3 October 2022 | Luvo Mnyobe
Nearly R50 billion. That is how much greedy and negligent pension funds and pension fund administrators owe to almost 5 million people in Southern Africa in unpaid pensions.
Isaac Thokoane, one of the millions affected by this injustice, explained his pain about the failure to pay out pension benefits.
“I am angry and sad at the same time… you can’t expect a person like my father — or the rest of the people owed pension benefits — to work for so many years and then be deprived of access to their entitled benefits. It doesn’t make sense”, said Isaac speaking to the Daily Maverick.
While many elderly pensioners and their families continue to suffer without the pension benefits owed to them, fund administrators, asset managers, and other financial actors rake in fees, profiting from this great injustice. Pension fund administrators have tried to absolve themselves of responsibility by calling them unclaimed pensions. But this is an inaccurate description.
Administrators must take responsibility
“The administrators like to use the word unclaimed because they want to blame people but, as we know, many people have been trying to claim for years and still have not been paid,” said Dale McKinley, a steering committee member of the Unpaid Benefits Campaign (UBC).
“We say unpaid because when we say unclaimed, it puts too much responsibility on the victims of this injustice,” said our Head of Campaigns, Mamello Mosiana.
Mamello spoke to SAFM about the People’s Hearing on Unpaid Pension Benefits held at the Women’s Jail at Constitutional Hill last week. The People’s Hearing was organized by Open Secrets together with the UBC on the 13th of September.
Thomas Malokotsa, steering committee member of UBC spoke to ENCA about the failure of administrators to pay the claims to these pensions. Malokotsa explained that the UBC had been inundated with pensioners requesting assistance in getting their benefits paid out.
Malokotsa told ENCA’s Masego Rahlaga, “We are hoping to have all the pension administrators and the regulator (Financial Sector Conduct Authority) to sit and listen to the grievances of the people affected by this negligence.”
Victory towards justice for unpaid benefits
Open Secrets and the UBC had been agitating the FSCA to act against the unlawful “Cancellations Project” for four years. Effectively, the Financial Services Board (now FSCA), allowed pension fund administrators to cancel the registrations of thousands of pension funds when those funds still had money that was owed to beneficiaries. The cancellations project, we have argued, is one example of how the industry has been structured to benefit its dominant corporations while leaving pensioners and pension fund members in the dark.
Disappointed with the snail’s pace taken by the FSCA in tackling the unlawfully cancelled pensions, Open Secrets and UBC (represented by the Centre for Applied Legal Studies), launched an application in the Gauteng High Court to compel the FSCA to address the unlawful cancellation of pension funds swiftly, and to do so in an open and transparent way.
We are proud and disappointed to say that in the seven months since we launched the case, the FSCA did more than it had done in ten years to address the cancellation of pensions. Recognizing the progress made by the regulator in fulfilling its duties, we have now reached a settlement agreement with the FSCA.
Holding parliament accountable for unpaid pensions
The People’s Hearing was chaired by a panel including Amanda Rinquest (Black Sash), Shaeera Kalla (Activist), and Advocate Geoff Budlender SC. They led the hearings creating a space for affected parties like Thokoane to share their stories of how the injustice of unpaid pensions impacted their lives.
The panel made the following recommendations:
- The parliamentary portfolio committee on finance chairperson Mr Maswanganyi must invite Open Secrets, the Unpaid Benefits Campaign and Rosemary Hunter to present a way forward to address this national crisis which affects more than 5 million people.
- FSCA should zero rate its website and search engine tool to make it easier for beneficiaries to track their pensions.
- FSCA must fulfil its public duties and penalise fund administrators for non-compliance.
- There must be a serious exploration of psycho-social support for beneficiaries who are exhausted under the weight of this stress, and not being able to support their families and loved ones who have been robbed of the most basic comforts after the exploitation of working their whole lives, sometimes to the point of disability or death.
Luvo Mnyobe (Campaigner)