A SENIOR Financial Services Board (FSB) employee is taking the regulator to court over alleged irregularities concerning the cancellation of the registration of thousands of retirement funds worth billions of rand.

It is feared the cancellations were irregular and may have deprived beneficiaries of benefits.

The FSB is expected to oppose Rosemary Hunter’s application.

Ms Hunter is a pension law expert who has worked as the FSB’s deputy registrar of pension funds since 2013. Her contract expires at the end of July.

She alleges in her affidavit that there were efforts to remove her from the job, including offering her a golden handshake worth about R6m. She alleges that some people, including FSB executive officer Dube Tshidi, wanted her out of the FSB to prevent her investigation into the irregularities concerning the registration cancellations.

According to Ms Hunter’s court papers, the cancellations project was initiated by the Registrar of Pension Funds to procure the cancellations of the registration of about 4,500 pension funds that did not have boards of trustees.

This would have emanated from a situation in which a board of trustees left stand-alone funds that members then moved to umbrella funds. Sometimes it is expensive to run stand-alone funds, while umbrella funds are seen as being efficient.

Ms Hunter wants the High Court in Pretoria to compel the FSB to investigate how cancellations were made. Added to that, she wants the court to order the FSB to make available copies of some reports in relation to the pension funds cancellation project.

One of the reports was produced in 2014 by Justice Kate O’Regan, another by financial advisory firm KPMG in July last year.

The KPMG investigation was reportedly conducted on the recommendation of Judge O’Regan.

The investigation was aimed at probing circumstances in which the registrations of a sample of about 520 funds out of 4,500 were cancelled at the request of representatives and trustees in the period from January 2007 to December 2013.

Ms Hunter says in her affidavit that she fears that it is “probable” that the members and beneficiaries of a number of funds that were deregistered in the course of the cancellations project may have been unlawfully deprived of benefits.

She argues that from 2007-13 Mr Tshidi, the Registrar of Pension Funds, encouraged administrators of funds without boards to procure the cancellation of the registrations of these funds.

She states that some investigations presented to her had found that assets of the funds whose registration had been cancelled in this period (January 2012 to September 2013) with an aggregate value of about R3.4bn had not been properly accounted for in the records of the FSB before their registrations had been cancelled.

Ms Hunter wants the court to order the FSB to commission an independent investigation to probe a number of allegations against Mr Tshidi. The FSB said yesterday the funds had been deregistered between 2007 and 2013, following extensive consultation with the retirement industry. All assets found in the funds were transferred to unclaimed benefit funds, where they could still be claimed by their rightful owners.

The total of unclaimed benefit funds sitting with money managers is about R20bn.

The FSB said the R20bn included the cancelled funds.

The board said its investigations into Ms Hunter’s claims were not complete, but a preliminary report from Justice O’Regan was available to all parties concerned, including Ms Hunter. But she had to sign a confidentiality agreement, as required by section 22 of the FSB Act to access it.

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