40 retirement fund administrators under a cloud

Between 20 and 30 pension fund administrators admitted to pooling fund assets to earn higher interest rates and incorrectly retained the extra benefits, said Dube Tshidi, the board\'s deputy executive officer, according to Business Report. ‘We are going to call them in one by one’ and ensure they pay pension fund members all income due to them, he told the committee. As many as 10 other large administrators that failed to respond to questions about whether they are involved in the practice, known as ‘bulking’, will face ‘a full-blown investigation,’ Tshidi said. Alexander Forbes, SA’s largest independent retirement fund administrator, has already admitted to cheating customers of profits made by pooling bank accounts. It has offered to pay them R380m in compensation and has set aside an additional R100m to cover claims. The company failed to share the benefits of bulking bank accounts with 1 700 pension fund clients between 1996 and 2004. While bulking is legal, administrators who retain the extra interest are acting in bad faith and putting their interests before that of their clients, Tshidi said. Full report in Business Report