Acting in a manner that benefits the client
We often hear and read about determinations handed down by the various Ombudsmen and are at times tempted to ask what type of standing do these determinations have? Do the Ombudsmen have the necessary teeth to enforce a determination?
We no longer have to worry about this question, as a recent judgement in the North Gauteng High Court proved that the Pension Funds Adjudicator’s (PFA) teeth are as sharp as ever.
Shirking responsibilities
Acting Judge Dewrance was commenting on a matter between Linkie Mantsho vs the MD of the Municipal Employees Pension Fund (MEPF).
The MEPF had failed to provide Mantsho with her benefit statements for 2005 to 2013. She also noticed a cancelled withdrawal claim which she says she was unaware of.
She lodged a complaint with the PFA to compel the MEPF to provide her with the 2005 to 2013 benefit statements as well as information regarding the cancelled withdrawal claim.
In her determination, the PFA ordered the MEPF, among other things, to provide Mantsho with her latest benefit statement as well as with information regarding the aborted 2007 withdrawal claim; to pay her withdrawal benefit; and to provide her with a detailed breakdown of the withdrawal benefits.
When none of this appeared to have been done by the MEPF, Mantsho approached the High Court of South Africa, Gauteng Division for relief in the form of a contempt of court findin
Trying to hide
The High Court dismissed the application on the basis that the PFA is not a court and, therefore, the MEPF cannot be in contempt of court.
However, Judge Dewrance added that while the PFA is not a court of law, the Pension Funds Act grants the PFA the same powers that a court of law has. The determinations by the PFA enjoy the same status as a Civil Court judgment and are as legally enforceable as a court judgment.
Judge Dewrance said the PFA is a creature of statute which is appointed in terms of the provisions of the Pension Funds Act. “The determination may be enforced in terms of the provisions of sections 30O of the Pension Funds Act,” said Judge Dewrance.
No tyrant
While this fact has been reinforced by the High Court, it does not mean that the PFA rules over the industry with an iron fist. Senior Council for the MEPF argued that an aggrieved party has a right to challenge the determination in the High Court under section 30P of the PFA.
However, if that party proves to be unsuccessful in the challenge, and fail to give effect to the PFA’s determination, that party would then be in contempt of the High Court that dismissed the application and susceptible to the sanctions that are available in that regard.
Implications on the industry
The reinforcement by the High Court is in line with the messages in the industry that added powers are being given to various role players in the industry to ensure that the customer gets the best protection possible in terms of the law.
The situation discussed above possibly highlights the importance of acting in a manner that fully benefits the client. A number of determinations by the PFA have dealt with the issue of not providing members with up to date benefit statements. In a world where email is a major form of communication, there is no reason that this should be an issue.
Editor’s Thoughts:
A number of laws in the country entrench the powers of the Ombudsman as an extension of the courts in certain instances. Why are some companies waiting to be forced to do the right thing rather than acting in a manner that benefits the client from the start? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].
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