pension
fund showing the contributions made to the fund. Ideally they should
be receiving quarterly statements from their pension fund or pension
fund administrator.
Cumming also emphasises the importance
of employing the services of a reliable and robust pension fund
administrator. He says good fund administrators typically have the
following characteristics in common:
They are transparent in their dealings
with members; they have a single point of contact; they have
accurate member records that are maintained for members to access at
their convenience, data integrity is maintained; and benefit claims
are processed accurately and efficiently.
Cumming says that where employees
belong to an umbrella retirement fund, members can maintain their
involvement in their fund by setting up member committees to
represent them at participating employer level. This can be a good
mechanism to facilitate better communication with members. Member
elected trustees must be vigilant and report to members regularly.
“Members ought to take a far more
serious interest in the workings of their retirement fund and should
question their trustees and administrator if they are in doubt about
any issue,” he says.
Source: ITInews – Insurance
Times and Investments Online
www.itinews.co.za
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