Nine years after he resigned, a former employee of Allied Publishing has received his retirement benefit, after the Pension Funds Adjudicator (PFA) ruled that his employer had unlawfully claimed his benefit.
Dumisa Mvinjelwa left Allied Publishing and the Allied Publishing Provident Fund in May 1999.
Old Mutual, the administrator of the fund, paid his withdrawal benefit of R6 023.92 to Allied Publishing, because the company had sent Old Mutual a letter stating that Mvinjelwa owed Allied Publishing R11 000 for an unpaid housing loan.
In her ruling earlier this month, Mamodupi Mohlala, the PFA, says Allied Publishing misled Old Mutual into believing it should pay the withdrawal benefit to the company and not to Mvinjelwa.
According to the Pension Funds Act, your employer is allowed to deduct from your pension fund withdrawal benefit the amount you owe for a housing loan granted or guaranteed by your employer.
However, in its submission to the PFA, Allied Publishing said the deduction related to the loss of a company motorcycle, which had been stolen while in Mvinjelwa's possession.
The company said a disciplinary hearing in October 1998 had found Mvinjelwa guilty of negligence. According to Allied Publishing, Mvinjelwa agreed to reimburse the company R11 000, which was the book value of the motorcycle.
The company stated that to do this, Mvinjelwa started paying back a small monthly sum.
But Mvinjelwa still owed Allied Publishing R8 149.72 when he left the company's employment, and so it claimed his retirement withdrawal benefit to cover the shortfall.
In his complaint to the adjudicator, Mvinjelwa stated that:
- Allied Publishing had not granted him any loan that would have justified the appropriation of his withdrawal benefit;
- He paid the company R200 a month as compensation for the loss of the motorcycle; and
- Allied Publishing was compensated in full by its insurers for the loss of the motorcycle.
Delay overlooked
The company drew Mohlala's attention to the fact that, in terms of the Pension Funds Act, Mvinjelwa's complaint was time-barred.
In terms of the Act, the adjudicator will not investigate a complaint if it relates to an event that occurred more than three years before the complaint is received.
Mvinjelwa did not provide the PFA with a reason for the delay in lodging his complaint.
Mohlala says she exercised her discretion to overlook the delay on the grounds that the prospects of Mvinjelwa's case succeeding were strong and because the issues it presented were important.
She ruled that the deduction was unlawful because:
- It did not relate to a housing loan;
- There was no court judgment against Mvinjelwa in respect of compensation due to Allied Publishing as a result of theft, dishonesty, fraud or misconduct; and
- There was no evidence that Mvinjelwa had acknowledged liability for damages. His agreement to repay R200 a month was vague, and it was unclear if it was an acknowledgment of debt or an application for a loan.
Mohlala also says that Allied Publishing did not dispute that it had received a payout from its insurer for the stolen motorcycle.
Mohlala told the Allied Publishing Provident Fund that, within four weeks of her determination, it must pay Mvinjelwa R6 023.92, plus interest of 15.5 percent a year, calculated from June 1999 to the date on which it pays Mvinjelwa his benefit.