FST case summary involving Weir and FNB Pension Fund

By Shamaa Sheik

The following matter was heard in the Financial Services Tribunal on 16 November 2019:

• Angus Robert Weir (Applicant) and FNB Pension Fund (1st Respondent); Momentum Retirement Administrators (2nd Respondent); and Wesbank Division of First National Bank Ltd (3rd Respondent) and Pension Fund Adjudicator (4th Respondent) – case number: PFA61/2019

Fast facts

Financial Sector Regulation Act – s 230 – application for reconsideration of Pension Fund Adjudicator decision – time-barring
Pension Funds – voluntary retrenchment pay-out – application to convert retirement benefit to lump sum payment

Summary

Background

The applicant in this matter sought a reconsideration of a decision by the Pension Fund Adjudicator (the PFA) in terms of s 230 of the Financial Sector Regulation Act 9 of 2017 (the FSR Act).
The PFA had refused to address a complaint by the Applicant on grounds that the complaint was filed out of time and had therefore become time barred.

Circumstances leading to the application

The Applicant was employed by Wesbank from 2007 and as Wesbank is a subsidiary of First National Bank, he became a member of the FNB Pension Fund. In May 2014, Wesbank made an offer to employees who were 55 years and above where they could apply to go on early retirement. The Applicant, who was 56 years old at the time, accepted this offer and shortly thereafter, Wesbank began processing the early retirement which was finalised by the end of September 2014.

The applicant claimed that his pension exit claim forms was only signed and delivered in the first week of March 2015. Wesbank then signed the forms as the fund employer on 18 March 2015.

When the application was brought to the Tribunal, the applicant stated that he was not in a good frame of mind when he accepted Wesbank’s offer and that he did not consider the consequences of the decision that he took. After receiving a first tranche of payment in April 2015, and then an annuity, the applicant realised that the funds were insufficient for his financial needs and sought to convert his retirement benefit to a lump sum payment.

After several attempts to reverse the early retirement the applicant was blocked by the legal division of Momentum Retirement Administrators. In December 2017, he then lodged a complaint with the PFA who, after investigating the matter, advised that the PFA lacked jurisdiction to hear the matter as it had become time barred.

The PFA explained that she calculated the running of the period leading to her being time barred to hear the complaint from the date of Applicant's retirement which commenced on 1 October 2014. The Applicant argued that this period should be calculated from the date on which he submitted his pension claim forms to the Pension Fund which was in April 2015.

The issue

The issue for determination was whether time-barring or prescription starts running on the actual date of Applicant’s retirement from employment with Wesbank or whether it starts running on submission of his pension exit forms to the Pension Fund.

Statutory framework

The Tribunal highlighted that the rules of a Pension Fund are binding on all parties to a Pension Fund and that this stance was validated in case law as well. The rules of the pension fund, in particular, the clauses dealing with the issue of the time barring, were made available to the PFA to assist her investigation.

Section 301 of the Pension Funds Act bars the PFA from investigating a complaint if the act or an omission to which it relates occurred more than three years before the date on which the complaint is received by her in writing.

Time-barring in the Pension Funds Act is subject to the Prescription Act in the calculation of a 3-year period in respect of a debt.

Findings

The Tribunal found that in this instance, time barring ran from 1 October 2014. The time-barring process or prescription ran its course on 30 September 2017. The Applicant’s complaint was received by the PFA on 4 December 2017, which was two and a half months after the process had run its course.

The Tribunal accordingly agreed with the decision of the PFA that when the complaint was lodged with her on 4 December 2017, she had no jurisdiction to hear the matter.

Order

The application was dismissed. No order as to costs was made.

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The law

• Financial Sector Regulation Act 9 of 2017 – ss 230
• Pension Funds Act 24 of 1956 – s 301
• Prescription Act 68 of 1969

Cases referenced

• Black v Corporate Selection Retirement Fund [2001] 11 BPLR 2665 (PFA)
• Tek Corporation Provident Fund and Others v Lorentz [2000] 3 BPLR 227 (SCA)

Full text of the Decision