Today's Labour News

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retirementBusiness Times reports that armed with a new mandate to be more "proactive, pre-emptive and intrusive", the Financial Sector Conduct Authority (FSCA) is going to clamp down on corruption in the pension fund industry that is denying employees a dignified retirement.  

That was said by Naheem Essop, a specialist analyst in the regulator's retirement funds supervision division.  Most service providers, including legal advisers, administrators and investment advisers, were overcharging retirement funds and bribing trustees, he told the annual conference of the Pension Lawyers Association of SA last week.  The practice was "prevalent", he said, citing the example of an attorney who charged R72,000 to prepare a "perfectly standard" two-page document.  The Financial Services Board was criticised for regulatory failures but the FSCA, which replaced it as part of the new "twin peaks" model of financial regulation, was "something very different", Essop warned.  "Our guiding principles are to be intrusive and outcomes-based.  There's a new mandate and new ways we're going to be doing our business."  He indicated that the authority would be pre-emptive and proactive in identifying risks, "not waiting until something happens and then identifying what led up to it".  Last year, it issued a directive that stopped service providers from bribing retirement fund trustees.  "It interrupted service providers entertaining trustees at the Cape Town Jazz Festival.  Some of them were quite upset about that because they had spent in excess of R500,000 to entertain these trustees."  Essop has no doubt that the money for such entertainment is factored into the "excessive" fees that service providers charge pension funds.

Read the full original of Chris Barron’s report in the above regard at BusinessLive

Get other news reports at the SA Labour News home page