Regulator berates service providers for overcharging pension funds
Exploitation spans the spectrum of professions, industry regulator says
Most service providers, including lawyers and administrators, are overcharging retirement funds, endangering the ability of employees to retire with dignity, the industry regulator says. Naheem Essop, a specialist analyst in the retirement funds supervision division at the Financial Sector Conduct Authority, said despite their size, retirement funds are not using their economies of scale to bargain for better services at reasonable prices for their members. Essop, speaking at the annual conference for Pension Lawyers Association of SA in Johannesburg on Monday, said the exploitation spans the spectrum of providers, from external legal advisers to administrators and investment advisers. “All too often we pick up that retirement funds are paying service providers well in excess of reasonable market rates. A prime example is the appointment of external legal advisers to the funds. It is cheaper for retirement funds to be sued in a high court than it is to get advice from a pension fund...
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