Almost 800 trustees face action over failure to complete mandatory training.
South Africa’s retirement fund trustees are under mounting pressure, with the Financial Sector Conduct Authority (FSCA) and Pension Funds Adjudicator warning that failure to complete training and honour fiduciary duties will not be tolerated.
At the recent Institute of Retirement Funds Africa (Irfa) conference in Cape Town, the FSCA and the Pension Funds Adjudicator, which oversees complaints from retirement fund members, presented industry statistics, emerging trends, and new enforcement measures – not only for trustees but also for pension fund administrators and employers.
Zareena Camroodien, head of fund governance and trustee conduct at the FSCA, said the regulator is concerned by the significant number of trustees who have yet to complete their compulsory training, which must be done within six months of appointment.
She said nearly 20% of trustees in active funds are non-compliant. The FSCA has identified 1 252 non-compliant trustees. Just over 450 of these applied for exemption and/or an extension, but the FSCA will soon take action against the remaining 798.
ALSO READ: Adjudicator reports Local Authorities Pension Fund for misconduct
Arrear contributions
Both Camroodien and deputy pension funds adjudicator Naheem Essop reiterated their concerns about employers who do not pay employees’ retirement contributions over to the fund.
In January, more than R5 billion in contributions were outstanding, with an estimated 7 700 employers behind on payments to members’ retirement funds. Essop said it is the fiduciary duty of trustees to enforce the collection of retirement fund contributions from employers.
A total of 82% of the adjudicator’s 10 331 complaints received during the 2025 financial year, related to non-payment of withdrawals or delayed withdrawals – often as a consequence of arrear contributions.
Essop warned that trustees will be held accountable from now on, especially in cases where companies cease to exist, leaving retirement fund members without their contributions.
Camroodien stressed that under the Conduct of Financial Institutions (Cofi) Bill, expected to be promulgated in 2026, employers will fall under the remit of the FSCA, over and above administrators and trustees.
In addition, the Government Employees Pension Fund (GEPF), with nearly R3 trillion in assets under management, will also fall under the FSCA, which will allow for closer supervision of governance and data integrity.
Another matter that the FSCA will closely monitor is retirement fund expenses, Camroodien said. “There will be a greater focus on administrative and investment expenses which have a negative impact on outcomes for retirement fund members.”
ALSO READ: FSCA lists 2 330 employers with pension fund contributions in arrears
Fund consolidation
The new regulatory landscape comes amid an environment of increased fund consolidation.
Camroodien said the number of active retirement funds dropped from 1 329 in January to 858 by August 2025, as hundreds of funds applied for cancellation.
She stressed that this does not mean there are fewer retirement fund members. “It signals that consolidation is happening in our [retirement] space.”
Michelle Acton, executive of retirement reform at Old Mutual, said in a presentation on industry trends at the conference that the “path of consolidation” in South Africa’s retirement fund industry over the past year has been positive, but emphasised that more work still needs to be done.
ALSO READ: FSCA fines funeral home R11.4 million and debars owners for decades
Lessons from Australia
She highlighted how Australia’s retirement fund industry has undergone significant consolidation.
The consolidation was driven by the introduction of a “scale test” to determine whether a fund was large enough to run effectively, along with a performance test.
“Every fund is required to submit and publish a performance statement showing the net benefit to members. If a fund fails, it must inform all members directly,” Acton noted.
When the system was first introduced, there were around 4 000 funds. Today, that number has been reduced to fewer than 80.
These measures created a level of transparency “second to none” in terms of investments, costs, and expenses, she added.
Another key reform in Australia was the professionalisation of trustees, which transformed what was once a voluntary role into a full-time job.
Australia also implemented legislation for automatic enrolment in retirement savings, with employers who do not contribute facing heavy fines.
This article was republished from Moneyweb. Read the original here.
