New pension funds adjudicator Professor John Murphy, who has now set up office, is in for a tough time judging from the volume of complaints Personal Finance has being receiving from fund members.
His job will not be made any easier because of the limitations imposed on him by legislation.
The most important of these limitations is the restriction that his findings be based in terms of the rules of funds.
Most of the complaints that Personal Finance receives are based on the fact that the rules of funds have been unfair and not the actions taken in terms of funds.
For example, let us take the blatantly unfair withdrawal rights of many funds. There are funds which still have rules which allow members to only take their own contribution plus minimal, if any, interest, let alone employer contributions. These rules were drawn up by employers, aided by actuarial consultants, who were scared of losing business and were eminently unfair.
There is little doubt that companies, following these bad employment practices, will use perceived and actual limitations in the legislation in an attempt to stymie Murphy and continue with the practices.
Having met Murphy recently my impression of him is someone who will go as far as possible to find equity and fairness. The extent to which he will be able to do so is a matter for legal debate.
But as Francois Jooste, the chief legal adviser of the Financial Services Board, points out the legal system is based on the rule of law and not on equity.
In other words whatever rules, set up in terms of those laws, must be abided by.
The big advantage Murphy has in playing what effectively is the role of an ombudsman over ombudsmen in associated financial service sectors is that he is not appointed or paid by any part of the industry and that his powers are enforced by law.
Murphy agrees that this could cause problems but he intends to seek equity as far as possible.
And he has a secret weapon up his sleeve. He intends to remain a member of the Commission for Conciliation, Mediation and Arbitration (CCMA).
The CCMA was set up in terms of the Labour Relations Act two years ago. Among its functions is the duty to deal with cases of unfair employment practices.
If Murphy cannot deal with the problem under the pension adjudicator hat, the complainant may be able to refer the matter to the CCMA and Murphy may get to deal with the issue there.
While on the issue of the CCMA, there were some fairly strong statements reported by Personal Finance last year that the new Labour Relations Act could be used to correct past injustices.
The CCMA then went very quiet on the issue and despite a number of reminders from Personal Finance, there has been no clarity, with various regional offices of the CCMA putting out conflicting statements to individuals seeking justice.
Hopefully, now that we have someone with feet in both camps, these issues will be resolved.
There is one other remedy available to members but this will only become generally available to members of funds registered with the Financial Services Board later this year when all funds must have 50 percent of the Board of Trustees elected by members. At that point members should make sure their elected trustees will force through rule changes to get rid of these archaic practices.
Murphy faces a number of other problems. These include:
* A three-year prescription clause on complaints. In other words, if you have not submitted your complaint within three years of the "offence" taking place or of you becoming aware of the problem, Murphy cannot hear your complaint; and
* The payment of compensation. Say Murphy finds that some fund has unfairly deprived a member of some benefit and the member should be compensated, who pays the compensation? The fund? If so does this not have implications for the benefits of other members?
With his background as head of the Department of Public Law, associate Professor of Law and Director of Community Law at the University of the Western Cape and having a number of years experience as a professional labour arbitrator, there could not be a better person for the job.
Personal Finance will be reporting the rulings of the adjudicator and we wish him much wisdom and fortitude.