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In response to a parliamentary question posed by the Democratic Alliance (DA), the Financial Securities Board (FSB) has revealed that the curators of insolvent pension funds have taken R 126 million from the coffers of pension funds since January 2004. This translates to R 21 million paid per year to curators to rehabilitate 12 funds - roughly R 270 000 per month on average.
Fund Date placed under curatorship Fees paid to curator Months elapsed since curatorship began Average monthly fee
SACCAWU National Provident Fund 10-Sep-2002 R 10,330,999 85 R 121,541
Mitchell Cotts Pension Fund 15-Mar-2005 R 13,665,064 55 R 248,456
Datakor Pension Fund, Datakor Retirement Funds & Cortech Pension Fund 21-Apr-2005 R 31,286,904 54 R 579,387
Picbel Groepvoorsorg fonds 17-Oct-2005 R 2,840,970 48 R 59,187
Lucas SA Pension Fund & Prestolite Pension Fund 14-Feb-2006 R 16,145,033 44 R 366,933
Sable Industries Pension fund 20-Apr-2006 R 1,130,703 42 R 26,922
Powerpack Pension fund 04-Oct-2006 R 20,300,220 36 R 563,895
Fidentia Asset Management, Bramber Alternative 01-Feb-2007 R 10,827,000 32 R 338,344
Ovation Global Investment Services 02-Mar-2007 R 15,425,000 31 R 497,581
Progressive Invesment Trust 12-May-2008 R 2,271,156 17 R 133,597
Duelstream Securities 07-Oct-2008 R 931,381 12 R 77,615
New Era Life Assurance Company 07-Jul-2009 R 903,767 3 R 301,256
Total R 126,058,197 R 276,226

Urgent action needs to be taken to avoid wasting the money of pension funds - the FSB and the National Treasury cannot stand back while millions in pension fund contributions are bled off by individuals who are supposed to save the money of these funds. A pension fund is the single most important source of income after retirement - the fact that so much money is siphoned off bodes ill for employees who have dutifully made their monthly contributions over their professional lives.

The FSB has tacitly admitted that the period of curatorship is drawn out in order for some of the curators to bleed off as much money from the funds as possible. This has become such a problem that the FSB said that a review of the curator's compensation is in order to "reduce the incentive for stretching out the period of curatorship as they are paid on an hourly rate."

Though skills involved with rehabilitating/liquidating a pension warrant adequate remuneration, it is scary that the FSB seems to be powerless to stop some curators from bleeding the funds dry. A serious assessment of the system needs to take place in order to protect the public. The DA will be posing further parliamentary questions in this regard to the FSB.