THE FINANCIAL SERVICES TRIBUNAL

CASE NO.: PFA30/2023

In the mater between:

JG AFRIKA (PTY) LTD STAFF 
PENSION FUND (12/8/4157)	APPLICANT

and

LIBERTY CORPORATE	FIRST RESPONDENT

THE PENSION FUNDS ADJUDICATOR	SECOND RESPONDENT

Re: Applica�on for reconsidera�on of decision of PFA rejec�ng a complaint because it did not fall within the PFA’s jurisdic�on.

DECISION

1	The applicant, JG Afrika (Pty) Ltd Staﬀ Pension Fund (hereina�er “the Fund”), applies under the signature of one Mr PA Olivier (who calls himself the “Applicant” but later iden�ﬁes the applicant to be the Fund of which he is the chairman) for the reconsidera�on in terms of sec 230(1)(a) of the Financial Sector Regula�on Act 9 of 2017 of a decision of the Pension Funds Adjudicator made under sec 30M of the Pension Funds Act 24 of 1956.

2	The ﬁrst respondent is Liberty Corporate, a division of Liberty Group Ltd. It provided in terms of an agreement administra�ve func�ons for the Fund.

3	The second respondent is the Pension Funds Adjudicator.

4	The par�es waived their rights to a formal hearing and agreed that the mater may be decided on the papers as ﬁled.

5	Mr Olivier is also the chairman of JG Afrika (Pty) Ltd, the Employer member of the Fund. He ﬁled a complaint with the PFA on 17 October 2022 in the name of the Employer (not the Fund) against Liberty. That was the complaint that was dismissed by the PFA.

6	The Employer and the Fund are diﬀerent legal persona, one registered under the Companies Act and the other under the Pension Funds Act. The one is not the alter ego of the other. One may not blithely ignore the diﬀerence.

7	Since the Employer had no legal interest in the relief sought in the complaint, the complaint could have been dismissed by the PFA on that ground.

8	Because the Fund was not a party to the complaint, the dismissal of the complaint did not elevate the Fund to a person aggrieved as required by sec 230(1)(a) and the Fund has no legal standing to pursue the reconsidera�on applica�on.

9	Despite this, I shall consider the correctness of the PFA’s dismissal of the complaint on the ground that the PFA does not have jurisdic�on to consider the alleged “complaint” or to grant the relief sought in the complaint.

10	The complaint was formulated in the following terms:

The complaint relates to inordinate delays experienced as a result of the tardy and unprofessional manner in which [Libert] have dealt with the administra�on of the Fund, and with par�cular regards to their submission and extraneous handling of: 

1. The statutory actuarial valua�on as at 1 July 2018; and

2. Sec�on 18 Scheme Arrangement.

. . .

The delays in ﬁnalisa�on of the abovemen�oned maters had resultant ﬁnancial consequences, led to heightened frustra�ons by all members and par�es involved and delayed the approval of three sec�on 14 transfer cases for nearly two years.

11	The background is this: Liberty had been appointed to administer and manage the re�rement funds of the Fund. Disputes arose that were setled in January 2019, but this did not prevent the complainant to hark back to those complaints.

12	In any event

On 29 November 2019, JGA [deﬁned as the Employer] formally communicates their inten�on to terminate [Liberty’s] administra�on agreement (90-day termina�on no�ce, eﬀec�vely ending on 1 March 2020). Concurrently, management of JGA [the Employer] communicates to [Liberty] that the Board of Trustees had taken the decision to move into an Umbrella Fund arrangement with Allan Gray and to de-register the two standalone funds. This involves transferring all ac�ve members by way of sec�on 14 transfer, outsourcing all pensioners within the DB sec�on to a reputable insurer (Sanlam) in an�cipa�on of an ul�mate sec�on 14 transfer out of the fund, and to transfer any unclaimed beneﬁts into [Liberty’s] Unclaimed Beneﬁts Fund.

The complaint proceeded to state that Liberty had 180 days from date of ﬁrst submission of the sec�on 14 transfer, being 13 October 2020, to ﬁnalise the process, that is, by 12 April 2021. The sec�on 14 for Pensioners, DC Members and DB Members ought reasonably to have been completed and ﬁnalised had Liberty

a)	made all submissions rela�ng to the statutory valua�on �meously, and
b)	made all submissions for the subsequent sec�on 18 Scheme Arrangement �meously and in the prescribed manner and format,
c)	acted with urgency, due care, diligence and skill in the execu�on of their mandate in a fashion that could reasonably have been expected of them by any Client, and
d)	responded �meously to all FSCA queries.

