Consider pensions adjudicator

Editor | Thursday November 8, 2007 00:00

The industry represents savings made from hard earned money from people who worked in the government and private sectors for many years.

The growth of the pension industry brings complexities in managing it and increases new challenges to the regulators.

Firstly, to deal with this phenomenal growth, government is setting up a non-banking financial regulator to keep the operations of the micro lenders and asset management companies in check. The organisations currently have no visible governing body.

Lately, there has been a clarion call by members of pension funds seeking the establishment of an office for the pension funds adjudicator (PFA).

The setting up of such a facility would help the industry to keep pace with the development of the industry.

The PFA is already operational in mature markets like South Africa and it would be ideal for the local industry to come up with its own.

The advocates of the office argue that it would compliment other dispute-resolution mechanisms like trustees to which members usually run when they have queries.

The office of the PFA will also reduce litigation in which members rush to lawyers for legal redress if they are not happy with the outcome of their disputes which are usually costly to members.

Although we are not doubtful about the abilities or qualifications of the pension fund trustees, we believe that because the office requires autonomy, the PFA will be more transparent compared to some of the suspect trustees.

Because the board of trustees of the pension fund would not be full-time employees, the PFA office would help them tackle some of the work they have to do.

We have seen adjudicators in the banking sector reporting useful feedback from the consumers of banking products.

Because of his or her independence, the banking adjudicator in Botswana has already compelled big banks to toe the line.

It is our expectation that because of the transparency required of the PFA office, the public will know more about the operations of the pension funds industry which is currently a mystery although it handles billions in pensioners' money.

We believe that the establishment of the pension fund adjudicator will reduce unnecessary legal proceedings and facilitate the handling of complaints in a transparent manner.

                                                    Today's Thought
They need to make certain as part of a becoming a state that they take action to have transparency, the rule of law and fight corruption.
                                                    - Ari Fleischer