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PFA ruling concerning the payment of a disability benefit as a result of mental infirmity

06 February 2008 Pension Funds Adjudicator

The Pension Funds Adjudicator issued a landmark ruling in the matter of P v Eskom Pension and Provident Fund regarding the entitlement to a disability benefit on the grounds of mental infirmity.

The complainant was employed by Eskom from 12 July 1989 until May 2005, when her employment contract was terminated due to ill-health. Prior to the termination of the employment contract, the complainant applied for an ill-health benefit and underwent various medical evaluations. A report from Miss C, an occupational therapist, concluded that from a physical functional point of view, the complainant should be able to cope with the inherent physical demands of her job, although a period of work hardening would be required given the extended absence from work.

A neuropsychological assessment from Mr M, a psychologist firstly concluded that there was no wilful exaggeration of the symptoms and that the complainant’s present level of neuropsychological functioning would be incompatible with a return to the open labour market at present. Furthermore, the complainant is approximately 20 months post trauma and only minimal further improvement in her neuropsychological difficulties can be expected at this stage. The psychologist concluded that some further improvement in the mental functioning may occur with more adequate psychological treatment.

Dr F, a neurologist, submitted a report stating that the complainant’s symptomatology appears to be of an entirely psychological nature and may be related to a personal injury claim against another medical practitioner. He was of the view that the psychological problems could be resolved with time and motivation but this is unlikely to be resolved until the litigation is completed. He was also of the view that it was quite possible for the complainant to recover completely from this type of ordeal with no long term mental changes. However, with regard to the question of her fitness to work, he was of the view that this was a difficult question to answer. He finally concluded that in the present situation the complainant would not be able to return to work but was of the view that there was an excellent chance that this may or could be resolved in the medium term.

Dr B, a specialist psychiatrist, concluded that the psychiatric treatment is poor, inadequate and far from optimal. The doctor was of the view that the complainant should gradually resume work with the employer with reduced stress levels and constant support from the employer.

The fund’s claim assessor rejected the ill-health disability application primarily on the grounds that the disability was not of a permanent nature. Instead, the complainant was paid a withdrawal benefit. The complainant was unhappy with the decision of the fund and lodged a complaint with the adjudicator’s office.

The Adjudicator firstly held that in determining whether the member is entitled to a disability benefit and whether the fund has properly exercised its discretion, the enquiry is not whether the trustees were wrong in repudiating the claim, but rather whether the decision reached is reasonable based on the evidence before them.

After examining all the medical evidence and the submissions of the parties, the Adjudicator accepted that the medical evidence confirmed that the complainant was unable to return to employment in her current position. Furthermore, in the absence of a rule creating such a condition, the liability for a disability benefit should not be declined simply on the basis that there may be a possibility that the disability may be removed by other medical treatment. Therefore, the Adjudicator concluded that there was sufficient grounds for finding that the claims assessor’s decision was unreasonable on the medical evidence before him and held that the complainant was entitled to an ill-health disability benefit. Therefore, the fund was ordered to pay the complainant an ill-health retirement benefit, less amounts already paid and further less any deductions permitted by the Act, together with interest thereon.

Click here to read the full ruling (PDF file 72kb)

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