The Office of the Pension Funds Adjudicator (OPFA) received a record 13 041 complaints in the past financial year, a 26% increase on the previous year, as unpaid retirement contributions, withdrawal disputes and challenges linked to the two-pot retirement system placed growing pressure on South Africa’s retirement funds industry.

The figure is the highest in the office’s 28-year history and represents a 39% increase on the 10-year average of 9 411 complaints. In the previous financial year, the OPFA received 10 331 complaints.

Presenting his first annual report, Adjudicator Lebogang Mogashoa, who took over from Muvhango Lukhaimane in December after her 12-year tenure, said the increase demonstrated that the office had established itself as a credible and trusted dispute-resolution body for the pension funds industry.

Established in January 1998, the OPFA is mandated to investigate and resolve complaints involving pension funds fairly, economically and expeditiously. Its role is particularly important in protecting retirement savings and ensuring that members can hold funds and employers accountable when disputes arise.

Unpaid contributions dominate complaints
The non-payment of retirement fund contributions by employers remained the largest category of complaints investigated and closed during the year, accounting for 61.48% of matters finalised. Withdrawal benefits accounted for a further 22.93%.

Together, the two categories represented approximately 84% of closed complaints, highlighting the extent to which members’ access to retirement savings continues to be affected by administrative and compliance failures.

The issues are also closely linked. Members may discover that their employers have failed to pay over contributions only when they attempt to withdraw their benefits, leaving them facing unexpected difficulties when they need access to their money.

Mogashoa attributed the overall increase in complaints to greater public awareness, publicity surrounding unclaimed benefits and persistent service delivery problems within the industry.

The introduction of the two-pot retirement system in September 2024 also exposed governance, administrative and operational challenges, contributing to the unprecedented volume of complaints.

The Private Security Sector Provident Fund was implicated in 75.60% of all complaints received. The Contract Cleaning National Provident Fund accounted for 3.78%, followed by the Transport Sector Retirement Fund at 3.23%, the Alexander Forbes Retirement Fund at 2.66% and the Sanlam Umbrella Provident Fund at 1.94%.

Section 13A non-compliance remains a concern
Mogashoa identified continued non-compliance with section 13A of the Pension Funds Act as a significant concern. The provision governs the payment of contributions to retirement funds, including contributions deducted from employees’ remuneration.

When employers fail to pay these amounts over to retirement funds, workers risk losing the benefits intended to provide financial security after retirement.

Such failures also undermine confidence in the retirement system and threaten the broader social protection objectives that retirement savings are intended to support.

The government’s position is that retirement saving helps workers support themselves in old age without becoming excessively dependent on their families or the state.

The high proportion of contribution-related complaints therefore raises questions about compliance within the industry and the extent to which members are being protected when employers fail to meet their obligations.

Two-pot system adds pressure
The two-pot retirement system, implemented in September 2024, allows qualifying members to access money from their savings component while preserving the retirement component for retirement, subject to the applicable legislation.

Although the system was designed to balance members’ immediate financial needs with long-term retirement preservation, its implementation has introduced new administrative demands and potential sources of disputes.

The OPFA is continuing to train staff on the system to maintain the quality of its complaint-resolution services.

Mogashoa warned that further complaints could arise from members seeking access to their retirement component before reaching retirement age, which is prohibited under current legislation.

In response to concerns about financial hardship, National Treasury has indicated that the second phase of the system may explore conditional access to the retirement component for retrenched members who have no other source of income.

Mogashoa emphasised that retirement funds must ensure members understand the financial consequences of accessing their savings.

“It remains essential for retirement funds to continue communicating the implications of withdrawing from the savings component, tax consequences and preservation requirements of the retirement component to ensure that members are fully informed and able to make responsible financial decisions,” he said.

Record number of cases finalised
Despite the sharp increase in complaints, the OPFA finalised 11 047 matters during the reporting period, the highest number resolved in a single financial year since its establishment.

The office also finalised 91% of cases within six months, demonstrating its capacity to process a growing caseload.

However, the demand for dispute resolution continues to put pressure on operational resources, making improvements to case management, internal processes and digital services increasingly important.

“The level of demand for the OPFA’s dispute resolution function continues to exert pressure on operational capacity and underscores the importance of ongoing process optimisation, strengthened case management disciplines and accelerated digital enablement.

“It also highlights the need for improved responsiveness across the retirement funds industry, particularly with regard to the timely submission of information and effective participation in the adjudication process,” Mogashoa said.

The Financial Services Tribunal received 104 applications for reconsideration of OPFA determinations during the year under review. Of these, 63 applications were dismissed, upholding the OPFA’s decisions in those matters.

Digital access remains important
Digital channels, including email and the OPFA website, accounted for approximately 70% of complaints received. However, walk-in services remained significant, accounting for 27% of complaints.

The continued reliance on in-person assistance highlights the need to expand digital services while ensuring that members who lack reliable internet access or digital skills are not excluded.

Geographically, Gauteng accounted for 45.6% of complaints, the largest share of any province. The Northern Cape recorded the smallest proportion, at 2.5%.

The figures point to the need for targeted engagement to ensure that members throughout the country know about the OPFA and can access its services when disputes arise.

OPFA plans to strengthen adjudication
Looking ahead, the office intends to strengthen its core adjudication function while using complaint data to identify recurring problems, inform policy development and encourage improved conduct across the retirement funds industry.

Changes in the broader financial ombud landscape are also expected to influence the OPFA’s mandate and its relationship with other ombud schemes.

“These developments require careful implementation, with a focus on maintaining service quality, enhancing coordination and ensuring continued accessibility.

“The funding environment remains an important strategic consideration. While the levy-based funding model enhances institutional independence, uncertainties in levy approval processes necessitate prudent financial management and ongoing engagement with relevant stakeholders,” Mogashoa said.

The record number of complaints highlights the growing demand for accessible dispute resolution, but the dominance of unpaid contributions and withdrawal disputes also points to persistent problems affecting members’ retirement savings.

For the OPFA, the challenge will be to maintain timely and effective complaint resolution while addressing recurring industry failures and ensuring that retirement funds meet their obligations to members.

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