Your retirement fund is treading on thin ice if it fails to provide you with correct information.
Professor John Murphy, the Pension Fund's Adjudicator, has slammed the administrators of the AECI Employees Pension Fund, Old Mutual Employee Benefits, for their dismissive attitude and for providing conflicting information to a widow about her benefits. Murphy has now ordered an independent audit into the AECI fund's finances. This is the first time he has ordered such an audit.
The scant information provided by Old Mutual Employee Benefits and its failure to respond to Christina Mphahlele's letters is "arrogant and is totally unacceptable in the pensions industry", Murphy says.
When Mphahlele's husband, who was a member of the fund, died in 1981, Mphahlele received just over R10 000 in death benefits, which were paid into a trust fund, from which she received a monthly income. Seventeen years later, she learnt from Old Mutual Employee Benefits that the value of her trust was about R32 000, in March 1998.
Yet in August the same year, the AECI Pension Fund informed her that she had no money left in her trust account. A second letter from the pension fund informed her that an audit showed the trust was in arrears by about R5 000 and that she would not receive further monthly payments. Several letters to the pension fund querying these discrepancies were unanswered.
Naleen Jeram, who investigated the complaint for Murphy's office, says:
* If your fund fails to give you the information you need to exercise your rights, it is breaking the law;
* It is even more important that your fund give you adequate relevant information when you have to make a decision which may have adverse consequences for you; and
* Your fund has a duty to keep proper books and ensure that proper control systems are in place.