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THE FINANCIAL SERVICES TRIBUNAL

 

CASE NO.: PFA65/2021

 

 

DITABA JOSEPH RAMAROU                                  APPLICANT

 

and

 

AUTO WORKERS PROVIDENT FUND                   FIRST RESPONDENT

 

CHAMPION WHEEL AND TYRE                             SECOND RESPONDENT

 

THE PENSION FUNDS ADJUDICATOR                 THIRD RESPONDENT

 

 

DECISION

 

 

1            This is an application for the reconsideration of a determination by the Pension Funds Adjudicator in terms of sec 230 of the Financial Sector Regulation Act 9 of 2017.

 

2            The parties waived their right to a formal hearing.

 

3            The applicant was a member of the Fund for less than four years – the period of his employment with the second respondent. He retired due to ill-health and became entitled to the benefits prescribed by Fund rules.

 

4            The primary rule is Rule 6(4):

 

Ill health:

 

If a MEMBER, In the opinion of the BOARD, through accident or ill health has become continuously and permanently unable to perform his usual work in the MOTOR INDUSTRY, such a MEMBER may elect to retire from SERVICE at any time prior to NORMAL RETIREMENT AGE . . ..

 

On the ELECTION DATE he shall be entitled to a cash lump sum. Calculated as:

 

(a)         Three times his last determined annual REMUNERATION, subject

 

to the provisions of Rule 4(2);

 

Plus

 

(b)         his FUND CREDIT.

 

5            The qualifying rule 4(2) provides that:

 

All benefits shall be payable in full from the outset of membership, save that, in the event of a claim for benefits in terms of Rule 6(4), such benefits, except for those in terms of Rule 6(4)(b), shall subject to the discretion of the Trustees be limited to nil in the first year of membership; 20% of the full benefits in the second year; 40% in the third year; 60% in the fourth year; 80% in the fifth year; and 100% of the full benefits once the MEMBER has completed five years of membership. Provided that, if the condition giving rise to the claim has arisen from an accident which occurred after the commencement of membership of the fund and which in the sole and absolute discretion of the BOARD was a bone fide accident and in addition was not caused by a medical condition from which the MEMBER was suffering, then the above limitations shall fall away.

 

6            The proviso to Rule 4(2) did not apply, and the applicant was paid 60% of his full benefits and his fund credit.

 

7            The applicant had some complaints about the procedure before the PFA but since they do not affect the relief sought, I do not intend dealing with them.

 

8            The main relief sought is that this Tribunal should find that Rule 4(2) militates against the law and the Constitution, and that the Fund should be ordered to pay him the remaining 40% of his benefit.

 

9            The applicant’s complaint is bad on the facts. It assumes that the rules discriminate against the disabled. That could only be possible of someone who resigns within one, two, three or four years for other or no reasons would under the rules be entitled to three times his last determined annual remuneration. The rules, more likely than not, give those that retire due to ill-health more than those who retire otherwise within the same time span. A pension fund is not an insurer against illness or disability.

 

10         In any event, the PFA’s jurisdiction derives from the Pension Funds Act 24 of 1956 and a “complaint” means a complaint of a complainant relating to the administration of a fund, the investment of its funds or the interpretation and application of its rules.

 

11         The PFA does not have jurisdiction to decide on the validity of a fund rule. In whatever way one reads either the Constitution or the PFA or the rules, the PFA does not have jurisdiction.

 

12         The applicant’s submission that the rule should be interpreted to suit his case is rejected.

 

Rules of interpretation do not work that way.

 

13         His allegation that Rule 4(2) forms part of the small print is without merit. He seeks to derive his benefit from the rules and he must live with the rules as a whole.

 

14         This Tribunal’s function is to decide whether the PFA was right or wrong in her decision. If it finds that the decision was wrong, it sets it aside and refers the matter back to the PFA. The Tribunal does not have the power to set rules of funds aside nor has it the power to order funds to pay complainants.

 

The application is dismissed.

 

Signed on behalf of the Tribunal on 15 November 2021.

 

 

LTC Harms (deputy chair)

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