Right2Know supports the Unclaimed Benefits Campaign demonstrating at Liberty Group Head Office

Unpaid Benefits Campaign (UBC)

PRESS STATEMENT

17th August 2017

DEMONSTRATION AT LIBERTY GROUP HEAD OFFICE AGAINST ABUSE OF PENSION AND PROVIDENT FUNDS AND VICTIMISATION OF WHISTLE-BLOWERS

The UBC will be holding this demonstration to voice our outrage at the way in which Liberty and other fund administrators (including Alexander Forbes and Momentum), with the assistance of the Financial Services Board (FSB), have abused thousands of pension and provident funds. As a result, thousands, if not millions of workers and their families have been and continue to be, denied the benefits due to them. This has all been exacerbated by the unlawful and reckless cancellations of the registrations of these funds by the registrar of pension funds when some of them still had assets and liabilities.

The Unpaid Benefits Campaign (UBC) is both saddened and outraged that, according to the annual report of the registrar of pension funds for the year ended December 2015 and now more recently updated, pension and provident funds subject to regulation and supervision by the registrar of pension funds were holding unclaimed benefits with an aggregate value of more than R41 billion owed to approximately 4 million people.

This money has been earned by the labour of workers, both local and migrant workers, and they, and the dependents of deceased workers entitled to these monies, should not be allowed to be deprived of what is due to them any longer.

Many excuses are given for why those entitled to these monies cannot be found. However, the truth is that there are people with vested interests in making sure that beneficiaries do not get their money. Large financial institutions have established unclaimed benefit funds to hold benefits that have accrued in pension and provident funds and they derive benefit from these monies by charging fees for the administration of the funds and the investments of their assets.

This is probably why, in 2014, Rosemary Hunter, then the deputy-registrar of pension funds and deputy executive officer of the Financial Services Board (FSB), was victimised when she blew the whistle on unlawful measures adopted by the registrar of pension funds and staff of the FSB in the course of what became known as the Cancellations Project. This ‘project’ entailed the cancellations of the registrations of approximately 4600 pension and provident funds without first properly checking what had happened to their assets and liabilities. In particular, she was vilified, then offered a ‘golden handshake’ of approximately R6 million in return for her resignation from the FSB and, when she refused the offer, she was subjected to disciplinary proceedings which then had to be withdrawn because the case against her was weak.

Hunter’s three-year contract with the FSB expired in July 2016 and was not renewed, probably because, by then, she had launched a court application in which she asked the court to order the FSB to give her reports by Justice O’Regan and KPMG on the results of their investigations into aspects of the Cancellations Project so that she could use the information in those reports to try to fix the problems that she had identified. She also asked the court to order the FSB and/or the Minister of Finance to investigate the conduct of the registrar of pension funds, Dube Tshidi, in relation to both the cancellations project and the campaign to cover it up and the conduct of the board of the FSB in protecting Tshidi against investigation and victimizing Hunter.

During the course of her litigation Hunter was contacted by Michelle Mitchley, an employee of Liberty Corporate, a division of the Liberty Group responsible for the administration of approximately 80% of the funds the registrations of which had been cancelled in the course of the Cancellations Project. Mitchley told Hunter how she had reported improper conduct by Liberty and FSB employees to the FSB in 2011 and had likewise been victimised as a result. When Liberty became aware that this whistle-blower and Hunter were talking, it fired her on trumped-up charges. She is challenging her dismissal in the Labour Court.

WE DEMAND THAT:

• The Liberty Group-

• • offers whistle-blower Michelle Mitchley reinstatement with retrospective effect to the date of her dismissal;

  • publicly apologises to her, ensures that she is not victimised in the future, and compensates her for the hardships that she has had to endure, and;

  • encourages other Liberty employees, regardless of rank, to act with integrity when fulfilling their duties by making a public statement praising her for her courageous conduct in defence of the rights of its customers.

• All pension and provident funds holding unpaid benefits must–

• • stop abdicating responsibility for the payment of those benefits by transferring them to unclaimed benefit funds, and, instead;

  • take all reasonable steps to trace and pay each person entitled to such a benefit, whether it is R500.00 or R500 000.00;

  • stop deducting administration and tracing costs from the benefits paid and, instead, ensure that those benefits are increased by returns earned on the investment of the benefits pending payment; and

  • report to the public on a regular basis on the steps that they have taken to achieve this and the results of their efforts – by, for example, notices published on their websites and on the FSB’s website.

• All banks, insurers and other financial institutions that are holding monies that belong to people with whom they do not have contact must-

• • take all reasonable steps to find and communicate with those people and pay those to whom that money belongs, and;

  • report to the public on a regular basis on the steps that they have taken to achieve this and the results of their efforts.

• Alexander Forbes, Cedar Employee Benefits, Liberty, Momentum, NBC, NMG, Old Mutual, Sanlam and all other financial institutions involved in the Cancellations Project must-

• • publicly account for their conduct in relation to it and what they are doing to fix any problems that they have helped to create.

• The FSB must-

• • immediately publish on its website all reports on all investigations conducted to date into the Cancellations Project, including, but not limited to, the Third Inspection Report by Jonathan Mort into the treatment of unclaimed/unpaid benefits in the course of the Cancellations Project; and

  • investigate the conduct of employees and agents of the FSB and fund administrators involved in the Cancellations Project and the cover-up campaign, publish the results of these investigations and act against all found guilty of misconduct.

• The Minister of Finance must-

• • hold the FSB to account for its failure to protect members of the public as it is supposed to do and for victimizing whistle-blower Rosemary Hunter.

Approximately 80% of the funds cancelled in the course of the Cancellations Project were administered by Liberty. This is why we will call on the Chief Executive Officer of Liberty Holdings Limited, Mr. David Munro, to receive our Memorandum of Demands in person on Friday, 18 August 2017.

Failure on his part to do so will be interpreted by the UBC as disdain and a lack of respect, on the part of both Mr. Munro and Liberty, for the approximately 4 million people to whom pension and provident fund benefits with an aggregate value of more than R41 billion are owed by pension and provident funds administered by financial services providers such as Liberty; and will result in an intensification and escalation of our campaign.

For further information contact:

Moffat Chauke (Cell: 0837445109 or email: chauke.moffat@gmail.com)

Lucas Motloung (Cell: 0839883658 or email: motloungtl52@gmail.com)