Earlier this month, she ordered the former trustees of IF Pension and Provident funds to repay R20m belonging to members.
In July 2010, the former board of trustees of IF funds appointed Deloitte and Touche to audit employees' pension and provident funds from 2004 to 2008. The audit was done because both funds' data were found to be inaccurate.
The audit found that the former trustees had used the money to rebuild IF Provident Fund's data and record system. The trustees, Gail le Grellier, Renier Botha, David Lepar and Carel Smith, were ordered to pay back R5m each to both funds.
Lukhaimane ruled that trustees who did not manage people's funds properly should be held liable.
She said the employees who contributed to the provident and pension funds complained to her office, accusing the former trustees of maladministration of their fund credits to pay for reconstructing IF's data and records.
The IF funds were administered by Dynamique SA Consultants and Actuaries until January 2008, when Aon South Africa took over the administration of the funds after Aon bought Dynamique's fund administration business in 2008.
The cost of the rebuilding exercise amounted to about R20m, which cost each member 2.5% of their fund credits.
The employees protested when they were told that the board intended to use their money to reconstruct the funds data and records system.
The employees said that the decision to rebuild IF's data related to un-credited reinvestments to their accounts, unrecorded switches between investments, inaccurate recording of monies deposited into the bank accounts of other funds and a lack of monthly and annual audits.
The employees said the trustees failed to ensure that the IF Pension and Provident Funds investments were made in accordance with the Pensions Act and the Financial Advisory and Intermediary Services Act 37 of 2002.
They also said that the administrator had failed to keep proper records, failed to perform monthly and annual audits and that assets and liquidity requirements were not maintained.
Also, the sale of Dynamique's fund administration business to Aon was not adequately disclosed or dealt with in terms of section 13B(5)(a) of the Act.
The employees also said that the former board of trustees failed to comply with its fiduciary duties provided in sections 7C and 7D of the Pensions Act.
The former trustees, who made the decision to effect a rebuild of the funds' data, resigned in February 2011 and the rebuild was done after the the new board had been appointed.
The new board of trustees endorsed the decision made by the previous board of trustees because they saw no need to question the decision made.
The pension fund adjudicator ruled that the parties who were liable for the maladministration of the funds' records, which caused the need for the rebuild exercise, were Dynamique, Tony Kamionsky, Aon and former trustees who contributed to the maladministration.
Lukhaimane's office issued its determination in July last year ordering IF to recalculate the member's fund values and to credit them with the 2.5% that was used to fund the cost of the rebuild exercise.
However, IF funds filed an appeal at the South Gauteng High Court, but the court upheld the decision of the pension fund adjudicator.
In the light of the court order, Lukhaimane subsequently ordered Le Grellier, Botha, Lepar, and Smith to repay the pension and provident fund employees R20-million, plus interest.
Source: Sowetan via I-Net Bridge
For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.
We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field.
Go to: http://www.inet.co.za
