- Carl Francois Conradie claimed R15.45 million, arguing that a pension fund’s delayed disinvestment caused him heavy losses. The tribunal found, however, that the fund had followed its rules.
- Kevin Michael Leon claimed his retirement annuity included a guaranteed R1.5 million payout, but the tribunal found that neither policy actually offered such a guarantee.
- Patrick Jabu Msibi tried to claim an extra R97,973.73 after an Eskom pension fund error was fixed. However, the tribunal found he had already chosen between two available benefit options.
The Financial Services Tribunal has turned down three pension disputes that focused on large retirement benefits in separate reconsideration applications. The disputes involved claims for R15,449,699.96, an alleged R1.5 million retirement guarantee, and an additional R97,973.73.
In all three cases, the tribunal found that the applicants had not given enough reason to overturn the decisions made by the Pension Funds Adjudicator.
R15.4 million claim fails as fund met seven-day rule
Conradie challenged the Pension Funds Adjudicator’s decision to dismiss his complaint against the FundsAtWork Umbrella Pension Fund and Momentum Metropolitan Life Limited. His employment ended on 31 January 2022 after nearly 29 years. He had been a pension fund member the whole time and had also made extra voluntary contributions towards his retirement.
In April 2022, Conradie decided to withdraw his retirement benefits. He took about R1.1 million as a cash lump sum and transferred the rest to buy a living annuity. He argued that the fund delayed the disinvestment process, which caused him financial losses as the value of his retirement savings dropped.
He wanted the court to declare 26 April 2022 as the accrual date and set the value of his withdrawal benefit at R15,449,699.96. The dispute focused on whether the fund received a valid withdrawal notice on 26 April.
The fund admitted it received the notice on that date, but said the form was incomplete. It was missing some required information, Section 6(d) wasn’t filled out, and the employer’s signature was absent. The fund said these issues were fixed by 4 May 2022, and it began the disinvestment process on 9 May.
The tribunal panel, made up of C Woodrow SC, M Mphaga SC and Z Nkubungu-Shangisa, found that the fund’s rules required a fully completed and valid withdrawal form, signed by both the employer and member, before it could count as a valid withdrawal notice.
More importantly, even using Conradie’s own version with 26 April as the starting date, the tribunal found the fund started the disinvestment process on 9 May, which was still within the seven-day window required by its rules.
“Even by the applicant’s account, the fund followed its rules by starting the disinvestment process on 9 May 2022,” the tribunal said. So, the fund was not responsible for any negative returns during the disinvestment process.
The tribunal also dismissed Conradie’s other arguments, including his claim that the adjudicator used a “phantom rule” and his concerns about the missing employer signature and maladministration. Although the adjudicator quoted the wrong version of the rule, the tribunal found that this error did not affect the outcome because the fund had still met the seven-day requirement. The tribunal dismissed the reconsideration application.
No evidence of R1.5 million retirement guarantee
Leon brought his reconsideration application against Liberty Group Limited, the Lifestyle Retirement Annuity Fund, and the Pension Funds Adjudicator. His dispute was about two retirement annuity policies.
The first policy started in July 2013. It stated that the retirement benefit would be the investment value on the day he retired, subject to any investment performance guarantee that applied. But the guarantee only applied if the member chose a portfolio with an investment performance guarantee and paid the extra charges.
Leon did not do this. His policy summary clearly said “No guarantee.” The new policy also listed R0.00 in guaranteed portfolios. Still, Leon said a Liberty consultant told him during a phone call in June 2023 that his policy was guaranteed to pay out R1.5 million at retirement.
He also referred to a supposed 2017 policy update, which he claimed confirmed the guarantee. However, at the tribunal hearing, Leon admitted that neither policy actually included a guarantee. The tribunal found that this admission was central to his case. “The applicant had to prove that the guarantee existed to support his complaint,” the tribunal said.
The tribunal found that Leon’s rights were set by the written policies and fund rules, and neither provided a guaranteed retirement amount. It also rejected his reliance on the supposed phone conversation. Liberty said the call recording didn’t mention any guaranteed amount. The recording was given to Leon’s former lawyers as early as September 2024, and Liberty had offered him access to it again.
The tribunal also found that even in Leon’s version of events, the consultant was reading from the online policy, which already stated “No guarantee.” “A call-centre agent’s comment can’t change a policy or its rules,” the tribunal said.
The R1.5 million amount actually came from a different source. Records showed Leon had separately accepted R1.5 million in life cover under a Lifestyle Protector policy, which was just a risk-only death benefit with no investment part. The tribunal also found that the wrong retirement date, recorded when Leon’s policy was moved, had no legal effect.
Leon was already over 55 and could retire at any time. The adjudicator also ordered the fund to correct the retirement date to 1 July 2027, and the respondents confirmed they had done so. The tribunal dismissed Leon’s reconsideration application.
Claim for extra R97,973.73 fails after Msibi chose correction option
Msibi’s application came from an administrative mistake by the Eskom Pension and Provident Fund. Msibi had two membership records with the fund after separate periods of working at Eskom. He finally retired on 31 August 2024.
For his first record, he chose to get a maximum tax-free lump sum of R550,000 and a monthly pension. For the second record, he picked a one-third lump sum of R1,212,239.27 and a monthly pension of R17,198.40. The fund processed the first record incorrectly, giving him a one-third lump sum instead of the R550,000 he had chosen.
The fund later spotted the mistake and offered Msibi two ways to fix it. The first option restored his original retirement choice, giving him total lump sums of R1,762,239.27 and a combined monthly pension of R42,352.26.
The second option would leave the first record as it was and change the second record, giving total lump sums of R1,915,323.22 but a lower monthly pension of R41,266.33. The fund also offered an extra R97,973.73 with the second option. Msibi picked the first option.
The fund then cancelled the wrong tax directive, got a new one, and paid him the correct lump sums and monthly pension according to the option he chose. Still, Msibi continued to complain and tried to claim the extra R97,973.73, saying the original mistake had harmed him.
The tribunal found that the R97,973.73 was not an extra benefit that could be added to the first option. The two options were different ways to fix the original error. “You can’t treat the two options as if you could get both benefits,” the tribunal said.
Msibi chose the first option, which restored his original retirement choice and gave him the higher monthly pension. The Tribunal found he could not keep that benefit structure and also claim the extra lump sum from the other option. “After choosing the first option, he can’t later act as though he’s entitled to the second one as well,” the tribunal said.
The tribunal agreed that the fund made an initial mistake, but said the error was identified and fixed, and Msibi received the correct benefits for the option he picked. “Just because there was an error doesn’t mean he’s owed more money once the error is fixed,” the tribunal said.
The tribunal found no serious mistake in the Pension Funds Adjudicator’s decision and dismissed Msibi’s reconsideration application.
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