PENSIONS: New Pension Funds Adjudicator Urges for Better Communication
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Addressing 250 principal officers and trustees representing seventy five percent of the top 100 retirement funds in the country, Pillai told the Principal Officers Association Winter Conference that since taking office six weeks ago on 1 April, he had dismissed 99% per cent of the 180 determinations made so far.
He said while these rulings or determinations could be considered mundane issues, it was clear that lack of adequate communication was largely to blame for the complaints arising in the first place.
Pillai said the typical complaints he has been dismissing through what are referred to as “letter determinations” have been:
around the quantum of withdrawal benefits;
around death benefits assessments and allocations;
around disability benefits; and
where employers are not paying in their contributions.
There were also hundreds of complaints which were time-barred and where the adjudicator had no discretion to condone the late filing of the complaint.
“The fact that we are mostly dismissing the complaints in my view indicates that there is a communication gap between the fund and the member,” said Pillai.
He said principal officers and trustees of retirement funds must step up to the plate in so far as how they communicated and what they communicated to members.
He questioned the method of communication and asked whether “sending batches of benefit statements once or twice a year” was enough.
He said benefit statements should communicate clearly with the members.
“It should be written in plain language, preferably in a member’s first language. A member cannot be expected to understand technical terms or investment jargon around pension funds.
“Remember these statements are meant for simple people who earn very little and save a small amount of that each month. All they want is to see how much they have saved,” said Pillai.
The Pension Funds Adjudicator also said there was a problem of who was communicated with. He asked whether it was adequate that in most instances umbrella funds communicated with the employer.
“Employees rely on the Principal Officer to adequately communicate information that they so eagerly seek.
“With the lack of proper communication we get mistrust and suspicion. The nature of the members’ complaints offers insight into the level of communication by funds.
“That is why 99% per cent of my determinations thus far have been dismissals. This lack of communication points a finger of blame towards the funds for not communicating effectively with its members,”’ said Pillai.
He said the majority of fund members who walk into the PFA offices complained about mundane fund administration matters, such as non receipt of benefits statements, late payment of benefits, unsatisfactory responses to complaints or no responses at all.
“These are members who are frustrated by their own funds and have nowhere to go, because they are not being appropriately attended to by their funds.
“They see the PFA as their only avenue for redress. Yet, in my view the vast majority of complaints relate to matters which the Principal Officers of the funds should have sorted out in the first place.
If you are able to satisfy the member’s quest for information about their benefits and address their queries when things go wrong, there would be no need for the vast majority of complaints that find their way to the PFA.
“We are thus being saddled with vast numbers of unnecessary complaints and then the very efficacy of the office is threatened with obvious reputational risks of backlogs in complaints handling.
“You can help us by addressing complaints and enquiries adequately and with full information that the member can understand and trust. You should take the view that the Adjudicator’s office is the forum of last choice,” Pillai added.
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