Greed will get you nowhere with Pen­sion Funds Ad­ju­di­ca­tor

Weekend Argus (Saturday Edition) - - FRONT PAGE - MARTIN HESSE

THE Pen­sion Funds Ad­ju­di­ca­tor is sup­port­ive of re­tire­ment fund mem­bers or their ben­e­fi­cia­ries who have been treated un­fairly, but you will get short shrift from the ad­ju­di­ca­tor if, for no good rea­son, you want more than you re­ceived from a re­tire­ment ben­e­fit dis­tri­bu­tion – at the ex­pense of other ben­e­fi­cia­ries.

A com­plainant who wanted more than the amount she had been al­lo­cated has been de­scribed by the ad­ju­di­ca­tor, Mu­vhango Lukhaimane, as “greedy”.

Ms D of Musina brought a com­plaint against the PSQ Wealth Re­tire­ment An­nu­ity Fund and PSQ Life fol­low­ing the dis­tri­bu­tion of a death ben­e­fit af­ter the death of Ms D’s life part­ner, Mr N, who was a mem­ber of the fund.

Mr N died in April 2015 and was sur­vived by Ms D, and well as four bi­o­log­i­cal chil­dren and Mr N’s mother.

A death ben­e­fit of R1 653 640 be­came avail­able for dis­tri­bu­tion. The PSQ Wealth Re­tire­ment An­nu­ity Fund al­lo­cated the ben­e­fit to ben­e­fi­cia­ries so that Ms D re­ceived 80% of the ben­e­fit, two of the four chil­dren re­ceived 5% each, and Mr N’s mother re­ceived 10%.

Ms D was un­happy with the al­lo­ca­tion of the death ben­e­fit, ask­ing that the en­tire ben­e­fit be al­lo­cated to her.

She com­plained that Mr N had also been a mem­ber of the Dis­cov­ery Re­tire­ment An­nu­ity Fund, and that Mr N’s mother had re­ceived R625 632 from that fund.

She sub­mit­ted that it should be taken into con­sid­er­a­tion that she was 57 years old and was near­ing re­tire­ment. She said her de­ceased part­ner’s mother had six chil­dren who still sup­ported her in var­i­ous ways. She also ar­gued that the chil­dren who had re­ceived a por­tion of the ben­e­fit were young and em­ployed.

When al­lo­cat­ing death ben­e­fits, re­tire­ment funds typ­i­cally take into ac­count the al­lo­ca­tion of ben­e­fits from other funds in the de­ceased’s name, to en­sure an equitable dis­tri­bu­tion.

When ques­tioned by the ad­ju­di­ca­tor, the PSQ Wealth Re­tire­ment An­nu­ity Fund sub­mit­ted that, in al­lo­cat­ing 80% of the death ben­e­fit to Ms D, it took note of her age and life part­ner­ship of many years with the de­ceased. It also took into ac­count the al­lo­ca­tion of 69% of R3 083 838 from the Dis­cov­ery Re­tire­ment An­nu­ity Fund to Ms D, and noted that Ms D was em­ployed and had re­ceived var­i­ous other ben­e­fits from the es­tate of the de­ceased.

In her de­ter­mi­na­tion, Lukhaimane noted that Ms D had not men­tioned in her com­plaint the sub­stan­tial amount (R2 127 848) she had re­ceived from the Dis­cov­ery fund. “Thus, it is clear that, in re­spect of the cur­rent and fu­ture earn­ing ca­pac­ity, the com­plainant is in a far bet­ter po­si­tion than [the other ben­e­fi­cia­ries].

“This tri­bunal strongly con­demns the con­duct of Ms D, as it demon­strates the greed of some de­pen­dants,” Lukhaimane said, adding she was sat­is­fied that the death ben­e­fit had been al­lo­cated prop­erly to the de­pen­dants.

She dis­missed the com­plaint.

TARDY CON­DUCT

In an­other case, the ad­ju­di­ca­tor has again hit out at re­tire­ment funds that cite the pre­scrip­tion of debt as a rea­son for not pay­ing ben­e­fits, and says the in­crease in un­claimed ben­e­fits can partly be blamed on funds that lack the ex­per­tise to iden­tify ben­e­fi­cia­ries.

Lukhaimane said the Reg­is­trar of Pen­sion Funds had re­cently an­nounced that there was about R10 bil­lion of un­claimed ben­e­fits in the min­ing in­dus­try alone.

Re­fer­ring to a case that came be­fore her tri­bunal, she said for a pen­sion fund to cite pre­scrip­tion when ben­e­fi­cia­ries came for­ward to claim these ben­e­fits only ex­ac­er­bated the prob­lem.

Ms Y brought a com­plaint against the Minework­ers Prov­i­dent Fund over the non-pay­ment of a ben­e­fit fol­low­ing the death of her part­ner, who died in July 2004. The de­ceased was an em­ployee of Har­mony Gold and a mem­ber of the fund.

Ms Y com­plained that the fund had failed to al­lo­cate a por­tion of the ben­e­fit to her and her late part­ner’s mi­nor son. She said the fund had told her that it was still in­ves­ti­gat­ing the ex­is­tence of her part­ner’s other ben­e­fi­cia­ries.

The fund raised pre­scrip­tion as a de­fence to the claim, say­ing it was time-barred, be­cause the claim was lodged af­ter three years since Ms Y’s case arose.

In her de­ter­mi­na­tion, Lukhaimane said the com­plaint was not time-barred. She said the Pre­scrip­tion Act pro­vides for cir­cum­stances un­der which pre­scrip­tion is in­ter­rupted.

Lukhaimane said that, in Fe­bru­ary this year, the fund had con­firmed that there was an un­claimed death ben­e­fit of R596 541 avail­able to the de­ceased’s ben­e­fi­cia­ries. She said that, in ac­cor­dance with the Act, pre­scrip­tion is sus­pended by the fund’s “tacit ac­knowl­edge­ment of the debt”.

She said a death ben­e­fit must be dis­trib­uted and paid with­out un­rea­son­able de­lay, and that funds have 12 months fol­low­ing a mem­ber’s death to trace and iden­tify po­ten­tial ben­e­fi­cia­ries.

In this case, 12 years had passed, dur­ing which the fund had failed to com­plete its in­ves­ti­ga­tion.

She or­dered the fund’s trus­tees to com­plete its in­ves­ti­ga­tion and dis­trib­ute the ben­e­fits to the ben­e­fi­cia­ries, with­out any fur­ther de­lay. The fund was also or­dered to pay a 10% in com­pen­satory dam­ages, bring­ing the to­tal to R656 195, for its tardy con­duct.

martin.hesse@inl.co.za

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