1 of 2019
DEATH BENEFITS
Providing beneficiaries with details of payments to other beneficiaries.
IP Dimpe (“Complainant”) v Tshwane Municipal Provident Fund (“Fund”) and ACA Employee Benefits (“Administrator”)
The Complainant is the stepfather of the deceased. On the death of the deceased the Complainant was allocated a portion of the death benefit but was dissatisfied with the allocation that was made to him. The Complainant requested that he be provided with the details of how the benefit was calculated and allocated to the other beneficiaries.
The Fund submitted that it was not aware of the Complainant’s request for the information pertaining to the payment of the entire benefit. It further provided that due to the Protection of Personal Information Act (POPI) it usually only advises beneficiaries of the details pertaining to their portion of the distribution and not the entire benefit.
The Complainant was not financially dependent on the deceased, however, he was allocated a portion of the benefit as he was a nominee.
The Adjudicator was satisfied that the benefit was allocated in accordance with the rules of the Fund and the provisions of section 37C of the Pension Funds Act.
Insofar as the complaint relating to the request for information regarding the death benefit, the Adjudicator cautioned the Fund that it should desist from failing to provide beneficiaries with the basic information in relation to the payment of a death benefit.
The Adjudicator stated that even though it is important to observe and apply the provisions of protection of personal information, this oversight function should not be used in a manner that undermines beneficiaries’ rights to be provided with necessary and adequate information. In this instance, how the benefit was calculated and allocated.
The Fund had subsequently provided the Complainant with the information that he had sought and as such the complaint was dismissed.
The Adjudicator determined that failure by funds to provide the beneficiaries with basic information in relation to the payment of death benefits is inconsistent with the provisions of Circular PF 90.
Nominees must be considered
Damoense (“Complainant”) v Absa Pension Fund (“Fund”) and Absa Consultants and Actuaries (“Administrator”)
The Complainant is the deceased member’s former life partner. On the death of the deceased the board resolved to allocate the entire benefit to the deceased’s mother to the Complainant’s exclusion even though she was nominated in the deceased’s nomination of beneficiary form.
The Complainant submitted that the board failed to consider that the deceased’s mother received an old age grant which satisfied all her maintenance needs and that the deceased’s siblings also contributed their part towards the mother’s general maintenance.
The Complainant further submitted that the board did not consider her personal circumstances, did not consider her extent of her dependency on the deceased and the fact that she was nominated to receive 50% of the death benefit. She stated that the board based their decision to allocate to the deceased’s mother and to exclude her on the assumption that the deceased’s mother was the deceased’s future financial dependent without providing proof.
The Fund established that the deceased’s mother was factually dependent on the deceased for maintenance and she was nominated to receive 50% of the death benefit. They further found that there was no relationship between the deceased and the Complainant at the time of the death of the deceased.
The Fund further submitted that the Complainant was employed, younger and was fully able to generate income through her employment. Even though she was a nominee, she was not financially dependent on the deceased.
The Adjudicator held that the board should have considered the Complainant on the basis that she was a nominee. The Complainant did not have to prove that she was financially dependent on the deceased for her to be considered, the mere status of being a nominee compelled the Fund to consider her situation together with the other relevant factors. Even though the deceased was separated from the Complainant he did not remove her from his nomination form. The Adjudicator therefore ordered the Fund the re-exercise its discretion.
The status of being a nominee compels a fund to consider a beneficiary for an allocation.
WITHHOLDING OF A BENEFIT
Withholding a benefit should be limited to the claim amount
E Behrens (“Complainant”) v Motor Industry Provident Fund (“Fund”) and Whitehouse Motors (Pty) Ltd T/A Honda Auto Menlyn (“Employer”)
The Complainant terminated her employment and her complaint concerns the withholding of her withdrawal benefit in terms of section 37D of the Pension Funds Act for alleged fraud.
The Employer launched an investigation and found that the Complainant’s conduct was dishonest and fraudulent and as a result it had suffered a financial loss of R483 048.42. As a result the Employer requested the Fund to withhold the Complainant’s withdrawal benefit.
The Adjudicator held that it is unreasonable for the Fund to withhold the Complainant’s entire withdrawal benefit (which was more than the loss that the Employer allegedly suffered) while it institutes legal proceedings and it is also against the Fund’s rules. The Fund is only allowed to withhold an amount of R483 048.42 of the Complainant’s withdrawal benefit pending the conclusion of the civil case against her. The Adjudicator ordered the Fund to pay the Complainant her withdrawal benefit less R483 048.42 plus 10.5% interest per annum less any allowable deductions.
