THE FINANCIAL SERVICES TRIBUNAL

CASE NO.: A33/2020

POST OFFICE PROVIDENT FUND	APPLICANT

and

FINANCIAL SECTOR CONDUCT AUTHORITY	RESPONDENT

Application for reconsideration of administrative penalty imposed for late submission of actuarial report

DECISION

[1]	The applicant, the Post Office Provident Fund, applies for the reconsideration of an administrative penalty imposed on it. The application is under sec 230 of the Financial Sector Regulation Act, 2017. The parties have waived their rights to a formal hearing.

[2]	Sec 37(2) of the Pension Funds Act, 1956 states that

The registrar may impose an administrative penalty in the case of any failure by a pension fund, administrator or third party to submit to the registrar or any other person within a period specified in terms of this Act or in a directive or condition imposed by the registrar in terms of the Act, any scheme, statement, report, return or other document or information required in terms of this Act to be submitted, not exceeding R1 000 or such other amount prescribed by the registrar for every day during which the failure continues.

[3]	The amount prescribed is currently R4 000.00 per day.

[4]	Section 16(1) of the PF Act provides that A registered fund shall, once at least in every three years, cause its financial condition to be investigated and reported upon by a valuator, and shall deposit a copy of such a report with the registrar, and shall send a copy of such report or a summary thereof, prepared by the valuator in a form prescribed and signed by the valuator, to every employer participating in the fund.

[5]	It is common cause that the Fund was required to submit a return on 1 March 2019 in respect of the period ending 1 March 2018. It instead filed the return on 30 August 2019, 182 days late.

[6]	After following the prescribed procedures and having considered the Fund’s submissions in extenuation, the FSCA imposed a penalty of R500 per day, i.e., R68 250.

[7]	The extenuating circumstances which were submitted to the FSCA are the same as those on which the applicant relies before this Tribunal. They are that (a) the Fund is a terminating fund and is in the process of being wound up; (b) the Fund has a complex and unique nature; and (c) the Trustees did not believe that it would be practical to submit the 2018 actuarial valuation report until the 2015 actuarial valuation report had been approved by the FSCA.

[8]	This Tribunal has adopted the following approach in reconsidering administrative penalties namely that the ordinary rule is that a higher body is not entitled to interfere with the exercise by a lower body of its discretion unless it: failed to bring an unbiased judgment to bear on the issue, did not act for substantial reasons; exercised its discretion capriciously; or exercised its discretion upon a wrong principle.

[9]	The applicant did not cross the threshold. The timeous submission of returns fulfils a public function, and the timing of filing is not a matter of convenience but of statutory duty. As the FSCA pointed out, if the applicant required an extension of time to file the return it could have asked, – which it did not do.

[10]	The application is dismissed.

Signed on behalf of the Tribunal on 30 November 2020

LTC Harms (deputy chair)