Adjudicator probes two funds
Johannesburg - Two provident funds will face an investigation into
possible gross dereliction of duty after two claimants had to wait years
for death benefits, the pension funds adjudicator (PFA) said on Friday.
the first case, a KwaThema woman complained to the acting PFA Dr
Elmarie de la Rey in June 2008 that the Food and Allied Workers Union
Provident Fund had not paid out a benefit following the death of her
partner in September 2005.
In response to inquiries by the PFA,
the provident fund confirmed membership of the deceased and said a
resolution of the trustees was still awaited.
It was still
outstanding by August 2010 and the PFA was told that the trustees had 12
months to trace the deceased's dependants and effect payment of the
The provident fund said the duty to pay was not
determined by the expiry of that period, but whether the board was
satisfied that it had investigated and considered the matter properly
enough to make an equitable allocation.
"No convincing reasons
have been advanced by the respondent to explain the inordinate delay in
the distribution of the deceased's death benefit, other than that the
trustees' resolution is still outstanding. This explanation is
unacceptable," said De la Rey.
She ordered the provident fund to
pay the death benefit, together with interest at 15.5% per annum
computed from September 18, 2005 to date of payment, to the dependants
of the deceased within 14 days of June 6, 2011.
In another case, a
woman from Mahikeng complained to the PFA that Bosele National
Provident Fund had delayed paying out the death benefit to the
dependants of a man who died on January 30 2004.
They were told
the payment was "in progress" but because they were migrating to a new
computer system, it suspended contributions and payment of benefit
claims until May 22 2009.
On June 19 2009 it said it could not
migrate the data for "technical reasons" and it had escalated the matter
to the "highest authorities".
But by May 2011 the respondent had still not paid the death benefit.
De la Rey said by not paying out, the fund had failed to discharge its duties.
respondent's negligence cannot be condoned by this tribunal. The
respondent's failure to migrate its data over a lengthy period of time
cannot be a justifiable excuse for the delaying in paying the death
The respondent was ordered to pay the death benefit,
together with interest at 15.5% per annum computed from January 2004 to
date of payment, to the man's dependants within 14 days of June 6 2011.
this case too, a copy of this determination was to be forwarded to the
registrar of pension funds as well as the head: surveillance and
enforcement, registrar of pension funds, for possible action against the
trustees of the respondent for what would appear to be a gross
dereliction of duties by the trustees," De la Rey said.