Alexander Forbes Retirement Fund ordered to pay out benefit from 2013

By Martin Hesse Time of article published Jul 8, 2021

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The Pension Funds Adjudicator, Muvhango Lukhaimane, has ordered the Alexander Forbes Retirement Fund to pay out a man's withdrawal benefit to which he became entitled in 2013.

The reason provided by the fund for not paying the benefit was that the withdrawal form had not been signed by the man’s employer, Scoin Trading.

In a complaint to the adjudicator's office, Mr C stated that he completed the withdrawal claim form in 2017. However, the employer refused to sign the form. He further stated that he completed another withdrawal claim form provided to him by the fund in January 2021, to no avail.

The fund stated that when it received the complaint, it was not in possession of Mr C's withdrawal claim form. It said it contacted the employer and informed it to urgently submit the form. However, it is yet to receive a response.

The fund said it has not received a specific reason from the employer for refusing to sign Mr C’s withdrawal benefit. However, it said that fraud had occurred in the department managed by Mr C and that the employer wanted to recover the loss it incurred from his withdrawal benefit.

The adjudicator found that the facts indicated that the fund did not receive any instructions from the employer to withhold the withdrawal benefit and Mr C was not made aware of the fraud allegations levelled against him. The employer did not even lodge a criminal case against Mr C or advance any case that warranted the withholding of his benefit.

The employer’s submissions were found to be without any merit. The adjudicator said almost eight years had passed since Mr C left his employer and this was a clear abuse of process by the employer.

The adjudicator's office says: "The determination comes at a time in the retirement funds industry where the issue pertaining to the withholding of withdrawal benefits at the behest of the employer has sparked debate. Several adjudicator findings as well as that of the Financial Services Tribunal have found that in order to prevent abuse of the process by the employer, funds must act with care and consider representations by the member about why the benefit should not be withheld. The current determination is a prime example of how this process can be abused."

The adjudicator ordered Mr C to provide the fund with all documents necessary for his benefit to be paid and ordered the fund to make payment thereafter of the benefit together with interest.


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