- A pension fund member expecting twins had to finance a larger vehicle after the Alexander Forbes Retirement Fund delayed processing his withdrawal request.
- The Pension Funds Adjudicator found the fund failed to meet its service standards and did not communicate properly with the member.
- The fund was ordered to pay part of the vehicle finance interest and reimburse credit card interest related to medical expenses incurred during the delays.
A pension fund member expecting twins was forced to take out vehicle finance for a larger car after delays by the Alexander Forbes Retirement Fund in processing his request to withdraw part of his retirement savings.
The Office of the Pension Funds Adjudicator found that the fund failed to pay the benefit within its service standards, causing significant financial consequences for the member and his family.
The complaint was lodged against the Alexander Forbes Retirement Fund Preserved Provident Section and the Alexander Forbes Retirement Income Solution Fund. The complainant said repeated requests to access his retirement savings went unanswered while he was preparing for the arrival of twins and urgently needed a larger vehicle to safely transport his growing family.
He told the adjudicator that the delays and lack of communication from the fund placed his family under considerable financial and emotional strain. Despite several follow-up attempts, he was repeatedly told his withdrawal claim was still “in progress” and awaiting information from a broker, even though he had no broker involved in the process.
Repeated follow-ups and delayed payment
The complainant explained that he first contacted the fund on 2 September 2024 to request a partial withdrawal while planning to transfer the remaining balance to his retirement annuity. Between September and November 2024, he repeatedly sought updates, sending emails and spending over 250 minutes on hold with the fund’s call centre.
The withdrawal benefit of R554,350.00 was eventually paid on 15 November 2024, with R115,650.00 deducted for tax and paid to the South African Revenue Service.
By the time payment was made, the complainant stated that he had already been forced to secure vehicle finance to purchase a larger vehicle before the twins’ birth, estimating that the arrangement would ultimately cost him an extra R300,000. He also used funds earmarked for medical check-ups as a vehicle deposit, incurring about R10,000 in credit card charges to cover those medical expenses.
He had also planned to use part of his savings to pay nursery school fees in 2025, but with much of his budget now going to vehicle instalments, he faced the added burden of finding other ways to cover education costs.
Fund blames outstanding documentation
The Alexander Forbes Retirement Fund argued it could not finalise the claim earlier due to outstanding documents, specifically the Recognition of Transfer from the complainant’s broker. Despite this, payment of R554,350.00 was made on 15 November 2024.
The complainant disputed this, telling the adjudicator he managed the claim himself and had no adviser or broker. He said the fund had never asked him for documents and should have obtained any necessary information from its own retirement annuity fund.
He further stated that communication failures between funds within the same organisation should not affect members. On 2 December 2024, he received a transfer form to complete, but even after submitting it, he had still not received confirmation of the transfer by 22 January 2025.
The fund later confirmed that, once all documents were received, an amount of R936,882.13 was transferred to the retirement annuity fund on 13 March 2025.
Adjudicator finds fund failed its duty
In her determination, the Pension Funds Adjudicator found that the withdrawal benefit was paid two months after the claim was submitted and that the fund failed to meet its own service standards.
“It is clear that the fund failed to timeously pay the complainant’s benefit in terms of the service level standard,” the adjudicator said.
She noted that the fund sent the Recognition of Transfer to the receiving annuity fund on 8 October 2024 and sent reminders on 24 October and 1 November 2024. On 4 and 11 November, the receiving fund requested further documents required under the Financial Intelligence Centre Act.
However, the transfer form was only sent to the complainant on 2 December 2024, nearly three months after the transfer instruction was received. “Further, the facts show that this was only communicated to the complainant’s correct email address on 12 December 2024. Therefore, it is clear that the fund’s failure to update its record contributed to the delay,” the adjudicator said.
The adjudicator rejected the fund’s explanation for the delays, finding its conduct wrongful and negligent.
Compensation ordered
As a result, the Alexander Forbes Retirement Fund was ordered to compensate the complainant for half of the interest incurred on the vehicle finance, as well as reimburse interest on medical expenses paid by credit card (amounts of R4,841.60 and R5,266.60).
The retirement annuity fund was also ordered to compensate the retirement fund for any investment loss suffered due to delays in transferring the funds.
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