If you are wondering who you should complain to about disability benefits -
the Long Term Insurance Ombudsman or the Pension Funds Adjudicator - read
on.
John Murphy, the Pension Funds Adjudicator, says the answer is that if your
fund provides for a disability benefit in terms of its rules, any complaint
that you may have regarding the interpretation or application of the rules
must be sent to him.
On the other hand, if the disability benefit is available to fund members
as a result of a free standing disability scheme or other insurance
arrangement, Judge Jan Steyn, the Long Term Insurance Ombudsman, is your
man.
In a recent case involving the Cape Joint Retirement Fund, Murphy found
that Charles Munnik, a fireman, who suffered a heart attack, did qualify
for a disability pension despite the fact that the insurer had turned the
claim down.
The rules of the pension fund provided cover for a member who became
disabled as a result of an accident, disease or illness, if he could no
longer pursue his own or similar occupation that was covered by his
training and experience.
The insurance company with which the pension fund had a contract relied on
its own contract for turning down Munnik's application for a disability
pension.
Murphy says the contract and the rules of the fund differed in two
significant respects. Firstly, under the rules Munnik qualified for the
benefit as he could not longer pursue his own or a similar occupation, but
under the contract he only qualified if he could no longer perform his own
occupation or another occupation.
Secondly, under the rules, in assessing whether Munnik could perform a
similar occupation, the fund was entitled to take into account his training
and experience, whereas under the contract, the insurer could go further
and take into account whether Munnik could reasonably be expected to become
qualified with further training and education. The insurer said that he
could do administrative duties and light work.
But Murphy differed with the insurer about the interpretation of a similar
occupation for Munnik.
The work of a fireman is unique and the occupation suggested by the insurer
- administrative duties - did not require muscle strength, fitness or a
resilient respiratory system.
Had this case fallen under a separate insurance contract, Munnik probably
would not have qualified for a disability benefit.
Murphy warns pension funds to ensure that their insurance cover equates
with the cover provided for under the fund's rules otherwise the fund could
find itself liable for benefits for which it does not have appropriate
insurance cover.