Pension fund faces backlash for ignoring member's withdrawal instructions

A PROVIDENT fund has come under fire from the Pension Funds Adjudicator (PFA) for paying out a member's withdrawal benefit without his consent and for failing to comply with the rules of the fund and the Pension Funds Act.

- SIPHESIHLE BUTHELEZI

In a ruling handed down by Adjudicator Muvhango Lukhaimane, the South African Commercial Catering and Allied Workers Union (SAC-CAWU) National Provident Fund was found to have acted "in contravention of the rules" after processing a benefit payout despite the member's request that his money be transferred to an annuity account.

The complainant, a former Pick n Pay employee who worked at the retailer from December 2017 to November 2023, told the adjudicator that he had instructed the fund to transfer his full benefit to an EasyEquities annuity account because it was tax-free. Instead, the fund paid him a withdrawal benefit of R23 322.36 on 2 February 2025, while R30 000 was transferred into a retirement annuity on the same date.