LEGAL SNIPPETS. Is a death benefit payable for an incorrectly enrolled member?

Determination by the South African Pension Funds Adjudicator in the case of HD Auret ("complainant") v Metal Industries Provident Fund ("fund"):

Facts Undisputed by the Parties:

Mr. GA Auret ("deceased") was erroneously registered as a member of the Metal Industries Provident Fund due to his employment with Stylestar Engineering CC from 1 July 2017 to 20 September 2020. The employer previously retrenched him in May 2016 at age 64. He was eligible for early retirement under the Fund rules, so he proceeded on early retirement. He was then re-employed by the Employer after he had turned 65, the Fund’s normal retirement age, and he and his employer started to contribute again. The Fund issued regular benefit statements after that.

The employer and the member contributed to the fund from 1 July 2017 until the member died.

The complainant, the deceased's surviving spouse, was initially informed of a death benefit of N$ 1,010,108 but was later told it was not payable due to a previous payout from the fund.

The complaint revolves around the non-payment of the death benefit to the complainant after the deceased's passing.

Disputed Facts:

The complainant argues that the deceased should have received a death benefit of R1,010,108.51.

The fund argues that the deceased received an early retirement benefit in 2016, making him ineligible for a death benefit upon re-joining the fund after the normal retirement age of 65. The fund offered to refund the member’s contributions and interest of N$141,613.

Complainant's Arguments:

The deceased was retrenched from Coalfields Supplies and Service in 2016 and received a benefit.

After joining the Metal Industries Provident Fund, the deceased was informed of a death benefit due to the complainant.

Later, the fund informed the complainant that no death benefit was payable, citing fund rules.

The complainant argues the fund should have informed the deceased he did not qualify, and the offer to repay contributions is insufficient.

Fund's Arguments:

The deceased received an early retirement benefit in 2016.

Fund rules state no death benefit is payable after retirement, and after a benefit has been paid, it is in full and final settlement of the fund’s obligations.

The fund offered to pay the amount held for the deceased's estate, subject to legal requirements.

Adjudicator's Determination:

The fund’s rules are its constitution and must be observed strictly.

The deceased did not meet the eligibility criteria for fund membership since he re-joined after reaching normal retirement age (65).

The fund failed to properly screen members, accepting the deceased's membership against its rules.

The Adjudicator found the complainant's claim for damages against the fund unfounded since no contract bound the deceased to the fund's rules.

The Adjudicator lacks jurisdiction to order damages, as established in previous cases.

The fund is ordered to refund all contributions made on behalf of the deceased, plus interest, to the deceased's estate within two weeks.

Read the determination, here: https://www.pfa.org.za/Determinations/20232024/Auret%20v%20Metal%20Industries%20Provident%20Fund.pdf