Make sure your employer is sticking to the rules of your retirement fund, or you might lose out on benefits due to you.
In three recent cases, John Murphy, the Pension Funds Adjudicator, found that an employer was blatantly disobeying the rules of the retirement fund.
The employer was the Bahwaduba Bus Services company and the fund was the Orion Money Purchase Pension Fund. In each case the company did not allow the employees to join or rejoin the fund and did not contribute to the fund on employees' behalfs. So when mass retrenchments took place at the company in 1998, three employees lost out on retirement benefits.
Murphy ruled that Bahwaduba's failure to pay contributions and the fund's failure to collect these, did not exonerate the fund from paying benefits because the employees were entitled to be members of the fund.
If you were a member of this, or any other retirement fund, and lost out of benefits, check the rules of the fund to see what you were entitled to.
The Bahwaduba Bus company's excuse for not admitting Sealoga Sekele to the fund when she was employed for a second time in 1990, was that she was a builder's assistant and since the company was not building at the time, she was not an integral part of the company's operations and could have been dismissed at any time.
Murphy said this did not explain why the employer did not make her a member of the fund when she was entitled to be one under the fund's rules as she was employed by the company.
He also dismissed the fund's argument that because no contributions were received from the employer, the fund was unable to invest the contributions and was not liable to pay Sekele a retrenchment benefit.
Murphy ruled that the fund had to pay up the R7 500 retrenchment benefit plus interest as well as just under R850 in demutualisation benefits and interest to Sekele.
In a separate complaint, Murphy ordered the Orion Fund to pay about R28 000 in retrenchment benefits and about R3 300 in demutualisation proceeds to Manase Sathekge, another former employee of the Bahwaduba Bus Service company.
Sathekge was employed as a cashier and was dismissed in 1997. He took his case to the Commission for Conciliation, Mediation and Arbitration (CCMA) which found his dismissal to be unfair and ordered that he be reinstated. However, he lost his job in the mass retrenchments 18 months later.
The employer did not explain to Murphy why Sathekge was not reinstated as a member of the retirement fund.
Murphy said because the CCMA's decision was not challenged in law, Sathekge's services were never terminated and he qualified for membership of the pension fund.
As such he was entitled to a retrenchment benefit and the fund was ordered to pay.
Lesetja Gafane, was dismissed in 1997. He also challenged his dismissal at the CCMA which negotiated a settlement in terms of which he was to be re-employed. Bahwaduba said Gafane was not a member of the pension fund because there was a 12-month waiting period before new employees could join.
But Murphy found that the rules of the fund said nothing about a waiting period. He ordered the pension fund to pay Gafane his retrenchment benefit plus interest. Bahwaduba was instructed to pay this amount to the retirement fund.