Lebogang Mogashoa, Pension Funds Adjudicator
With the imminent arrival of twins, necessitating a larger family vehicle, a pension fund member was compelled to seek external vehicle finance after repeated requests to withdraw a portion of his savings went unanswered.
In his complaint to the Pension Funds Adjudicator (PFA), the member stated that the lack of communication and unfulfilled commitments from both the Alexander Forbes Retirement Fund – Preserved Provident Section and the Alexander Forbes Retirement Income Solution Fund had placed his family under significant financial and emotional strain.
He said the fund had repeatedly failed to honour its service-level commitments and timelines, despite his numerous follow-up attempts. On several occasions, he was informed that his withdrawal claim was still “in progress” and awaiting information from a broker – although he maintained that he did not have a broker.
He further stated that the complete lack of communication from the fund forced him to make alternative financial arrangements, resulting in significant and unforeseen costs.
The complainant submitted that he initially contacted the fund on 2 September 2024 to request a partial withdrawal from his funds, intending to transfer the remaining amount to his Retirement Annuity (RA).
He said between September 2024 and November 2024, he made numerous attempts to follow up with the fund for an update on the claim’s status. His efforts included repeatedly sending emails to the fund and spending over 250 minutes on hold with their call centre.
He was paid a withdrawal benefit of R554 350.00 on 15 November 2024. An amount of R115 650.00 was paid to the South African Revenue Service in respect of tax.
The complainant submitted that had the fund provided him with information timeously, he could have made more informed decisions and avoided unforeseen expenses. As a result, he had to finance the purchase of a new vehicle, which he specifically needed to safely transport his soon-to-be three children.
He stated that the vehicle finance would cost him an estimated additional R300 000. He also incurred R10 000 in credit charges to cover medical check-ups, as funds that were intended for these expenses had to go toward the vehicle deposit.
He submitted that he had initially planned to use his available funds to cover nursery school fees in 2025. With a significant portion of his budget redirected to vehicle payments, he was left with the added burden of finding alternative means to cover these essential educational expenses.
The fund submitted that it was unable to finalise the claim as there were outstanding documents, and the Recognition of Transfer (“ROT”) document was outstanding from the complainant’s broker.
It stated that while the ROT remained outstanding, the payment of R554 350.00 was made to the complainant on 15 November 2024.
The complainant said the claim was handled by himself in his personal capacity; there was no adviser or broker involved in the process. He said there had been no request to him from the fund for documents. He said the fund should have requested documents from its sister RA fund. He stated that the failure for the fund to communicate within the same organisation should not directly affect the members.
He said on 2 December 2024, a transfer form was sent to him for completion. After completing the form, on 22 January 2025 he had still not received the transfer of funds to his RA.
The fund submitted that following the receipt of the ROT and all required documents, the transfer of R936 882.13 to the RA fund was made on 13 March 2025.
The complainant submitted that his complaint was not solely about the eventual transfer and withdrawal of funds, but about the unacceptable delays, misinformation, lack of internal co-ordination, and unresponsiveness from the fund, which had both financial and emotional consequences.
The PFA said in a determination that the complainant was paid R554 350.00 on 15 November 2024 which is after two months of receiving a claim from the complainant.
“It is clear that the fund failed to timeously pay the complainant’s benefit in terms of the service level standard.
“The fund submitted that a ROT was sent to the receiving fund (the complainant’s existing RA fund) for completion on 8 October 2024 and it sent reminders to the receiving fund for feedback on 24 October 2024 and 1 November 2024.
“It stated that on 4 November 2024 and 11 November 2024 the receiving fund provided feedback raising queries and requesting certain documents required in terms of the Financial Intelligence Centre Act. However, it only sent a transfer form to the complainant on 02 December 2024, which is almost after three months of receiving an instruction to transfer.
“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 has contributed to the delay in the payment of the complainant’s benefit,” the PFA said.
It was also noted by the PFA that the fund stated that with regard to the portion of the benefit that needed to be transferred to the RA fund, it stated that it made extensive efforts to expedite payment of the claim in respect of the complainant but was reliant on feedback from the receiving fund, which was only received approximately five months after it was initially requested.
“The fund had a legal duty to pay the complainant’s withdrawal benefit timeously. The fund did not provide any cogent reason for the delay in paying the complainant’s withdrawal benefit. Consequently, the fund’s conduct was wrongful and negligent,” the PFA said in the determination.
The fund was ordered to pay the complainant 50% of the interest incurred on the financing of the new vehicle and to pay the complainant interest incurred as a result of medical aid bills of R4 841.60 and R5 266.60 paid using his credit card.
The RA fund was ordered to pay the fund the investment loss suffered (if any) as a result of its delay.
ENDS
Ed’s note: Watch EBnet.Stream’s Exec Meet & Greet with Lebogang Mogashoa, Pension Funds Adjudicator, here.
