How corporations benefited at pensioners' expense

Legalbrief Today Issue 2422

The R42bn in unpaid benefits owed to more than four million South African pensioners is ‘a fundamental failure’ of public interest by state regulators and pension fund administrators, a year-long investigation by Open Secrets has concluded, according to a Daily Maverick report. Open Secrets researchers Michael Marchant, Mamello Mosiana, Leila Khan and Zen Mathe found that the pensions industry had been structured to ‘benefit its dominant corporations while leaving pensioners and other fund members out in the cold’. The report, titled ‘The Bottom Line’, probed the ‘multiple failures’ that led to the mass cancellation of 6 000 pension funds by the FSB between 2007 and 2013 while many still had assets and beneficiaries. These unpaid funds were shifted to the ‘unclaimed benefits funds’ of private companies appointed by the Financial Services Board to administer them, at a fee. According to the FSB’s 2018 Annual Report, more than R42bn in benefits is owed to more than four million pensioners and pension fund members. This came to light courtesy of the work of two whistle-blowers, pensions lawyer Rosemary Hunter and former Liberty Corporate employee Michelle Mitchley, and the issue is explored in detail in the DM report.

Full Daily Maverick report