The worst performing pension fund was named by the Pension Fund Adjudicator in Johannesburg on Monday.

Mamodupi Mohlala identified the Private Security Sector Provident fund, administered by NBC, as the worst overall performing pension fund.

"There is a clear indication that the funds are failing to meet the standard required of them," Mohlala said, noting that only two funds performed well in the assessment.

The best overall performing fund was the Lifestyle Retirement Annuity Fund, and the second best was the Professional Provident Society Retirement Annuity Fund.

Mohlala said these were the only two funds which obtained the 70 percent rating, deeming them acceptable by the office of the adjudicator.

The adjudicator deals with complaints regarding private sector pension funds.

Staggering number of complaints

"All the others failed to meet the pass mark of 70 percent," she said.

The need for the scorecard arose as the adjudicator's office received a staggering number of complaints regarding pension fund pay-outs.

At least 390 pension funds were assessed for the period from September 2008 to September 2009.

Of these 390 funds, the office had received one complaint each for about 207 of them.

It had received 345 complaints on the Private Security Sector Provident fund, and 157 complaints about the Central Retirement Annuity Fund.

Mohlala said the need for a scorecard was highlighted with the introduction of President Jacob Zuma's complaints hotline earlier this month.

"The first call that was taken by the president himself was a complaint about access to pension contributions... This points to the need for the scorecard," she said.

Levies paid by pension funds

The scorecard also showed it was necessary to revise the levies paid by pension funds toward the functioning of the adjudicator's office.

Pension funds had to pay R2.91 to the adjudicator for every member they had. This contributed toward the running of the office tasked with settling complaints.

Mohlala said some pension funds which made large contributions to the adjudicator's office received very few complaints while those contributing a lot less were constantly being complained about.

"We will make a submission to the Financial Services Board to request that contributions in relation to levies be revised.

"If we do not, we will be perpetuating a situation whereby funds who are not performing will be subsidised by those who are doing what is expected of them," she said.

The scorecard ratings that pensions funds received would be referred to the Financial Services Board (FSB).

Assess corporate governance

"Going forward, we will refer the ratings to the Financial Services Board for them to assess the corporate governance... and possibly the licensing of those funds.

"It is the prerogative of the FSB on the licensing of the worse performing funds," Mohlala said.

The adjudicator's office held workshops in September last year to explain how the ratings and requirements for the funds would be assessed for the scorecard.

She said it was clear that some funds went back to align their systems with these requirements and she urged others to do the same.

"It is very unfortunate that not all funds did that," Mohlala said.

She extended an open invitation to pension funds to sit down with her office to ensure that they improve their performance and the services provided to their clients.

The scorecard was independently audited.

A total of 8275 complaints had been dealt with by the adjudicator's office in the 2008/09 financial year, however, backlogs remained a problem. The economic downturn has also impacted on the number of complaints received.