PFA Ruling: Default determination against Gobodo Risk Management

The Pension Funds Adjudicator has issued a first time ever default determination in the matter of S.M.MAKAULA vs GOBODO RISK MANAGEMENT (The Employer/ First Respondent) and ABSA CONSULTANTS AND ACTUARIES (the Second Respondent/ funds Administrator), this heralds in yet another measure on the part of the Pension Fund Adjudicator to protect the interests of the member and ensure that complaints put before the Employer, Funds and their administrators are responded to timorously. In this particular matter the Adjudicator had repeatedly requested the Employer to respond to the complaint lodged by Makaula’ but the Employer had despite such requests failed to comply. Therefore due to the prejudice and delay occasioned to the complainant the Adjudicator proceeded to issue a determination against the Employer in default, based on the complainants’ version alone.

The facts of the matter are briefly the following:

The complainant was employed by Gobodo Risk Management (“the employer”) and was a member of the Retail Financial Intermediaries Provident Fund (“the fund”) until he resigned on 14 August 2007. Upon the termination of his employment, the complainant became entitled to receive a withdrawal benefit from the fund.

The complainant’s complaint is that he did not receive a withdrawal benefit since his resignation from the employer.

The fund’s administrator/ the second respondent responded as follows:

It indicated that the employer did not pay over any contributions to the fund since June 2007. Further, it submitted that the fund’s consultants have tried on several occasions to urge the employer to pay the outstanding contributions to no avail. Thus, the administrator pointed out that withdrawal claims from 1 June 2007 cannot be paid out until the employer pays the outstanding contributions to the fund.

The employer / first respondent was invited to file a response regarding the complainant’s complaint and the administrator’s response, but failed to do so. This tribunal sent out two letters to the employer requesting a response but it failed to file a response on each occasion

The Adjudicator held as follows:

This tribunal held that it has a power to issue default judgments in circumstances where a respondent failed to file a response as set out in Rule 31(2)(a) of the Uniform Rules of the High Courts read together with section 30O of the Pension Funds Act. This is due to the fact that a delay or a failure to file a response protracts the dispute unnecessarily and causes prejudice to the complainant in respect of his benefit in the fund.

It was held that the employer failed to comply with its duty to pay contributions as set out in section 13A of the Pension Funds Act read together with Rule 5.2 of the Fund’s rules. The fund was directed to compile a schedule of all outstanding contributions that is due by the employer. The employer was then ordered to pay the outstanding contributions together with interest at the rate of 15.5% per annum from June 2007 until the date of payment.

The full determination can be read here (PDF file 48kb)