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THE FINANCIAL SERVICES TRIBUNAL

 

CASE NO.: PFA52/2022

 

 

In the matter between:

 

SIDDHARTHIYA PILLAY                                                      APPLICANT

 

and

 

MOMENTUM RETIREMENT ANNUITY FUND                     FIRST RESPONDENT

 

 

MOMENTUM METROPOLITAN LIFE LIMITED                    SECOND RESPONDENT

 

 

THE PENSION FUNDS ADJUDICATOR                              THIRD RESPONDENT

 

 

In re: Application in terms of sec 230 of the Financial Sector Regulation Act 9 of 2017 for the reconsideration of a determination in terms of sec 30M of the Pension Funds Act 28 of 1956

 

 

DECISION

 

 

1          The application concerns the allocation of a death benefit following the death of the applicant’s father, the late Mr K Pillay, who had been a member of the first respondent, the Fund.

 

2          The applicant (now 28) was born of the first marriage of the member, and her mother died when she was still very young. The member remarried and of this marriage a son (now 19) was born. At the time of his death, the member accordingly had three potential dependants who could share in the death benefit (R146 507.00) in terms of sec 37C of the PF Act.

 

3          The member had nominated his two children as beneficiaries in equal parts. That notwithstanding, the Fund allocated the full amount to his spouse. The personal relations between step-mother and step-daughter are strained, and the applicant lodged a complaint with the PFA about the allocation. The son did not.

 

4          In her first letter to the Fund, the applicant stated that she was not factually dependent on the member, although he did pay for some of her expenses.

 

5          As matters developed, so the facts multiplied, but the essence of the Fund’s reasoning was that the spouse was partly dependent on the deceased and would have, to that extent, remained dependent upon him for many years. The death benefit was not sufficient to cover the deficit.

 

6          The Fund’s explanation for its decision, as summarised by the PFA, was the following:

 

The fund submitted that she did not live with the deceased at the time of his death. She was employed and not financially dependent on the deceased. She was a first- year post graduate student at the University of KwaZulu Natal, studying towards her PhD, which is a 3-year course with an estimated cost of R100 620.00 for the duration of the course. [She already held an LLM and an MSc.] The cost of her tuition is fully covered by a scholarship which she has obtained. She received proceeds from a PPS policy and a Momentum Life Annuity which were in total approximately R210 000.00. She also received 20% (approximately R96 250.00) of a Sanlam death benefit. Furthermore, she stands to receive 50% from the deceased's estate. Any potential financial dependency needs that she might have had would have been more than met by the benefits that she has received and still stand to receive. Considering the nature of her relationship with the deceased (daughter), her age (28), the wishes of the deceased (nominated to receive 50% of the death benefit), the amount available for distribution in the fund, and the fact that there is another dependant whose financial dependency on the deceased is higher than hers, the board decided to allocate 0% of the death benefit to her. The fund submitted that in her letter dated 24 March 2021, she stated that she lived with the deceased in the year prior to his death and was not financially dependent on him; he only paid for some of her expenses such as a storage unit and car insurance. She also stated that she was employed with an income of R10 000.00 per month, even though her employment is at irregular intervals. The board considered her prospects of being permanently employed once she has completed her studies. The deceased's spouse on the other hand, although employed as a professor, will reach the normal retirement age in about 8 years. The board considered that the deceased would have had a duty to maintain her for the rest of his life had he been alive.

 

7          More need not be said. The applicant reargued the matter at length in her reconsideration application but everything she said was considered by both the Fund and the PFA. A rehash does not advance her case. The Fund had to make a value judgment and although one need not to agree, that does not mean that the Fund had exercised its powers unreasonably or improperly or unduly fettered the exercise of its discretion.

 

8          The PFA considered all the facts and submissions in detail and concluded that the Board of the Fund exercised its discretion properly and, having read and considered it all again, there is no justification for interfering with the decision of the PFA.

 

9          The parties, it may be noted, waived their right to a formal hearing.

 

ORDER: The application is dismissed.

 

 

Signed on behalf of the Tribunal on 22 November 2022.

 

LTC Harms (deputy chair)

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