Adjudicator cracks the whip

PENSION FUNDS: THREE CASE RULINGS DETAIL HOW PROVIDENT FUNDS CAN BE USED AND ABUSED

- Written and edited by Ina Opperman

The annual report of the Pension Funds Adjudicator was released recently, showing how the adjudicator cracks the whip on behalf of consumers to ensure that the rights of consumers of pension products and services are protected and they are treated fairly within the prescripts of the law.

These are three of the cases she worked on in the past year where she had to decide whether the consumer, the fund or the employer was correct:

A consumer complained after he found that his pension fund paid out his pension while he was in jail although he was not the person it was paid to. His pension of R800 000 was paid to a syndicate that impersonated him.

However, the photo on the identity document provided to the fund was not his, while the consumer also complained that the fund relied on an affidavit, allegedly deposed by him and issued by the department of correctional services, which was neither signed nor stamped.

The fund also accepted a withdrawal claim form that contained errors and the consumer proved his case by providing a copy of the bank statement where the money was paid into that the account did not belong to him.

Although the fund checked with his previous employer if he was still in jail, it appeared that someone created an email address using his name and sent claim documents to the fund from this email address.

The fund responded with instructions to the fraudster who replied accordingly. The fund then did a telephonic validation with the bank to confirm the account status. The fund paid over the R800 000.

A few months later, the bank informed the fund that the payment could be part of a syndicate that was involved in identity theft and unlawfully claiming benefits of retirement fund members.

According to the fund it notified its internal forensic department, which resulted in a formal criminal complaint reported to the police, but the criminal complaint was closed as undetected.