The Need to Adopt Preventative Measures to Combat the Misappropriation of Retirement Fund Assets




Misappropriation, preventative measures, Retirement Funds Assets, trustees, corporate governance


This paper discusses the challenge of the misappropriation of retirement fund assets by trustees, fund asset managers and retirement funds’ administrators. It demonstrates that retirement fund members lose substantial retirement benefits due to the illegal and unlawful conduct of those who manage and administer retirement funds. It evaluates whether the South African legislative framework offers retirement funds and their members adequate protection from activities that may compromise the delivery of the pension promise such as: mismanagement; fraudulent activities; gross negligence; and the outright looting of retirement fund assets. In particular, this paper illustrates that the law in South Africa does not deter would-be wrongdoers from acting in a manner that may compromise the benefits expected by retirement fund members when they exit their funds. It advocates the adoption of adequate preventative legislative measures that would make it difficult for anyone to act in a manner that would compromise retirement fund members' benefits in South Africa.




Download data is not yet available.


Metrics Loading ...




Clark GL "Pension Fund Governance: Expertise and Organisational Form" 2004 JPEF 233-254

Clark G and Urwin R "Best-practice Pension Fund Governance" 2008 J Asset Manag 2-21

Coggburn JD and Reddick CG "Public Pension Management: Issues and Trends" 2007 Int J Publ Admin 995-1020

Damant G and Jithoo T "The Pension Promise: Pension Benefits and the Employment Contract" 2003 ILJ 1-22

Hunter R "The Legal Framework within which the Investment of Retirement Fund Assets Takes Place" Unpublished paper presented at the Annual Conference of the Pension Lawyers Association (16-18 March 2008 Somerset West)

Institute of Directors in South Africa King IV: Report on Corporate Governance for South Africa (IoDSA Sandton 2016)

International Organisation of Pension Supervisors Supervisory Oversight of Pension Fund Governance (IOPS Paris 2008)

Kilian CA "Practical Explanation of Ethics as a Good Corporate Governance Principle in South Africa and New Zealand – A Case Study" 2020 Koers — Bulletin for Christian Scholarship 1-10

Marumoagae C "Do Boards of Trustees of South African Retirement Funds Owe Fiduciary Duties to Both the Funds and Fund Members? The Debate Continues" 2012 PELJ 554-569

Marumoagae "The Need for Effective Management of Pension Fund Schemes in South Africa in Order to Protect Members" 2016 THRHR 614-630

Marumoagae MC "Liability to Pay Retirement Benefits when Contributions were not Paid to the Retirement Fund" 2017 PELJ 1-40

Masondo S "At Least R255m in Mine Workers' Cash Lost in Pension Scam" City Press (30 April 2017) 1

National Treasury A Safer Financial Sector to Serve South Africa Better (National Treasury Pretoria 2011)

Rusconi R South Africa's Mandatory Defined Contribution Retirement Savings System (Department of Social Development Retirement Project Pretoria 2007)

Swanepoel P "Criminal Procedure" 2003 SACJ 197-211

Yermo J and Steward F Pension Fund Governance: Challenges and Potential Solutions (OECD Publishing Paris 2008)

Case law

Brown v Financial Service Board 2013 ZAWCHC 142 (20 September 2013)

Campbell v Johannesburg Municipal Pension Fund 2001 6 BPLR 2055 (PFA)

Electrical Contractors' Association (SA) v Fedsure Group Staff Pension Fund Scheme 2013 JOL 30023 (PFA)

Gihwala v Brown 2007 JOL 20078 (C)

Living Hands (Pty) Ltd v Ditz 2013 2 SA 368 (GSJ)

RFS Administrators v National Fund for Municipal Workers (NFMW) 2017 ZAPGPHC 255 (1 June 2017)

S v Brown 2013 ZAWCHC 211 (15 May 2013)

S v Brown 2015 1 SACR 211 (SCA)

Simon v NMG Umbrella Smartfund (Provident Section) 2019 1 BPLR 283 (PFA)

Transport Sector Retirement Fund v Bophelo Beneficiary Fund 2020 ZAGPPHC 529 (31 August 2020)


