PFA upholds refusal of transfer of funds
Muvhango Lukhaimane, Pension Funds Adjudicator.
The Pension Funds Adjudicator has dismissed a complaint from a member whose request to transfer from one provident fund to another had been refused.
P Mokgopha who had been employed by Sun International (SA) Ltd from December 1998 was a member of SACCAWU National Provident Fund (first respondent).
He told Pension Funds Adjudicator Muvhango Lukhaimane that he wished to transfer to the Sun International Provident Fund.
He said the first respondent had been under administration “for a very long time” and his funds were not growing. He did not realise that when he joined the first respondent, he could not change the fund whilst still in employment.
He was told that the rules of the first respondent did not allow him to join the Sun International Provident Fund.
The Old Mutual Life Assurance Company (SA) (Pty) Ltd (second respondent) responded to the complaint in its capacity as the first respondent’s administrator. It submitted that the first respondent was not under administration, but was placed provisionally under curatorship on 10 September 2002 by the High Court of South Africa.
It stated that since the first respondent had been placed under curatorship, its assets had tripled in value. The first respondent was in excellent financial standing and was submitting audited annual financial statements to the Financial Services Board.
The second respondent attached a breakdown of the complainant’s contribution history and the bonuses allocated to his record to show growth of his accumulated credit since the date he joined the first respondent.
The second respondent submitted that the member could only resign from the first respondent if he left the employer or the employer. It also submitted that it would ensure that the first respondent was in good financial standing and that there was no reason for concern.
In her determination, Ms Lukhaimane said the rules of a fund were paramount and always prevailed over any other document.
“The complainant can only transfer his funds to another fund once he ceases to be an eligible employee and exits the first respondent in terms of the first respondent’s rules.
“The rules of the first respondent do not allow for the complainant’s funds to be transferred to the Sun International Provident Fund. The complainant is obliged to remain a member of the first respondent until his retirement, retrenchment, termination of service or death in terms of the first respondent’s rules.
“By allowing the complainant to transfer his funds to the Sun International Provident Fund, the first respondent will be acting contrary to its rules.”
In dismissing the complaint, Ms Lukhaimane said that since the curator had submitted that the fund was now in a healthy state, it was important for the Registrar to review whether or not the placement of the first respondent under curatorship was still necessary.