Funds are cautioned against withholding more than what the Employer is claiming as this could result in the Adjudicator ordering the release of the benefit plus interest, which could exceed the fund return that the member earns in the Fund.
Funds should not withhold more than what the employer is claiming, withholding more than is claimed is unreasonable.
A criminal charge does not automatically warrant a withholding
JAE de Beer (“Complainant”) v ILIAD Provident Fund (“Fund”); Alexander Forbes Financial Services (Pty) Ltd (“Administrator”) and Steinhoff Doors and Building Materials (Pty) Ltd T/A Steinbuild (“Employer”)
The Complainant is dissatisfied with the withholding of his withdrawal benefit.
The Employer opened a criminal case against the Complainant for authorising the supply of building supplies in contravention of its policies.
The Complainant submitted that there is no basis on which the Employer will succeed in proving any fraud or theft against him as he did not wilfully deceive the Employer. Furthermore, he did not derive any benefit from the supply of goods to the customer. He submitted that the Employer has instituted legal action against the customer to recover the outstanding debt.
The Fund submitted that a criminal case was opened with the SAPS and an investigation was being conducted by the Hawks due to the value of the alleged theft and fraud being R654 000.
The Adjudicator held that the Employer cannot recover the debt from both the Complainant and the customer. The Employer has already instituted civil litigation against the customer to recover the debt. The Adjudicator further held that even though the rules of the Fund allow for the withholding of a member’s benefit in cases where there is a pending criminal case for the recovery of the loss, such discretion must be exercised properly.
The Adjudicator ruled that even though there is a criminal case being investigated, it does not automatically authorise the Fund to withhold the Complainant’s benefit. She found that the Fund had failed to consider all the facts of the matter. Had the Fund investigated further it would have found that the Employer has already taken steps to recover its loss by instituting civil litigation against the customer. Therefore she found the withholding to be unreasonable.
The Adjudicator dismissed the complaint and ordered the Fund to pay the outstanding benefit plus interest of 10.5% per annum to the Complainant.
Funds are cautioned against merely withholding member’s benefits at the request of the employer. Lodging a criminal charge against a member does not automatically authorise a fund to withhold a member’s benefit.
WITHDRAWAL CLAIM FORMS
Funds are cautioned against merely withholding member’s benefits at the request of the employer. Lodging a criminal charge against a member does not automatically authorise a fund to withhold a member’s benefit.
Withdrawal claim forms should be properly completed
AJ van Zyl (“Complainant”) v Alexander Forbes Core Plan (Provident Section) (“Fund”); Alexander Forbes Life (Pty) Ltd (“Administrator”) and Rheinmetall Laingsdale (Pty) Ltd (“Employer”)
The Complainant is dissatisfied with the Fund’s failure to honour his request to transfer his withdrawal benefit to another fund, which omission has resulted in a loss to the Complainant.
On termination of the Complainant’s employment he completed a withdrawal claim form, choosing the cash pay-out option. The Complainant later submitted another withdrawal claim form wherein he requested the Fund not to pay out the benefit in cash but to transfer it to another fund. The Complainant submitted that the Fund ignored his second request, resulting in a negative tax position and therefore he suffered a loss.
A fund cannot be faulted for failure to adhere to an amended withdrawal claim if the form was not properly completed and invalid.
The Fund submitted that it did not give effect to the second instruction as it assumed that the second claim form was a duplicate of the first claim form, because it was not stamped and signed by the authorised signatory. In order to rectify the situation it will need to submit a recall request to the Complainant’s bank so it can transfer the benefit. The Fund called the Complainant on several occasions and apologised for the misunderstanding. The Complainant confirmed that he has already invested the benefit and subsequently complained to the Adjudicator.
The Adjudicator ruled that the Fund has a duty to act with due care and diligence and in the best interest of the Complainant. However, the Fund cannot be faulted for failure to adhere to the Complainant’s amended withdrawal claim as the form was not properly completed and invalid. The Fund cannot be blamed for paying the Complainant’s withdrawal benefit in accordance with the rules of the Fund. Furthermore, the Complainant had already invested the benefit and the transfer of the benefit would not be possible.
As a result the Fund’s conduct of paying the Complainant’s benefit in terms of the first withdrawal claim form is not negligent nor is it wrong and the complaint was dismissed.