Financial Advisory and Intermediary Services Act 37 of 2002

Financial Sector Regulation Act 9 of 2017

Government Employees Pension Law Proc 21 of 1996

Income Tax Act 58 of 1962

Military Pensions Act 84 of 1976

Pension Funds Act 24 of 1956

Post and Telecommunication-related Matters Act 44 of 1958

Prevention and Combating of Corruption Act 12 of 2004

Protected Disclosures Act 26 of 2000

Transnet Pension Fund Act 62 of 1990

Government publications

GN R98 in GG 162 of 26 January 1962

GN 760 in GG 43514 of 10 July 2020 (Conduct Standard 4 of 2020: Minimum Skills and Training Requirements for Board Members of Pension Funds)

Occupational Pension Schemes (Investment and Disclosure) (Amendment) Regulations, 2019 (United Kingdom)

Proc 30 in GG 41979 of 17 October 2018

Internet sources

Budlender G 2018 Report to the Board of the Public Investment Corporation on Allegations Contained in Anonymous Emails Distributed to the PIC Email Address List in September 2017 accessed 22 April 2021

Cameron B 2011 'Shoddy' Admin may Cost Fund Members accessed 22 April 2021

Cameron B 2013 The Greedy Feed Well off your Billions accessed 22 April 2021

Cotterill J 2019 ANC Accused of Pressuring Public Pension Fund for Money accessed 22 April 2021

Davis D 2018 Millions of Rands Reportedly Stolen from the Municipal Councillors' Pension Fund accessed 22 April 2021

Financial Services Board 2007 Circular PF No 130: Principles of Good Governance of Retirement Funds

Frameworks/Temp/PF%20Circular%20130.pdf accessed 22 April 2021

FSCA Date Unknown


Financial Sector Conduct Authority 2020 Statement Supporting the Draft Conduct Standard – Minimum Skills and Training Requirements for Board Members of Pension Funds

Frameworks/Pages/Retirement-Funds.aspx accessed 22 April 2021

Government Employees Pension Fund 2021 Who is GEPF? accessed 22 April 2021

Hogg A 2014 Justice for J Arthur Brown: Revisiting Feb 2007 Story that Broke News of Fidentia Scandal

undictated/2014/12/02/justice-for-j-arthur-brown-revisiting-feb-2007-story-breaking-news-of-fidentia-scandal accessed 22 April 2021


/Municipal%20Councillors%20Pension%20Fund%2018th%20Curator's%20Report%20Dated%2030%20September%202020.pdf accessed 22 April 2021

Mpati L 2020 Report of the Judicial Commission of Inquiry into Allegations of Impropriety at the Public Investment Corporation accessed 22 April 2021

Nombembe P 2011 'Stolen' Pensions Used to Buy Property, Car accessed 22 April 2021

Organisation for Economic Co-operation and Development 2009 Guidelines for Pension Fund Governance accessed 22 April 2021

Office of the Pension Funds Adjudicator 2017 Annual Report 2016-2017 accessed 22 April 2021

Public Investment Corporation 2019 Integrated Annual Report accessed 22 April 2021

Registrar of Pension Funds 2018 Annual Report 2017 accessed 22 April 2021

Rutherford T 2007 Who is Choosing your Pension Fund Auditors accessed 22 April 2021

South African Local Government Association 2018 Update on Developments in the Municipal Councillors Pension Fund accessed 22 April 2021

Sidimba L and Sifile L 2018 Hawks Prove Massive Theft from Municipal Workers' Pension Fund accessed 22 April 2021

Staff Reporter 2017 At Least R255m in Mine Workers' Cash Lost in Amplats Pension Scam accessed 22 April 2021



How to Cite

Marumoagae, M. C. . (2021). The Need to Adopt Preventative Measures to Combat the Misappropriation of Retirement Fund Assets. Potchefstroom Electronic Law Journal, 24, 1–35.



Special Edition: Corporate and Financial Markets 2021

Similar Articles

1 2 3 4 5 6 7 8 9 10 > >> 

You may also start an advanced similarity search for this article.