South Africa’s pension fund industry is once again under scrutiny after the Pension Funds Adjudicator criticised several retirement funds for governance failures, poor administration, and lengthy delays in processing death benefit claims.
The latest rulings have raised concerns about whether some pension funds are adequately protecting vulnerable beneficiaries who rely on these payouts for survival.
In one of the most serious cases, the Office of the Pension Funds Adjudicator (OPFA) found that a death benefit claim lodged in 2017 remained unresolved for nearly nine years. The complaint involved the Chemical Industries National Provident Fund, where the deceased member’s mother said she depended on her son financially for groceries, medical costs, and policy payments before his death.
According to the determination, the fund was unable to confirm whether a formal resolution to approve the payment had ever been passed or whether the benefit was ultimately paid out at all. The adjudicator described the situation as a severe breakdown in governance and accountability.
The deceased employee had reportedly accumulated a fund credit of just over R40,000 before his death in April 2017, yet the matter remained unresolved for years while the complainant continued to wait for answers.
Pension Funds Adjudicator Lebogang Mogashoa has repeatedly warned that retirement funds have a legal duty to investigate, allocate, and distribute death benefits within a reasonable timeframe, particularly where dependants may be financially vulnerable.
Another recent ruling involved the Mineworkers Provident Fund, where the adjudicator criticised the fund for what he called a passive and reactive approach to processing a death benefit worth more than R458,000.
In that matter, the adjudicator said the fund’s conduct reflected “passiveness, reactivity and lethargy” after delays stretched over several years while dependants waited for payment. The case highlighted administrative challenges linked to verifying marital status and beneficiary information, but the adjudicator stressed that delays cannot come at the expense of beneficiaries’ rights.
The growing number of complaints against retirement funds points to wider governance and compliance concerns within the industry. According to industry reports, the OPFA received more than 10,000 complaints during the 2024/25 financial year, with delays in benefit payments and employer non-compliance among the leading causes of disputes.
Financial experts say death benefit disputes are often emotionally and financially devastating because beneficiaries may depend on those funds to cover funeral expenses, debt, school fees, and daily living costs. Delays can leave families without income for months or even years.
Under Section 37C of South Africa’s Pension Funds Act, retirement fund trustees are required to identify dependents and distribute benefits fairly after a member’s death. Trustees are also expected to conduct proper investigations and keep accurate records throughout the process.
The recent rulings suggest some funds are failing to meet these obligations due to poor recordkeeping, weak governance structures, and inadequate communication with beneficiaries. In several cases, the adjudicator has also criticised funds for failing to respond to complaints timeously or for neglecting to properly trace beneficiaries.
The scrutiny comes at a time when South Africa’s retirement fund industry is already under pressure to modernise systems and improve member protections. Recent legislative reforms, including amendments linked to the two-pot retirement system, have placed greater focus on governance, compliance, and accountability within pension funds.
For ordinary South Africans, the rulings serve as a reminder of the importance of keeping beneficiary nominations updated, ensuring personal records are accurate, and regularly checking that employers are paying pension contributions correctly.
The Pension Funds Adjudicator has indicated that retirement funds cannot simply delay claims indefinitely while beneficiaries suffer financial hardship. The office continues to warn that funds failing to comply with their legal obligations could face further regulatory scrutiny and enforcement action.
