Manuel+should+hold+on+to+Vuyani+Ngalwana,+Rob+Rose,+B+Day

Business Day, Johannesburg, 23 October 2006
=Manuel should hold on to Vuyani Ngalwana for dear life=


 * Rob Rose**

IF FINANCE Minister Trevor Manuel wants to keep the political capital gained from the new era of “pension democracy” created by Pension Fund Adjudicator Vuyani Ngalwana in the past year, he needs to intervene to prevent Ngalwana quitting his post.

Ngalwana has thrust a sabre into the stodgy soup that remains the incestuous pension fund industry, what with the life assurers and their patsy trustees conniving to disempower and bleed consumers dry.

Last year, Ngalwana’s rulings changed the way the life companies operate, ultimately forcing them to commit to greater transparency at a R3bn cost — a sea change matched only by Adriaan Vlok’s decision to start hanging around Frank Chikane with a bowl of water and some soap.

Last year, Manuel defended Ngalwana, saying he had “full confidence” in him amid heated attacks from the life industry.

Manuel was spot on when he said in October that the attacks on Ngalwana created “the impression that the long-term insurance industry does not concern itself with issues of equity and fairness”.

Now, with not enough funds to allow the adjudicator’s office to deal with myriad complaints, and life companies going to court to get his rulings set aside unopposed, it is no wonder Ngalwana feels his office is being “made a mockery of”.

Old Mutual, in particular, has gone to court to appeal against Ngalwana’s rulings in favour of Belinda Holloway, Rajwantha Mungal and TV Freeman. In each case, Old Mutual warned its clients that if they opposed the matter, it might claim its legal costs from them (causing Holloway to withdraw). Old Mutual also opposed Ngalwana’s application to argue in court to defend his ruling.

Perhaps as a response to being called bullies, Old Mutual wrote to Mungal and Freeman on Friday saying it would “not ask for cost orders” against either in “test cases to determine important legal principles”.

This is a welcome concession by Old Mutual, but it comes as Ngalwana has questioned the bona fides of the life companies’ “commitment to change”.

Last year, there was much fanfare when, in a “settlement” between Ngalwana, the life industry and Manuel, the life companies agreed to pay R3bn to guarantee minimum values for clients who try to cash in retirement annuities early.

But since then, little has changed: the new Pension Fund Act remains wedged within the bureaucracy, and the life assurers haven’t yet paid a cent of the R3bn as this money still sits in their coffers, earning interest.

In a blistering ruling on Friday, Ngalwana said life companies had breached the “spirit” of the “settlement” which, as a voluntary deal, was flawed anyway.

Ngalwana said that despite the “settlement”, companies were refusing to settle disputes with their clients, saying that the costs they levy (up to 35% of an annuity can still be deducted in costs under the settlement) are “within the parameters of the statement of intent”.

Ngalwana’s 56-page ruling seemed to reflect his frustration with a “new deal” that promised so much but which delivered little. Given that Ngalwana is responsible for thrusting some primitive democracy into the life industry, Manuel has much to lose by letting him go


 * From: http://www.businessday.co.za/articles/bottomline.aspx?ID=BD4A299815**

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