Old Mutual was sued by the pension fund curator for R65
million of pension fund money which, it was claimed, had been
wrongfully paid out to an American company, CAF, (later to
become AMK Technologies), which was owned by the
employers of two of the fund’s members. It is alleged that
CAF/AMK’s owners used this money to finance their
companies, which subsequently went into liquidation.

Cape Town High court Judge Blignaut ruled that Old Mutual
had breached the Pensions fund Act and the Financial
Institutions Act by paying this money into CAF/AMK’s
account. But, he said, Old Mutual had not caused, and was
not liable for, CAF-AMK’s losses and had not committed
any breach of contract. In effect he gave them a rap across
the knuckles then let them off the hook. This was despite a
clear betrayal of trust between the company and the pension
fund members and the theft of their money.

COSATU is concerned that this case set a very bad
precedent and the Appeal Court must reverse it. Otherwise,
this will give all employers, fund administrators and other
service providers in the retirement fund industry a green light
to spend workers’ pension funds without any concern for the
employees’ and pensioners’ interests. Workers and
pensioners will have no control over where their money is
invested and will be left uncertain as to how much pension
they can expect to receive.

COSATU reaffirms its demand for the government to legislate
to make clear that pension funds belong to their members and
that any decisions on how they are invested must be taken by
the Boards of Trustees, as stated in the Pensions Funds Act.

COSATU calls on all its members whose pension funds are
administered by Old Mutual to be vigilant and check if their
assets and money are being properly managed.

For further information, please phone Jan Mahlangu,
COSATU Pension Fund Policy Coordinator, on 011 339
4911

Siphiwe Mgcina
COSATU Spokesperson

[email protected]
082-821-7456
339-4911

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Visit the COSATU web site at http://www.cosatu.org.za/press/latest.html for copies of our most recent press statements. For the full archive go to: http://www.cosatu.org.za/press/archive.html.

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COSATU takes steps to ensure that any attachments are free from viruses. You should, however, carry out your own virus check before opening any attachment. COSATU accepts no liability for loss or damage caused by software viruses.