Former Pension Funds Adjudicator (PFA), Mamodupi Mohlala, recently issued a default ruling against the National Union of Metalworkers of South Africa (Numsa) Staff Provident Fund relating to a complaint the adjudicator received in February last year about the non-payment of a death benefit.
The benefit was partially paid out a month later, but because of the fund's lack of communication with Mohlala's office, the PFA continued to pursue the complaint. The fund, administered by NBC Holdings, was named as one of the top 20 worst-performing funds on the PFA's pension fund scorecard, which evaluated funds' service levels based on their response to complaints.
Last month Mohlala issued 287 default rulings against the Private Security Sector Provident Fund (PSSPF), which is also administered by NBC Holdings.
Elmarie de la Rey, the acting PFA, says that "although a substantial number of default determinations were given against PSSPF, there was an even larger number of determinations in its favour against recalcitrant employers who had not responded to complaints".
The complaint against the Numsa Staff Provident Fund concerned fund member R Tladi, who died on May 17, 2007. In her complaint, his wife, S Tladi, said she submitted the required documents to claim the death benefit, but had not received any benefit.
Tladi said she was unaware of any child that may have been fathered by her husband out of wedlock and she had no knowledge of anyone who was financially dependent on him, so she could not understand why the death benefit had not been paid.
Communication failure
The ruling states that the fund failed to respond to the complaint, despite several attempts by the PFA's office to obtain a response.
Mohlala says the failure by the fund to file a response delays the resolution of a complaint and protracts the dispute unnecessarily. "Moreover, when the last reminder letter was sent to the fund on June 2, 2008, it was already 12 months after R Tladi had died."
According to the Pension Funds Act, when a pension fund member dies, a fund's board of trustees is expected to trace the member's dependants and pay out any benefits within a year.
Mohlala ordered the trustees to pay out the death benefit in terms of the fund's rules. They were also ordered to inform the PFA office and S Tladi of their decision regarding the payment of a death benefit and the beneficiaries.
Frans Phakgadi, the head of NBC's legal services, says NBC received the determination on October 9, 2009 and it was the first time the administrator was made aware of the complaint. NBC asked the PFA's office for a copy of the complaint but the PFA's staff were unable to find the file. The PFA is moving offices this week.
NBC's administration file reflects payments made to S Tladi in March 2008 and to a child in June 2008. A decision is pending on the payment of a benefit to a second, minor child.