THE Office of the Pension Funds Adjudicator (OPFA) has announced that the Financial Services Tribunal has dismissed an application brought by the Municipal Employees Pension Fund (MEPF) asking the Tribunal to reconsider the Pension Fund Adjudicator (PFA), Muvhango Lukhaimane's decision on a complaint by a member relating to pensionable service upon retirement.
This came after a complainant alleged that the MEPF allocated 23 years and two months of services to him while it should have been 41 years and two months.
The OPFA describes itself as a statutory body established to resolve disputes in a procedurally fair, economical, and expeditious manner. It said the adjudicator's office investigates and determines complaints of abuse of power, maladministration, disputes of fact or law, and employer dereliction of duty in respect of pension funds. The OPFA is situated in Pretoria, Gauteng.
According to the OPFA, the complainant had been in government employment for many years and his pension fund benefit was built up as a member of the Government Employees Pension Fund (GEPF) before he changed jobs and transferred his pension to the MEPF.
The complainant alleged that the MEPF failed to take proper account of the effect of the transfer and the transfer value, the OPFA said.
Following the complaint, Lukhaimane upheld the grievance and ordered the MEPF to reverse the buying of services with the complainant’s transfer value from the GEPF to calculate the complainant’s retirement benefit using a pensionable service period of 41 years and two months and pay the balance of the retirement benefit to the complainant.
The OPFA said: “MEPF did not act on the PFA’s determination and also ignored the PFA’s letter of intent, attaching the report of the independent actuary appointed by the PFA. It instead applied to the Financial Services Tribunal for reconsideration of the application.
“In its decision, the Financial Services Tribunal said Rule 47A of the MEPF states, inter alia, that the period of service recognised by the rules of the GEPF shall be regarded as pensionable service by the local authority’s fund. Further, the contributions paid by the member to the GEPF would be regarded as contributions paid to the local authority’s fund.”
The Tribunal said Lukhaimane had said that fairness required that a transferred member must have the same benefits as a comparable member who was not transferred from the GEPF.
According to the OPFA, the Financial Services Tribunal said the MEPF, in its reconsideration application, did not deal with the primary finding of the PFA that it was not entitled under the rule to buy years of service with the transfer value.
The Tribunal said it dismissed the MEPF application, citing that the MEPF had relied on the provisions of its Rule 24A, which deals with the transfer from funds other than the GEPF, ignoring the express and different words of the rule that deals with GEPF transfers.
PERSONAL FINANCE