Minework­ers fund takes 13 years to pay fam­ily of a worker

Pen­sion funds ad­ju­di­ca­tor slams prov­i­dent fund for us­ing tech­ni­cal­ity to deny man’s widow her pay­out

Sowetan - - Your Money - By Devlin Brown [email protected]­tan.co.za

Pen­sion funds ad­ju­di­ca­tor Mu­vhango Lukhaimane has lashed out at the Minework­ers Prov­i­dent Fund for sit­ting on a de­ceased fund mem­ber’s sav­ings for al­most 13 years while his life part­ner and child had to make do with­out any pay-outs from the fund. When con­tacted by the part­ner of the de­ceased, the fund hid be­hind pre­scrip­tion as a de­fence. Pre­scrip­tion is when a debt or obli­ga­tion is ex­tin­guished after a pe­riod of time. Lukhaimane was scathing about this in her 2017/18 an­nual re­port, call­ing the fund “dis­hon­est and disin­gen­u­ous” for rais­ing pre­scrip­tion on un­claimed ben­e­fits.

It is the re­spon­si­bil­ity of the board of trustees of your pen­sion fund to iden­tify and find your ben­e­fi­cia­ries when you die, and they must do so within a rea­son­able time frame. Fail­ure to do this has con­trib­uted to bil­lions of rand in un­claimed ben­e­fits, with the pen­sion funds ad­ju­di­ca­tor blam­ing it on a lack of skills and funds drag­ging their feet. The man, who died on July 31 2004, worked for one of the big gold min­ing com­pa­nies and was a mem­ber of the Minework­ers Prov­i­dent Fund. By Fe­bru­ary 2017, his full ben­e­fit of R596 541 was still un­claimed, even though he had ben­e­fi­cia­ries – at least his own child.

The Pen­sion Funds Ad­ju­di­ca­tor or­dered the fund to pay the ben­e­fit plus a 10% fine for “com­pen­satory dam­ages” with­out de­lay after re­ceiv­ing a com­plaint from the man’s life part­ner that she needed ac­cess to the funds for the child’s main­te­nance. Lukhaimane told Money that long de­lays can only be jus­ti­fied in as lit­tle as 5% of all com­plaints brought be­fore her of­fice. “We of­ten find that where there has been a de­lay, it can only be jus­ti­fied in about 5% of the cases; the rest is just funds tak­ing their time.” In terms of sec­tion 37C of the Pen­sion Funds Act which reg­u­lates the pay­ments of death ben­e­fits, the board of trustees must:

Iden­tify de­pen­dents and

● those the de­ceased mem­ber has nomin ated to re­ceive the ben­e­fits; Make the ben­e­fit al­lo­ca­tions

● on an eq­ui­table ba­sis; and De­ter­mine an ap­pro­pri­ate

● mode of pay­ment of the death ben­e­fit.

The act also obliges trustees to find ben­e­fi­cia­ries within 12 months. If they find them sooner, they should pay out as quickly as pos­si­ble. Sec­tion 37C iden­ti­fies three types of de­pen­dents:

Le­gal de­pen­dents – there is a ● le­gal duty to sup­port such a per­son (spouse, chil­dren);

Fac­tual de­pen­dents – where ● the de­ceased had no le­gal obli­ga­tion to sup­port these peo­ple but did so any­way;

Fu­ture de­pen­dents – per­sons

● where if the de­ceased did not die, would have been sup­ported (a fi­ancée or el­derly par­ents). In this case, it be­came clear that the fund took way too long to con­duct its in­ves­ti­ga­tion, and when con­tacted by the part­ner of the de­ceased, it used pre­scrip­tion to jus­tify its fail­ure to pay out. Lukhaimane said rea­sons for the in­crease in un­claimed ben­e­fits in­clude lack of ex­per­tise to iden­tify ben­e­fi­cia­ries and in­valid or in­com­plete data main­tained by funds and their ad­min­is­tra­tors. “These is­sues should un­der no cir­cum­stances be vis­ited on the right­ful claimants,” she said. She said with the greater reg­u­la­tory over­sight of the Fi­nan­cial Ser­vices Con­duct Au­thor­ity (FSCA), “the bad ap­ples should be easy to weed out” to fur­ther pro­tect con­sumers.

/ NA­DINE HUT­TON/BLOOMBERG VIA GETTY IM­AGES

Mine work is hard and dan­ger­ous. A miner's sav­ings in a pen­sion fund can pro­vide for their fam­i­lies in the event of their death be­fore re­tire­ment.

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