Treasury welcomes the judgment by the Constitutional Court dismissing the appeal by Rosemary Hunter seeking to procure yet another investigation into the cancellations project implemented by the former Financial Service Board (FSB) between 2007 and 2013.

Whatever the relief sought in this case, it was never going to fundamentally transform the retirement fund industry to better serve the interests of its members (of whom there are about 11-million) rather than that of industry.

The time-consuming process detracted and diverted the FSB from its primary responsibility of regulating the financial sector more effectively and intensively, to ensure that the retirement industry acts at all times in the best interests of the members of such funds.

Retirement savings (together with owning their house) are among the most important assets for the majority of working and contributing South Africans. A well-functioning and low-cost retirement saving system is crucial to reducing the vulnerability of workers and improving their financial well-being after they retire.

The conclusion of the case enables the Treasury and the new Financial Sector Conduct Authority (FSCA) to get back on track and accelerate the process of consolidating the remaining 5,118 retirement funds (made up of 1,647 active funds, as the balance and majority are inactive), together with reforms to market conduct practices and good governance.

This approach is in line with a 2008 Organisation for Economic Co-operation and Development study that small pension funds are unable to reap economies of scale and hence tend to have high costs of administration.

In any human endeavour mistakes will be made, but the fear of the consequences of such mistakes should not paralyse decision-making. Mistakes should rather be corrected and learnt from so we can make progress. The FSB always accepted that there would be mistakes and errors in the cancellations project given its scope and nature. The FSCA took action even before Hunter was appointed as regulator, and promptly agreed to her request for a formal investigation.

This has been a painful chapter for both the FSCA and the Treasury

The court has now vindicated the FSCA’s approach, pointing out in its majority judgment that Hunter’s approach could result in "never-ending investigation". It notes: "This observation must be understood within the context of the several credible investigations already conducted by people whose capacity to address actual or perceived irregularities is beyond doubt."

Contrary to media reports, this case was not about any corruption, malfeasance, whistle-blowing or unclaimed benefits. The legal arguments were complex, but as noted by judge Johan Froneman: "There is no real evidence here that the FSCA, or any of its employees, have been corrupt. While this is not a case about corruption and malfeasance, it is about whether the FSCA’s apparently good faith attempts to investigate the cancellations project pass muster."

All three judgments make similar points.

This case also did not deal directly with unclaimed funds. Nor do any of the judgments make any reference to whistle-blowing or the suppression of any whistle-blower.

A regulator is not a whistle-blower, lawyer, prosecutor, litigant, police or sheriff. A regulator has extensive powers, including enforcement powers, but must be able to engage and work with fellow regulators and others who may have different views. It was never clear to the Treasury what relief Hunter really was requesting, as her case kept on changing or "mutating" and was done without prior internal engagement.

The Treasury (and FSCA) have never doubted the integrity of Hunter; our main difference relates to her understanding of the role of a regulator.

It is regrettable that in taking up her case Hunter has "also made unsubstantiated allegations and unjustifiably impugned the integrity of various officials in the course of her employment-related complaints", according to the judgment.

Hunter has unfortunately attacked the integrity of everyone who did not agree with her or do as her "notices" dictated, and that included three finance ministers, the FSB board and her fellow regulators. It is fitting that the court found such attacks to be groundless in all three judgments. The court also dismissed allegations related to any transgressions of the Public Finance Management Act. The integrity and reputation of financial sector regulators is critical in ensuring that financial customers have the confidence that the regulators are serving their best interests and ensuring financial institutions are treating their customers better and more fairly.

In the retirement fund industry, members should be confident that their funds are safe as long as the boards of trustees, principal officers and auditors are performing their functions in line with regulatory expectations — and the regulator is doing its work in supervising them all.

This has been a painful chapter for both the FSCA and the Treasury, particularly since the FSB was in the process of being replaced by the FSCA. It was also painful because of the respect we have for the Hunter family in fighting for a better SA.

One of the key lessons to be learnt is to use the regulatory process first to resolve problems, before rushing to litigate.

Both the Treasury and the FSCA will now proceed with the broader retirement reform agenda outlined in the papers we published between 2011 and 2014, which identified a number of market failures and challenges such as poor governance and market conduct practices, low preservation, portability, annuitisation and coverage for more vulnerable workers, and dealing with unclaimed benefits through a more centralised system.

Some of the reforms have been implemented, others slowed down by this case and the need for more consultation at the National Economic Development and Labour Council.

We need to defend the gains made in reducing the number of funds from about 13,000 in 2007 to 5,144 in 2013, but we need to do more. We will engage with all stakeholders, unions and industry to reduce the current number of active funds. In doing so we will engage with stakeholders who may have any concerns, including NGOs (such as the Casual Workers Advice Office and Right2Know Campaign). We will also learn from all three judgments as they offer valuable insights and observations on how to consolidate better.

We also need to step up efforts to deal with the prosecution of the real looters of funds, as we saw with Fidentia, Peter Ghavalas and in the case involving Simon Nash. The Treasury also intends to follow up on why KPMG failed us in this process, which was conducted at the same time as its investigation at the SA Revenue Service.

• Momoniat is deputy director-general for tax and financial sector policy at the Treasury.