The rats who ate our pension

Noseweek Issue #119, 1st September 2009   


The rats who ate our pension

Sanlam dragged to the brink in ding-dong, behind-the-scenes, battle over stolen millions.

Sanlam and its investment division, Sankorp, were the single-biggest beneficiaries of the "Ghavalas option" and all those who thought Sanlam would now rush to do the right thing were wrong. 

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Submitted by : Heather Cassingham of Cape Town on 2009-09-30 15:50:27
How depressing to see how toothless the FSB and the Registrar of Pensions have been regarding surplus stripping. I have just been notified by Nedbank that my NBS pension surplus apportionment of 10 cents in the rand is ready to be paid to me. I know without a shadow of doubt that the NBS Directors at the time took advantage of the Ghavalas method through their good old buddies Alexander Forbes and even more galling, Alexander Forbes is now tasked with dishing out the miserable remains to all the innocent victims. If there was any justice in this world those NBS thieves would be in jail and I would be getting my outstanding 90 cents in the rand.........

Editor's Note
they aren't that toothless, just that the big corporations are just took big to be allowed to fail, thus cannot be prosecuted... (the two 'just' in this sentence, does not mean justice...
 
Submitted by : Mark ADAMS of HEIDELBERG on 2009-09-06 11:23:03
A fabulous example of investigative journalism, well done Noseweek.
 
Submitted by : M McMASTER of BENORYN on 2009-09-01 14:07:57
This reminds me of my experience with these exploitive souls.
Years ago I'd decided to take out an assurance policy for my long-serving receptionist.

I paid into this policy every month.

On her premature death, I asked her Husband how much Sanlam had paid out against this policy.

You won't believe it.

Typed carefully on a fullscap page were details of R8000 having been paid in, and then a copy of their disbursements.

On the page was 'explained' that they were the administrators of the account.

They typed in sums paid as fees to the Master of The Supreme Court, as the Executors.

From the R8000, nil balance.

That sum would have taken care of the sales agent and also Sanlam.
Bang R8000.
 
Submitted by : Kathy Areias of Westville on 2009-08-30 10:51:31
I was a member of the ICL (SA) Pension Fund from 1979. In 1986, a division of ICL(SA) was sold and the affected member's Pension Fund amounts were transferred and became the International Data Services Pension Fund.

In 1991, IDS changed to a Provident Fund administered by the famous Wynne-Jones. The members were told, our Pension Fund would be valued by an actuary, apportioned to each stake holder, and transferred to Old Mutual Protektor Pension Fund in our own name. The pension fund would cease to exist. In fact, only our own contributions plus 2%? interest was transferred in individual names. the rest of the money was split between OM Orion, a Guaranteed Fund and a Multifund. We were unaware of this at the time.

At this time (1991), the surplus was earmarked for IDS not the members, a fact confirmed by the FSB inspector's report. The owner then proceeded to get rid of all the staff and sell off what was left of the branches. As the only member left in the Provident Fund, he thought he would then be entitled to all of the remaining money, about R3M.

The exiting members Provident Fund portions were paid out of the remaining surplus funds, not the Orion Fund. By 1997, he was the only member of the Fund and the only Trustee. The 1991 section 14 transfers had still not been approved by the FSB, who were still awaiting answers to their queries raised with Wynne-Jones.

In 1998, the FSB investigated the Fund and found several irregularities.
By this time, the former owner/trustee had gone back to UK.

Five years later, and after written complaints to the FSB from former members who had realised that all was not well, a second investigation in 2004 resulted in a court order being issued in May 2005, placing the Fund under Liquidation. An amount of R4.9M was transferred from OM Orion to the Liquidator.

I, and another former member have spent over R90K to ensure the Liquidator includes all members from 1986 onwards, and not just those in the Wynne-Jones records which only start in 1991. The surplus was generated by the long service people who came from ICL in 1986. This fact is confirmed in the FSB reports.

Both the Liquidator and FSB agree the transfers in 1991 were illegal, even though the FSB did eventually condone them.

The FSB instructed the Liquidator to do a surplus apportionment prior to liquidation. Of course, after the surplus distribution excercise there is no more cash to liquidate.

After 4 years, two formal objections from many members, advocate's fees, and my personal efforts to have former member information sent to the Actuaries from OM, the Liquidator and his merry men have awarded themselves R3.1M in fees, leaving only R1.7M for the members. The former trustees of the Fund are also getting a piece of the R1.7M. No crime has been committed here you see.

I do take smalll comfort in the fact that I have been able to get some of this money back to people who would otherwise have been ignored, and in doing so, I have diluted the amount the former undeserving trustees will get.

The amounts in this Fund are tiny compared with other cases you have reported. Sadly, it is always the members who lose out in the end, and usually at a time in their lives when they can least afford it.

Except for the comparatively modest amount charged by the Actuaries, the rest of the fees are ridiculous when compared with the size of the Fund. Are there no FSB guidelines on what percentage of the Fund may be plundered with fees? For example, the former member representative, an accountant appointed by the Liquidator, who has no prior knowledge of the Fund or any of the members, and who has persistently failed to communicate with the former members, has claimed R85K for his services, while a senior long service member will get R17K.

At 2005, this fund was all cash, no property to sell, no other assets to recover. What on earth has been done to justify such a large reward? Or is it just greed?

Our repeated requests for up to date financial statements have been ignored. We don't know what investment income has been generated during the period the Liquidator has had the funds. Surely under the Freedom of Information Legislation we have a right to see how our money is being spent? Is it significant that the appointed auditors for the Fund are also the Liquidator's own auditors?

My advice to young people, think about your future needs, provide in the best way you can, watch carefully the money you allocate to use later in your life, keep it under your own control as much as you can, make you own investments, and if there is anything you don't like, ASK. It's too late when you get to retirement age.

The Curators and Liquidators are making big bucks out of these cases and no matter what good changes have been made to the laws of our country, there are creative people out there who will find a way to rip you off sometimes without you realising you have been hit.
 
Submitted by : of Westville on 2009-08-28 17:41:48
I am a finacial advisor who is trying to help clients understand the excessive penalties levied by Momentum on the Sage policies they took over. I have it in writing that they do not know the expense cost from Sage but charge the client an "actuarial charge" regardless, refusing to illustrate how it is made up. They also seem to have lumped RA's and endowments together when bringing the polcies across and applying the allowed endowment penalty on RA section 14 transfers which is illegal.

They are masters at delaying answers for months on end as if they think you will forget you had a problem. They have even shut our legal and compliance team out.

Editor's Note
We shall surely look into this...

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