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Consumer Affairs
Monday, September 1, 2008
Playing catch up

The Office of the Pension Funds Adjudicator has recently embarked on a Conciliation Service, which is expected to commence with its hearing in September 2008. It has for some time been faced with the biggest backlog of cases that has built up for some time and has now reached in excess of 10 000 open files, with some cases dating back to four years ago.

This backlog has necessitated that the office put in place measures that will best address the speedy disposal of these complaints, in line with its legislative mandate to dispose of them in a procedurally fair, economical and expeditious manner. Further, the provisions of section 30E of the Pension Fund Act provide the Adjudicator with the following powers: that “in order to achieve his or her main object, the Adjudicator may, if it is expedient and prior to investigating a complaint, require the complainant first to approach an organisation established for the purpose of resolving disputes in the pension funds industry or part thereof”.
Therefore, in line with this legislative imperative, the Adjudicator decided that the most expedient, appropriate, tried and tested dispute resolution mechanism was that of conciliation. Thus, where in the opinion of the Adjudicator a matter is capable of speedily resolution or alternatively is of such a nature as to be better capable of resolution through negotiation as opposed to adjudication these matters will be referred to conciliation. This procedure is aimed at ensuring that disputes are resolved or disposed of as speedily as possible and the anticipated turnaround time for complaints is ninety days from date of referral to the PFA. In order to facilitate this process his office has drafted ‘’, Conciliation Guidelines which lay down the principles and procedures that will govern the process.

The guidelines in brief

Prior to finalisation of the guidelines the office of the PFA will engage in a process of consultation with various stakeholders in the pension funds industry in order for them to comment on the Draft Conciliation Guidelines. Valuable comments were indeed received from various stakeholders and were considered and incorporated in formulating the final conciliation guidelines; and these provide for the following in summary:
• The decision on which matters will be referred to conciliation will be that of the Adjudicator;
• Matters will be referred to conciliation upon receipt of the complaint, prior to commencement of the investigation;
• The conciliation process will be undertaken by independent third party conciliators appointed by the Adjudicator;
• The proceedings are to be private and confidential;
• The Adjudicator will decide on the matters that have to be conciliated;
• Conciliation proceedings will be undertaken in person or telephonically depending on the circumstances;
• There shall be no legal representation between the parties in order to ensure parity between them in light of the objective of the conciliation process;
• Whereupon the parties reach settlement of their matters the written agreement will become binding once it is signed by the Adjudicator, which will give it the status of a ‘Conciliation Determination’, with the same force and effect as any other determination by the Adjudicator.

Additional notes

Composition. The Conciliation Service will be undertaken by a team of conciliators appointed with specific regard to their vast experience in alternative dispute resolution. The day to day activities of the conciliation service will be administered by a Conciliation Coordinator.
Location. The Conciliation Service will be housed in a separate block from the OPFA at its Johannesburg Head Office in order to detach it from the mainstream OPFA work. From time to time, however, conciliators will travel to other parts of the country in order to perform conciliation services nearer the parties.
Service delivery outputs. It is expected that the conciliation service will be able to deal with 2 300 complaints within the current financial year, with a prospective 45% settlement rate.

Copyright © Insurance Times and Investments® Vol:21.8 1st September, 2008
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