A woman, who took care of her late aunt’s husband, took the Pension Fund Adjudicator (PFA) to the Financial Services Tribunal (FST) after she was allocated 30% of his provident fund.
The late Govinda Naidoo was a member of the Textile Industry Provident Fund and he passed away in July 2022.
By virtue of his membership, a death benefit in the amount of around R312,000 became available.
Naidoo lived with Phyllisha Reddy, who is related to his late wife. Reddy took care of Naidoo while he was sick, until he ultimately passed on.
After his death, Reddy approached the Textile Industry Provident Fund and claimed 100% from Naidoo’s provident fund.
She claimed that Naidoo had nominated her as the sole beneficiary, saying she was financially dependent on him, and he resided with her for about 20 years before his passing.
An investigation was conducted before releasing the funds and Naidoo's son, daughter and mother were subsequently identified by the provident fund.
After the location of other dependants, the funds were allocated as follows: Reddy got 60%, Naidoo's son got 10%, his daughter got 20% and his mother was given 10%.
Reddy was unhappy with the distribution, and said that Naidoo's wishes were being disregarded and argued that his children as well as his mother, were not his dependants.
She said she lived with Naidoo and cared for him. She was unemployed and received financial assistance from her husband and father to pay Naidoo's medical bills when his health declined.
However, the provident fund board found that Reddy received financial assistance from her husband and father to take care of Naidoo.
As a result, the allocation was revised as follows: Reddy got 30%, Naidoo's son got 10%, his daughter got 40%and his mother got 20%.
Reddy was deeply aggrieved and maintained that 100% of the benefit ought to be allocated to her to honour Naidoo's wishes.
She then lodged a complaint with the PFA, which was dismissed.
The PFA said that when dealing with payments of death benefits, it had an obligation to conduct a thorough investigation to determine the beneficiaries and decide on an equitable distribution and by doing that, irrelevant facts must be ignored.
It added that its duty was to determine whether the board acted rationally and arrived at a proper and lawful decision. It's duty was not to decide what was the most fair or most generous distribution.
Unhappy with the PFA’s response, Reddy sought relief at the FST.
The FST said Reddy doesn't challenge the PFA's compliance with its obligations. Instead, her complaint was that the PFA incorrectly exercised its discretion to determine an equitable distribution and therefore the adjudicator erred in dismissing her complaint
“We have highlighted that the scope of the discretion vesting in the board is broad. It is our view that the exercise of that discretion and the subsequent reasoning and decision by the adjudicator are unassailable,” read the ruling by the FST.
“In the circumstances, the application for reconsideration cannot succeed.”