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PFA: Complaints against pension funds dismissed

09 December 2010 Acting Funds Adjudicator
Dr Elamarie de la Rey, Acting Funds Adjudicator.

Dr Elamarie de la Rey, Acting Funds Adjudicator.

The Acting Pension Funds Adjudicator, Dr Elmarie de la Rey, this week dismissed four different complaints for varying reasons:

In the first case, the complainant, Richard Martin, complained that the Bergman Ingerop SA Staff Pension Fund and Alexander Forbes as the administrator of the fund, had paid him a lower pension withdrawal benefit than he had been told to expect.

In May 2004, Martin contacted Alexander Forbes to query his pension fund balance and was given a value as at 30 April 2004.

When his financial adviser made arrangements to transfer the withdrawal benefit to a preservation fund but on 30 June 2004, the amount transferred was lesser than the value he was given earlier.

Dr De la Rey took into consideration the fact that since it takes much time and effort to work out exact returns on investment, funds work with interim (notional) interest rates when someone wishes to withdraw during the year and in between valuation and accounting dates.

Later, when the proper calculations are done (once a year or so), any amount by which the withdrawing member was underpaid may be paid out to him or her, depending on the rules.

The interest rate on which the trustees were working in this case, was adjusted downward between the date of the quote and the actual date of withdrawal, hence the difference/shortfall.

“Further in March 2003, there was a drastic fall in the equity markets, which would have had a negative impact on the value of most pension funds,” Dr De la Rey said in her determination, dismissing the case.

In the second case, Frank Fish complained that his provident fund disability benefit had only paid him a 50 percent benefit on the basis that he had been found to be “partially disabled”.

Fish claimed that he was totally and permanently disabled and thus entitled to his full fund benefit as well as an insured benefit of R51840.

Dr De la Rey found on the medical evidence presented to her that any reasonable person would have also come to the conclusion that Fish was partially disabled.

In the third case, C Kgomotswana lodged a complaint against Kolk Pension Fund regarding the death benefit payout of his brother, K Kgomototswana. The complaint was dismissed because it was time-barred. In terms of the Pension Funds Act, you must lodge a complaint with the adjudicator within three years of the act or omission your complaint is related to.

The pension fund member, K Kgomototswana died in November 2002 but the complaint regarding his death benefit was only lodged in January 2008 - five years later.

In the fourth matter, Rishi Budhoo made a complaint against Sasol Pension Fund and its administrator, Alexander Forbes Financial Services.

Budhoo divorced his wife, Elaine in July 2009 and their divorce settlement agreement stated “R68000 to be paid to Rishi’s account after Elaine receives the pension fund money”.

The settlement agreement did not state the fund responsible for payment of Elaine’s share of pension money. According to the Pension Funds Act, funds are paid out to non-member spouses on divorce provided that the divorce order is granted while the member spouse is still a member of the fund, the benefit due to the non-member spouse is clearly stated and the divorce order clearly states the correct name of the fund.

Dr De la Rey dismissed the complaint.

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