The office of the Pension Fund Adjudicator found that a pension fund administrator did not do enough to trace a beneficiary, causing the beneficiary to lose what was due to him. The pension fund’s excuse was that it was too expensive to find the beneficiary and would cost more than the amount due to him.
Naheem Essop, the Deputy Pension Funds Administrator, ruled in a determination that Tennant Life Benefit (Pty) Ltd, the fund administrator of Fidelity Guards Retirement Fund (FGPF), should have used the appropriate tracing method to locate the complainant to enable him to claim his benefit.
Tennant’s representative submitted that it failed to trace the complainant because the cost was higher than the benefit available. He was employed by Fidelity Services Group (Pty) Ltd from 26 May 1998 until 20 May 2024 when his services were terminated.
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Member received payout, but no claim form from employer – Adjudicator
He was previously registered as a member of FGPF and the employer later joined the Private Security Sector Provident Fund (PSSPF) from 1 November 2002.
The PSSPF paid him a withdrawal benefit of R137 614.48 on 11 August 2025, but the complainant was aggrieved by the employer’s failure to submit his retirement claim form. He provided a copy of his payslip from the employer for 25 April 2022, reflecting a provident fund deduction of R194.80.
However, the PSSPF submitted that the employer commenced participating in the fund on 1 November 2002 and was non-compliant in terms of section 13A of the Act. PSSPF submitted that it issued section 13A letters to the employer regarding its non-compliance and the matter had been reported to the Financial Sector Conduct Authority (FSCA) according to statutory requirements.
PSSPF confirmed that the complainant’s membership started from 1 October 2003. On 9 May 2025 the complainant had a fund credit of R133 199.59, representing provident fund contributions received for October 2003 to April 2020, July 2020 to April 2024 and June 2024.
In addition, PSSPF stated that its records indicated that the employer was granted a Covid-19 relief contribution holiday for the April 2020 to June 2020 contribution periods.
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Employer was also a bit in arrears – but paid up
PSSPF stated that, considering the fund’s qualification of service rule at the time, the employer ought to have started payment of full provident fund contributions from November 2002. The employer owed an amount of R4 057.11 in respect of outstanding contributions from November 2002 to September 2003 and May 2024, together with late payment interest of R137 784.31 calculated up to 3 July 2025.
On 3 November 2025, PSSPF provided proof of payment indicating that the complainant was paid a withdrawal benefit of R137 614.48 on 11 August 2025.
Tennant submitted that it received a transfer in value of R1 069.51 on 1 March 2018 on behalf of the complainant. It stated that it was not provided with the complainant’s contact details by the transferor fund.
According to Tennant it did not use a tracing agent because the tracing cost would have exceeded the value of the benefit, which at the time was R1 069.51, below the fund’s practical threshold for cost-effective tracing.
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Complainant was working as security officer for long time
However, the employer submitted that the complainant was employed as a security officer from 26 May 1998. He was registered as a member of FGPF from 19 April 2002 until 18 September 2003, when he was transferred to the security industry fund and joined PSSPF from 19 September 2003 until the termination date due to absconding on 20 May 2024.
According to the employer it requested FGPF to advise if there was any bulk transfer of employees’ funds to PSSPF but received no response. The employer said that the complainant’s claim was submitted to the fund.
On 2 April 2025, the employer provided submissions from FGPF stating that the complainant was in its system as part of the ‘agterskot’ members. It stated that the value of R1 069.51 was brought in March 2018, with an administration fee of R30 per month until June 2021. It stated that the complainant’s benefit was not paid out and the monthly fee depleted the benefit. Therefore, there was no benefit due to the member.
Essop said in his determination that the complainant was paid a withdrawal benefit of R137 614.48 on 11 August 2025. PSSPF provided proof of payment. Essop said he was satisfied that all contributions on behalf of the complainant had been remitted to PSSPF in terms of the rules and that he was paid the correct withdrawal benefit. Therefore, the complaint against the employer and the fund was dismissed.
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Pension fund should have used appropriate tracking method
However, Essop found that Tennant should have used the appropriate tracing method to locate the complainant and enable him to claim his benefit. Tennant submitted that it failed to trace the complainant because the cost of doing so was higher than the benefit available.
“This submission contradicts Tennant’s claim that a tracing method, costing only R30.00, was available for use in this case, yet it was not employed. Tennant disregarded its responsibilities to the complainant by not complying with rule 27.1.3, which states that the board has a legal duty to take all reasonable steps to trace members or beneficiaries rather than just waiting for them to come forward.
“In his submissions, the complainant made no mention of the benefit transferred to Tennant on his behalf. This clearly indicates that the complainant was unaware of the existence of the benefit that was due to him held by Tennant.
“The complainant could have claimed the benefit if Tennant tracked him down and promptly informed him of its existence before the benefit was depleted by administrative costs,” Essop said.
He added that the submissions indicate that Tennant failed to trace the complainant and advise him to claim his benefit. As a result, the complainant’s benefit was depleted by administrative costs.
Tennant’s failure to trace the complainant caused him to suffer a financial loss of R1 069.51 and Essop ordered Tennant to pay the complainant an amount of R1 069.51 plus interest.