If you resign from your job and want to leave your retirement savings in your retirement fund, you should make sure that this is allowed in terms of the fund’s rules. If you simply assume that you can leave your money in the fund until you retire, you take the risk that the fund will treat your savings as an unclaimed benefit, and you could lose the right to claim it.
Furthermore, if you have a problem with your retirement fund, you should complain to the Pension Funds Adjudicator (PFA) as soon as possible or the adjudicator may be unable to help you.
JP du Preez, of Petit in Benoni, learnt these lessons the hard way after Elmarie de la Rey, the acting adjudicator, recently dismissed his complaint against the Strandfoam Pension Fund.
In June last year, Du Preez complained to the PFA that he was unable to access his withdrawal benefit, more than nine years after he resigned from Strandfoam.
Du Preez was employed by Strandfoam and belonged to the Strandfoam Pension Fund from June 1978 to March 31, 2001, when he resigned from Strandfoam.
When he resigned, the fund told Du Preez that he would receive his retirement benefit within three to six months. However, Du Preez decided to leave his benefit in the fund to earn further interest, because he was only 54 years old at the time.
The fund also told Du Preez that any inquiries about his benefit should be made in writing with Sanlam, which was the Strandfoam Pension Fund’s administrator at the time.
After Du Preez resigned from Strandfoam, the administration of the Strandfoam Pension Fund was moved from Sanlam to Absa Consultants & Actuaries and then to mCubed Employee Benefits.
The Strandfoam Pension Fund has been winding down for a number of years. The fund’s 10 remaining members are in the process of being transferred to the Allan Gray Retirement Annuity Fund. Once this has been done, the Strandfoam Pension Fund will be deregistered.
Du Preez told De la Rey that since his resignation, he had asked three different insurance brokers to make inquiries about accessing his withdrawal benefit, but without luck. However, Du Preez did not try to contact Sanlam in writing, even though the Strandfoam Pension Fund had informed him that inquiries should be directed to the fund’s administrator.
In October 2008, Absa Consultants & Actuaries told Du Preez that his status on their records was “inactive”.
In its response to De la Rey, the Strandfoam Pension Fund said that its rules do not provide for paid-up or deferred membership. The fund also pointed out that, in terms of its rules, with the exception of death benefits, the provisions of the Prescription Act apply in respect of unclaimed benefits.
According to the Prescription Act, debts prescribe after three years. Du Preez’s withdrawal benefit became due and payable on April 1, 2001 and so it prescribed on April 1, 2004, which means that, effective from that date, Du Preez lost the right to claim his benefit.
According to the Pension Funds Act, the PFA shall not investigate a complaint if the act or omission to which it relates occurred more than three years before the date on which the complaint is received.
Du Preez submitted his complaint with the PFA in June last year. De la Rey dismissed his complaint on the basis that it is time-barred and had been lodged with her office too late.