Member’s ruinous loss on pension transfer angers adjudicator
Muvhango Lukhaimane says the low withdrawal benefit from a municipal fund was dire for a former government employee, as he was not informed of the risks
The pension funds adjudicator is very concerned about the raw deal that government employees could get if they move to local government and transfer their savings to the Municipal Employees Pension Fund (MEPF) because of the way the fund calculates pensionable service for these members. Pensionable service refers to the number of years of membership of a fund. It may differ from the number of years you were employed if, for instance, you joined your employer’s fund after you started working. Describing the transfer of the savings of a member who complained to her as “ruinous” for him, Muvhango Lukhaimane criticised the fund for failing to explain the implications to the member. Members of pension funds must be kept appropriately informed before, during and after entering into contracts, Lukhaimane warned after finding that the MEPF was flouting the Treating Customers Fairly principles that guide the regulation of the financial services sector and its relationship with consumers. CJ ...
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