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THE FINANCIAL SERVICES TRIBUNAL

 

Case No. PFA34/2023

 

In the matter between:

NOZIPHO JUDITH JAMES                                      APPLICANT

and

SOUTH AFRICAN LOCAL AUTHORITIES

PENSION FUND                                                      FIRST RESPONDENT

 

FAIRSURE ADMINISTRATION (PTY) LTD             SECOND RESPONDENT

 

KOPANONG MUNICIPALITY                                  THIRD RESPONDENT

 

THE PENSION FUNDS ADJUDICATOR                 FOURTH RESPONDENT

 

 

Summary: Reconsideration of a decision of the Pension Funds Adjudicator (30M) in terms of Section 230 of the Financial Sector Regulation Act 9 of 2017.

 

 

DECISION

 

 

A.      INTRODUCTION

 

1.          The Applicant is Nozipho Judith James.

 

2.          The First Respondent is the South African Local Authorities Pension Fund ("the Fund"). The Fund is registered and approved and is subject to the provisions of the Pension Funds Act 24 of 1956 ("the PFA").

 

3.          The Second Respondent is Fairsure Administration (Pty) Ltd. The Second Respondent provides administration services to the First Respondent.

 

4.          The Third Respondent is the Kopanong Municipality ("Kopanong").

 

5.          The Fourth Respondent is the Pension Funds Adjudicator ("the Adjudicator"), the statutory ombud as defined in section 1(1) of the Financial Sector Regulation Act 9 of 2017 ("FSR Act") and is established in terms of the PFA.

 

6.          The Applicant's deceased husband was a member of the Fund and employed by Kopanong from 1 September 2014 until his death on 21 May 2017.

 

7.          Section 230 of the FSR Act provides the basis for an Applicant to lodge an application for reconsideration and seek appropriate relief. This is an application of the aforementioned section against the decision taken by the Adjudicator in terms of Section 30M of the PFA.

 

8.          The parties have waived their right to a formal hearing, and this is the decision of the Tribunal.

 

B.      THE FACTS

 

9.          This is an application for the reconsideration of the Adjudicator's decision relating to the Fund's non-payment of the group life assurance benefit ("insured portion") following the death of the deceased.

 

10.     Kopanong failed to remit the premiums in respect of the insured portion to the Fund despite deducting provident fund contributions from the deceased. As a result of this non-payment, the benefit lapsed. Accordingly, the Fund did not pay the insured portion following the death of the deceased.

 

11.     The gravamen of the Applicant's complaint is that she believes that notwithstanding not having received the provident fund contributions, the Fund should still make payment of the benefit.

 

12.     The Adjudicator disagreed with the Applicant and ordered:

 

"6.1 In the instance, the order of this Tribunal is as follows:

 

6.1.1         The employer is ordered to pay the Fund the amount of R2,219,441.64, representing the insured portion of the death benefit, together with the penalty interest calculated at the rate of 7% per annum from 21 May 2019 to date of payment within four weeks of this determination;

 

6.1.2         The Fund is ordered to provide the complainant with a detailed breakdown of the benefit paid in terms of paragraph 6.1.1 above, within two weeks of making such payment; and

 

6.1.3         The Fund is ordered to pay the death benefit to the deceased's dependants in terms of section 37C of the Act, within eight weeks of this determination."

 

C.      LEGAL PRINCIPLES AND APPLICATION TO THE FACTS

 

13.     It is trite that the Fund's Rules are its constitution and that the Fund can only act in accordance with its rules.

 

14.     The payment of the insured portion by the Fund is subject to inter alia 9.8 of the Fund's Rules, which reads:

 

"9.8 RISK DEATH BENEFITS

 

9.8.1         The FUND shall insure RISK DEATH BENEFITS with a REGISTERED INSURER in terms of the provisions of the POLICY. Such benefit shall be subject to any terms, conditions, restrictions, exclusions and underwriting conditions the REGISTERED INSURER may impose from time to time and set out in the POLICY. A RISK DEATH BENEFIT will only become payable by the FUND once the claim for the RISK DEATH BENEFIT has been approved and paid by the REGISTERED INSURER to the FUND.

 

9.8.2         No RISK DEATH BENEFIT shall be payable should the relevant RISK DEATH BENEFITS insurance premiums required in terms of the POLICY not be paid in full within 30 (thirty) days of such premium falling due."

 

15.     The Fund did not receive the relevant insurance premiums from Kopanong and is precluded in terms of its rules from making payment of the insured portion. Accordingly, the Applicant's application for reconsideration is misplaced. The Applicant's real target should be Kopanong for not having made the payment initially or as ordered by the Adjudicator in the determination.

 

16.     The Adjudicator's determination that Kopanong makes payment to the Fund of the insured portion has the effect of a civil judgment. Section 30(O) of the PFA provides:

 

 

17.     The Applicant is at liberty to instruct her legal advisors to take the appropriate steps to ensure compliance with the Adjudicator's determination, which will have the ultimate effect of the Fund considering an equitable allocation to the deceased's dependents and making payment accordingly.

 

D.      CONCLUSION

 

18.     For the reasons above, the Applicant failed to make a case for interfering with the Adjudicator's determination.

 

ORDER

 

(a)      The application is dismissed.

 

 

Signed on behalf of the Tribunal on 14 September 2023.

 

PJ Veldhuizen

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