A recent Financial Services Tribunal decision, handed down on 28 October 2024 in the matter Seth Bouah v Sanlam Umbrella Provident Fund and Others with Case No: PFA29/2024, confirmed that the Pension Funds Adjudicator (OPFA) lacks jurisdiction to entertain unapproved disability benefit claims underwritten by the insurer.

The main issue which was under re-consideration was whether the OPFA was correct in her determination that the OPFA lacks jurisdiction in relation to claims for unapproved disability benefit claims arising from policies taken out by an employer from an insurer.

The facts of this matter are as follows:

  1. The applicant, Mr Seth Imraan Bouah, was employed by the third respondent, Sun International (the employer) and as a consequence of his employment became a member of the Sanlam Umbrella Provident Fund (the Fund) on 1 July 2019.
  2. The rules of the Fund made provision for two types of disability benefits, being the following:
    • an unapproved disability benefit, provided through a policy underwritten by an insurer; and
    • an approved disability benefit provided through a policy effected by the Fund on behalf of its members.
  3. The risk premiums relating to the unapproved disability benefit were paid to the Fund by the employer as part of the contributions to the Fund.
  4. The employer had an Income Disability Policy (Policy), which paid an income disability. The payment of the approved benefit is only triggered in the event that the insurer deems the member permanently disabled following the end of the 24 months period. The Policy was in the name of the employer and as such the Fund cannot submit a disability claim to the insurer on behalf of the employer.
  5. Mr Bouah lodged a complaint with the OPFA, after he filed a disability claim which was not paid. The Fund and its administrator, Sanlam, could not assist Mr Bouah given that only the employer had the authority to assist with the unapproved disability benefit claim.
  6. The OPFA held that Mr Bouah does not fall within the definition of a complaint as contemplated in section 1 of the Pension Funds Act, 1956.

The Financial Services Tribunal upheld the OPFA’s determination. In addition, the FST noted in its ruling that Mr Bouah and the employer had in any event come to an agreement, which settled the dispute and accordingly, there was no basis for Mr Bouah to approach the OPFA as the complaint did not relate to a pension / provident fund matter.

The Tribunal dismissed the application for reconsideration, re-affirming that disability benefit claims when under employer held policies, do not fall within the jurisdiction of the OPFA and the Financial Services Tribunal. The ruling confirms the need for funds to properly communicate benefit structures to members as well as member education focused on understanding the nature of contributions received as well as onward payments to insurers.