A few weeks ago I suggested that legislation allowing employers restricted access to the substantial surpluses that have built up in many retirement funds should be put on hold until a number of issues around retirement funds had been resolved.
Peter Milburn-Pyle, the chief actuary at the Financial Services Board (FSB), who has drafted the legislation and has spent many days discussing it with affected interest groups, does not agree.
My first reason for making the suggestion was that many funds are still run by employer-appointed trustees, who could still favour the position of the employer. This situation may only be corrected by the end of next year when it becomes compulsory for half the trustees to be elected by members.
Milburn-Pyle says this will be the first item on the FSB checklist of required information when an application is made for the withdrawal of assets.
"Until we are satisfied that the trustee body will address the matter with proper regard to the rights and reasonable expectations of members, the withdrawal process will not proceed."
That makes me feel a bit more comfortable but I would suggest that no withdrawal of a surplus should be permitted until a trustee board has elected member representatives.
My second argument was the current debate about what constitutes an unfair labour practice in the operation and rules of a retirement fund.
Milburn-Pyle argues that the surplus withdrawal process will "ensure protection of members' rights, as embodied in the rules of the pension funds concerned.
"We (the FSB) go further and provide, among other conditions, that existing pensions must be raised to an inflation-proofed level, and withdrawal rights must be raised to an inflation-proofed level, and withdrawal benefits must be raised (effectively to the full actuarial reserve)."
Milburn-Pyle added that the entire surplus withdrawal process has been designed to provide a logical and equitable balance between the interests of the employer and employees and to avoid unfair treatment of either party.
I accept that the FSB is doing everything possible to protect the current interests of fund members. My original article should not be seen as a criticism of the FSB or of Milburn-Pyle, who incidentally in my view is one of the good guys.
What worries me is that previous unfair rules and practices may open up funds to litigation and substantial claims. Many of these claims could hinge around unfair withdrawal benefits when a member resigned or left a fund and was paid out own contributions plus a below-market return.
It must be remembered that part of the surpluses that have been built up have, in many cases, come from former members being given poor withdrawal benefits.
Another example is discrimination where current members were previously denied membership on grounds of race, sexual preference or any other factors.
The problem is what happens if there is a successful legal action? Who will meet the liability - the fund, the trustees or the employer? I do not know the answer but I would still suggest that until we have had one or two cases it may be a good idea to hold onto some of the surplus funds.
Finally, the question in principle of who owns the surplus remains unanswered.
Milburn-Pyle is of the school which states that the surplus belongs to the employer. However, in a recent court judgment, Judge M S Navsa ruled this was not necessarily so. He also found that any employer contribution holiday as a result of a surplus should have arisen from over-contribution by the employer.
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My prize for the most obfuscatory, unintelligible and non-sensical statement of the year, if not the decade, is awarded jointly to Nedcor, Old Mutual, Didata, Wooltru and the newspapers which published the statement without interpretation.
If you were puzzled by the reports of the first "virtual private network" the four intend to establish with phrases like: "It enhanced operational leverage through lifting volumes and cutting costs", don't be concerned about your sanity.
This was a public relations snow job at its worst. What the companies are planning to do is collect as much information on you as they can to target you more effectively to get a bigger slice of the money you spend. And they will be prepared to sell-on the information to other businesses.
To encourage you they will offer you an incentive programme such as rewarding you with something for however much you spend.
The type of information they will collect and share about you will enable them to target you with exact products to meet your wants.
This may or may not be a good thing but when it is dished up in the type of language used last week one can only wonder at the motives.
To me the best quotes (read worst) came from Nedcor's Richard Laubscher, who among other things said this was not a "big brother is watching you" operation. Well, to go with the rest of the book to which he was referring, 1984 by George Orwell, there is also the issue of Newspeak - an unintelligible language which aimed at befuddling all those who were subjected to it! I would not go as far as suggesting doublethink, but I would suggest Orwell could have used Laubscher as a Newspeak model.