The flawed pension fund surplus legislation must urgently be amended, although politicians feel that ”they’ve done a good job on this issue”, Alexander Forbes Financial Services (AFFS) said on Tuesday.
”We welcome the act, and it is necessary. Unfortunately, the way it was rolled out, it was flawed,” AFFS director Leanne van Wyk said.
”There are real problems with this legislation.”
Alexander Forbes Limited is listed on the JSE Securities Exchange SA, and the company provides services relating to risk and benefit.
Van Wyk and her colleagues at the AFFS were addressing journalists on the 2001 Pension Funds Second Amendment Act in Johannesburg.
The Act was promulgated on December 7 last year and is aimed at distributing R80-billion of surplus in funds to pensioners, former and active members, and employers.
It was not clear from the Act, notwithstanding a definition, what was intended to be included within the concept of ”actuarial surplus”.
The problem with the legislation was that it was inconsistent. Regulations within the Act do not complement the legislation, Van Wyk said.
”This is an extremely complicated piece of legislation,” she said.
”Your regulations are there to complement each other. At the moment, they don’t. It’s clear that the Act requires amending. I think there is merit in having the major issues resolved,” Van Wyk said.
”The only way of getting certainty in the legislation is to amend it, if you can’t, you must go to court and that is cost. Litigation takes a lot of time.”
She said some organisations would want to go to court because whenever there was a lot of money involved, organisations were inclined to seek to make a profit.
”It’s always worth litigating where lots of money are involved,” she said. ”That means legal costs.”
Van Wyk said she understood the reluctance of parliamentarians to amend the legislation because they have more pressing matters to deal with, but also ”the issues are so difficult”. – Sapa