Thursday, January 21, 2021

BPOPF faces group action law suit

Scores of pensioners are considering a group action lawsuit against the Botswana Public Officers Pension fund to recover the more than P180 million they lost in the fund’s stormy relationship with African Alliance.

The Sunday Standard can reveal that a number of pensioners are mobilizing critical mass to launch a group action law suit against BPOPF following findings of an investigation that they lost more than P200 million in what is believed to be the fund’s negligence.
Jacques Malan Consultants and Actuaries, who were last year commissioned to investigate the goings on at BPOPF, concluded that pensioners lost at least P200 million as a result of trustees’ questionable decisions against African Alliance.

The consultants were “asked to quantify the investment losses as a result of the actions taken by the trustees. This is not possible other than to refer to the loss previously mentioned of between P100 and P180 million on the Mascom debacle. The other matters are lost investment opportunities (such as when AA was prevented from trading) and these can not be determined with any degree of certainty.”

It also emerged in the report that government may consider joining the group action law suit or even pulling out of BPOPF.

The consultants observe in their report that “if the trustees cannot show that they applied their minds and acted in the best interests of the Fund, then it could be conceived to be negligence and any member or even the employer (government) could sue the trustees and they could be held personally responsible for the loss. Negligence by even one of the trustees would mean that all the trustees could be held responsible.”

At the time of going to press, The Sunday Standard had not established if the government would also join the law suit against BPOPF. What, however, has emerged is that the relationship between government and BPOPF has broken down and consultants are even talking of the possibility of the government pulling out of the fund.

It also emerged that the BPOPF had changed some of the rules without the approval of the employer (government) whereas the rules state that all amendments that affect the financial position of the fund need to be approved by the employer. Since this was a major oversight and probably indicates a total lack of respect for the role of the employer, the position of the Chairman at the time such amendments were made should be reconsidered by the Trustees and the Employer.”

“The trustees have effectively disempowered the employer by unilaterally amending the rules and ignoring requests for information. The unhappiness was evident in a meeting between the employer and the Trustees late in 2006. The employer has a number of decision making functions in terms of the original rules and this must be respected by the trustees. Clearly, the employer may even decide to stop contributing to the fund, so the goodwill between the employer and the trustees is of paramount importance so as to run an efficient fund in the interest of all the members and pensioners.

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