Lukhaimane appointed as SA's Pension Funds Adjudicator

Muvhango Lukhaimane

Lukhaimane has served as deputy pension funds adjudicator since 1 June 2012, during which time she kept her promise to reduce the backlog of complaints going as far back as 2007. Furthermore, despite the operational challenges occasioned by the recent relocation of the Office of the Pension Funds Adjudicator to new offices in Pretoria, 22% more new complaints were resolved in the year to 31 March 2013 than during the previous year.

A wealth of experience

Lukhaimane, who possesses a wealth of experience as a seasoned lawyer, and has been employed within the pension funds industry and in human resources, sees her latest appointment as Pension Funds Adjudicator as a pulling together of her skills acquired throughout her working life.

After matric, she decided to embark on a career in law and obtained a B.Iuris degree from the University of Venda. This was followed by the LLB degree from the University of Pretoria. Through part-time studies she obtained the Master of Laws degree, with emphasis on human rights law, constitutional interpretation, labour law and medical jurisprudence. The title of her dissertation was "The Right to Die: Does the Constitution Protect This Right?"

Lukhaimane also obtained a Postgraduate Diploma in Management Studies from Buckinghamshire Chilterns University College and a Postgraduate Diploma in Financial Planning from the University of Free State. She recently completed an MBA through Wits Business School.

Her first job was at the University of Venda from January 1995 to January 2000 as a law lecturer. She then took a job as research consultant at Sanlam Employee Benefits in Cape Town and was legal advisor at the same office from May 2001 to June 2002. From July 2002 to June 2003, she was legal consultant at Liberty Personal Benefits in Cape Town. From July 2003 to March 2005, Lukhaimane was principal officer of the Eskom Pension and Provident Fund.

From April 2005 to May 2007, she was general manager: research at the State Security Agency in Pretoria and moved within the agency to hold the position of general manager: human resources from June 2007 to May 2011. From June 2011 to May 2012 she was chairperson: intelligence services council at the Ministry of State Security Agency in Pretoria. Lukhaimane's scope of duties included preparing, leading and executing the Strategic Plan of the Council, advising and making recommendations to the minister on the development of policies on human resources and conditions of service and advising and making recommendations to the directors-general on alignment and compliance of all human resources and conditions of service.

Increased stakeholder engagement and enhanced credibility

Commenting on her new appointment, Lukhaimane said as head of the Office of the Pension Funds Adjudicator, she will work harder at improving stakeholder interaction so that the dispute resolution forum becomes more visible to the public.

"There is need to enhance the credibility and integrity of the pension funds industry, especially in light of the prevailing perception around the behaviour of other participants within financial services.

"With the increased participation of labour organisations in the pension funds industry, efforts will be undertaken to engage with this very important stakeholder," said Lukhaimane.

She said pension funds played an important role in the national economy. "Pension funds, smartly invested, provide a mechanism for unlocking savings, stimulating economic growth and ensuring that pensioners are provided for in retirement.

"By regulating them appropriately, the elderly can be protected against poverty, investment can be facilitated and systemic risk reduced."

Lukhaimane said in relation to the size of the economy, South Africa has one of the largest pension fund industries in the world, with nine million members and assets in excess of R2 trillion.

A need for prudential oversight and education

Although pension funds are slightly different from other prudential entities like banks, which guarantee deposits upon demand, they do raise prudential concerns due to the long-term nature of contributions and the risks involved to meet such promises, she said. Although the collapse of a pension fund does not necessarily pose a threat to the entire financial system or economy, collapse due to mismanagement and fraud could profoundly damage the future of pension fund members, and also undermine the certainty and incentives of the savings regime.

"For these reasons, pension funds require good prudential and member protection oversight.

"There is need for effective and regular education for actual and possible pension fund participants and retirement annuity fund holders regarding the need to save, planning for retirement and investing and financial literacy in general.

"This can counteract poor financial decisions by members. This education, however, must start with children at home and in schools."

Lukhaimane said trustees played a key role in the governance of pension funds. Hence trustees must have the relevant education, experience and skills to make investment decisions consistent with the best interest of the pension fund and its beneficiaries. To this end, government was considering making it a statutory requirement that trustees be fit and proper with certain minimum qualifications, which should be achieved within a fixed period from the date of appointment.

Advocate Dube Tshidi, executive officer of the Financial Services Board, said Lukhaimane's appointment would only help take the Office of the Pension Funds Adjudicator to greater heights, given her impressive career credentials. "The fact that she is a seasoned lawyer, and an experienced industry player means that she will bring real value to the pensions industry," he said.

For more information, go to www.pfa.org.za.