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BL Premium reports that the Financial Sector Conduct Authority (FSCA) has cancelled 6,757 inactive retirement funds that were found to have no members, assets or liabilities, with most also not having properly constituted boards in line with the Pension Funds Act.
The deregistration of the affected funds comes after a lengthy cancellations project was first initiated by the regulator in 2007 but was delayed after becoming the subject of litigation, allegations of corruption and three independent investigations. However, after all legal proceedings related to the matter ended up going in favour of the regulator, the FSCA was on 28 March finally able to release its findings on the deregistration of inactive retirement funds. The origins of the cancellation project have their roots in the 2005 realisation by what was then the Financial Services Board (FSB), which noticed that only 7,684 of the 13,735 retirement funds registered in SA at the time submitted annual financial statements. By 2006 the situation had worsened with only 4,384 of 13,132 registered funds submitting financial statements. After picking up discrepancies in some of the financial statements, the FSB discovered that many of the retirement funds were not active, which prompted the regulator to initiate a verification exercise to identify the active retirement funds. What it uncovered was that the majority of the more than 13,000 registered funds in existence when the cancellations project kicked off in 2007 were considered dormant, orphaned or inactive.
- Read the full original of the report in the above regard by Garth Theunissen at BusinessLive (subscriber access only)
Get other news reports at the SA Labour News home page