13	The case appears to be that had Liberty acted expedi�ously, the members and the Employer, as well as the Fund’s ﬁnancial adviser (WPS) would not have suﬀered from intense dissa�sfac�on, discontent and frustra�on, and Fund would not have had to pay the agreed Asset Based Management Fee (0.33%) due under the agreement, but a lesser advice fee (0.23%) that would have been charged by Allen Gray. In addi�on, WPS was unable to earn a fee on the assets “held hostage by the disastrous handling of the sec�on 14 process” and therefore lost income.

14	That explains the relief sought:

a)	Instruc�ng a reduc�on of the Asset Based Management Fee (ABAF) charged by Liberty from 0.33% (typical average as this is asset value based) to a ﬂat 0.23% with immediate eﬀect. The revised ﬁxed fee should endure un�l such �me as payment is made by Liberty to Allan Gray.
b)	Instruc�ng a refund to members of the Fund, by Liberty, for the diﬀerence between the actual ABAF charged and 0.23%, from 12 April 2021 (180 days following the Sec�on 14 submission on 13 October 2020) to the ﬁnal date of payment to Allan Gray.
c)	Instruc�ng refund to WPS, by Liberty, for the scheme advice fees lost from 12 April 2021 to an agreed setlement date. The fees which WPS would have earned in the Allan Gray Umbrella Fund arrangement amount to 0.20% (plus VAT) per annum, payable monthly, on the month-end value of assets under administra�on.
d)	Instruc�ng a formal writen apology, from Liberty, to all members of The Fund rela�ng to the delays and frustra�ons caused.

15	Dealing with the prayers in reverse order, there is no basis on which the PFA can instruct anyone to apologise. Courts may do so in defama�on cases but that is about the limit. This kind of relief falls outside the scope of the PFA’s jurisdic�on.

16	A prayer for an instruc�on to “refund” WPS lost fees is a legal novelty. WPS is not a complainant and Mr Olivier/the Fund/the Employer cannot claim on its behalf. In any event, there is no legal basis on which WPS could claim anything from Liberty.

17	That leaves claims (a) and (b). The claims, as the Fund and/or the Employer elsewhere states, are said to be for damages for breach of contract. But (a) is more: it requires of the PFA to change the terms of a contract. The same applies to (b) but there are addi�onal problems: ﬁrst, the Employer or the Fund cannot lay complaints or claims on behalf of Fund members and second, the prayer is open-ended.

18	The PFA stated explicitly and correctly, and the Fund/Employer did not take issue with this: 

It is trite law that the Adjudicator does not have jurisdic�on to make orders of damages. Although, in respect of maters that fall within its jurisdic�on it has the power to make orders which any court of law may make, it does not mean that it is a court of law (see Cohen v The Pension Funds Adjudicator and Others (decided on 25 April 2019) and Joint Municipal Pension Fund and Another v Grobler and Others [2007] 4 All SA 855 (SCA) at para 27) Thus, the Adjudicator has no authority in terms of its enabling legisla�on to grant damages and cost orders. 

19	It is necessary to men�on the other basis of the PFA’s decision of lack of jurisdic�on, namely that the complaint was not covered by the deﬁni�on of “complaint” in sec 1 because, in performing its contractual obliga�ons to deal with the sec 14 and 18 maters, Liberty was not administering the Fund within the meaning of that term in the Act. Administering a fund in the context of the Act, the PFA held, related to the func�ons set out in sec 13B, and not to other administra�ve tasks because of an agency or mandate agreement. This issue was fully debated and decided in Cohen v The Pension Funds Adjudicator and Others – and the PFA was correct.

20	The Fund ﬁnally submited that if the complaint fell outside of the PFA’s jurisdic�on, then it should at least fall within the jurisdic�on of the Tribunal. That assump�on is incorrect. The Tribunal does not have original jurisdic�on. If the decision-maker did not have jurisdic�on, the Tribunal does not have. Apart from the fact that this is obvious, it is conﬁrmed by sec 234(1): if the Tribunal would uphold the applica�on for reconsidera�on, it must remit it to the PFA for reconsidera�on – and to remit it to a body or func�onary without jurisdic�on would amount to a brutum fulmen – an empty and ineﬀec�ve act.

21	ORDER: The applica�on for reconsidera�on is dismissed.

Signed on behalf of the Tribunal on 30 August 2023

LTC HARMS (deputy chair)