The Office of the Pension Funds Adjudicator in South Africa considered a complaint about a pension fund's failure to pay a pensioner's monthly pension for several months. The case highlights the responsibility of pension funds to ensure that pension benefits are paid correctly and timeously, and the consequences where administrative failures result in prejudice to pensioners.
Facts
Mr J Exenberger was a member of the Motor Industry Provident Fund from July 1997 until his retirement. After retiring in March 2017, he began receiving a monthly pension from the fund.
Mr Exenberger resides in Austria, and the complaint was submitted on his behalf by his daughter, Ms E Goldbach.
From August 2024 to February 2025, Mr Exenberger did not receive his monthly pension payments. Despite repeated enquiries to the fund, the matter remained unresolved, prompting a complaint to the Pension Funds Adjudicator.
The Complaint
The complainant alleged that the pensioner had not received his pension payments for several months, despite being entitled to them as a fund pensioner.
The complainant requested that the Adjudicator investigate the fund's failure to make the payments and ensure payment of the outstanding pension amounts.
To assist with resolving the matter, the complainant also submitted proof of the pensioner’s bank account details, indicating that these details had previously been provided to the fund.
The Law
The Adjudicator referred to principles governing pension funds, including the principle that a pension fund's rules constitute its governing constitution. Pension funds must therefore act strictly in accordance with their rules.
The fund’s rules required that, once a member retires and becomes entitled to a pension, monthly pension payments must be made to the pensioner from the pension account.
The Adjudicator also relied on section 30N of the South African Pension Funds Act, which empowers the Adjudicator to order interest on outstanding amounts when a fund has failed to pay benefits timeously.
The Fund’s Explanation
The fund acknowledged that the pensioner was entitled to receive his monthly pension. However, it argued that the failure to make payments arose from a technical problem with the pensioner’s bank account, which resulted in the rejection of the payments.
The fund further indicated that it attempted to process a back payment of R72 394.55 to cover the missed pension payments, but the bank also rejected this transaction.
According to the fund, it required bank confirmation before processing the payment.
Ruling of the Adjudicator
The Adjudicator found that the pensioner had been prejudiced by the fund’s failure to resolve the matter and ensure payment of the pension.
While the fund had explained that the payment failures were linked to banking issues, the Adjudicator held that the matter remained the fund’s responsibility to resolve promptly, particularly where a pensioner relies on regular pension income.
The Adjudicator described the fund’s conduct as reprehensible, noting that the matter had remained unresolved for an extended period despite the complainant providing the required banking information.
The fund was therefore ordered to:
Pay the outstanding pension amount of R72 394.55,
Facts
Mr J Exenberger was a member of the Motor Industry Provident Fund from July 1997 until his retirement. After retiring in March 2017, he began receiving a monthly pension from the fund.
Mr Exenberger resides in Austria, and the complaint was submitted on his behalf by his daughter, Ms E Goldbach.
From August 2024 to February 2025, Mr Exenberger did not receive his monthly pension payments. Despite repeated enquiries to the fund, the matter remained unresolved, prompting a complaint to the Pension Funds Adjudicator.
The Complaint
The complainant alleged that the pensioner had not received his pension payments for several months, despite being entitled to them as a fund pensioner.
The complainant requested that the Adjudicator investigate the fund's failure to make the payments and ensure payment of the outstanding pension amounts.
To assist with resolving the matter, the complainant also submitted proof of the pensioner’s bank account details, indicating that these details had previously been provided to the fund.
The Law
The Adjudicator referred to principles governing pension funds, including the principle that a pension fund's rules constitute its governing constitution. Pension funds must therefore act strictly in accordance with their rules.
The fund’s rules required that, once a member retires and becomes entitled to a pension, monthly pension payments must be made to the pensioner from the pension account.
The Adjudicator also relied on section 30N of the South African Pension Funds Act, which empowers the Adjudicator to order interest on outstanding amounts when a fund has failed to pay benefits timeously.
The Fund’s Explanation
The fund acknowledged that the pensioner was entitled to receive his monthly pension. However, it argued that the failure to make payments arose from a technical problem with the pensioner’s bank account, which resulted in the rejection of the payments.
The fund further indicated that it attempted to process a back payment of R72 394.55 to cover the missed pension payments, but the bank also rejected this transaction.
According to the fund, it required bank confirmation before processing the payment.
Ruling of the Adjudicator
The Adjudicator found that the pensioner had been prejudiced by the fund’s failure to resolve the matter and ensure payment of the pension.
While the fund had explained that the payment failures were linked to banking issues, the Adjudicator held that the matter remained the fund’s responsibility to resolve promptly, particularly where a pensioner relies on regular pension income.
The Adjudicator described the fund’s conduct as reprehensible, noting that the matter had remained unresolved for an extended period despite the complainant providing the required banking information.
The fund was therefore ordered to:
Pay the outstanding pension amount of R72 394.55,
- Pay interest at 15.5% per annum calculated from August 2024 until the date of payment,
- Pay R5 000 in compensation to the pensioner for the inconvenience caused by the delay, and
- Provide a full breakdown of the payment to the complainant.
Relevance for Namibian Pension Funds
Although this determination arises from the South African pension system, the principles are equally relevant to pension funds in Namibia.
Firstly, pension funds have a fiduciary duty to administer benefits diligently and efficiently. Pensioners depend on their monthly pension payments, and administrative failures can have serious financial consequences.
Although this determination arises from the South African pension system, the principles are equally relevant to pension funds in Namibia.
Firstly, pension funds have a fiduciary duty to administer benefits diligently and efficiently. Pensioners depend on their monthly pension payments, and administrative failures can have serious financial consequences.