The Pretoria High Court held that a pension fund and its administrator lacked standing to seek the Financial Services Tribunal (FST) to reconsider a determination handed down by the Pension Fund’s Adjudicator’s (Adjudicator) , given that they do not fall within the ambit of “persons aggrieved by a decision” under section 230 of the Financial Sector Regulation Act, 2017 (FSR Act) in respect of death benefits disputes. In short, the court held that an entity is only aggrieved if a legal right is infringed, a mere financial or administrative interest is not enough.
In this matter:
1. A member of a fund passed away on 10 August 2020 (deceased member). He was unmarried.
2. Ms Bhekisiwe Beslina Shandu (Ms Shandu), the mother of the deceased member, made submissions to the Fund during the course of the section 37C investigation that the deceased member supported her with about R4 000 per month.
3. The fund’s section 37C investigation recorded that the deceased member had one minor child who was on his medical aid, and that the child’s mother advised that she was receiving about R800 per month from the deceased member in respect of the child. Consequently, the Fund decided to allocate 60% of the death benefit to the mother and 40% to the minor child.
4. Ms Shandu then lodged a complaint with the Adjudicator in which she disputed the 40% allocation to the child, stating that the deceased member was not the child’s biological father. The Adjudicator found that the fund’s investigation was inadequate when regard is had to the ambit of section 37C investigations prescribed under the Pension Funds Act, 1956. As such, the Adjudicator set aside the fund’s death benefit allocation and directed that a paternity test be obtained with consent from the child’s biological mother within eight weeks of the determination. If testing excluded paternity, or to the extent that consent was not forthcoming from the child’s mother (who ultimately declined to consent to paternity testing), the Adjudicator directed that the board of trustees of the Fund (Board) must then proceed to exclude the child as a legal dependent and assess factual dependency.
Subsequent to the Adjudicator’s determination, the fund initiated an application before the FST for a reconsideration of the Adjudicator’s determination. The FST dismissed the application on the basis that the fund lacked locus standi. Aggrieved by the FST’s ruling, the fund then launched an application to review the FST’s ruling in the High Court. Upon considering the matter, the Honourable Swanepoel AJ dismissed the application and upheld the FST’s ruling on the fund’s lack of locus standi.
In arriving at this decision, the court considered amongst other things that:
1. There is a trite interpretation of the scope of what is meant by “person aggrieved” which is defined as someone with a legal grievance — meaning an infringement of a legal right — rather than a party with only a financial, reputational, or administrative interest. The fact that a fund may need to allocate time and resources to repeat an investigation or conduct tests does not, in itself, qualify it as an aggrieved person as contemplated in the FSR Act.
2. One must distinguish between the right of a person aggrieved by a decision of the Adjudicator to apply to the FST for reconsideration of a decision by the FST, and the right of a dissatisfied party to proceedings on application for the reconsideration of a decision by the FST made in terms of 235 of the FSR Act. The former gateway cannot be widened by reference to the latter.
Going forward, funds will be required to carefully consider matters that warrant challenge. An Adjudicator’s determination cannot be challenged simply because the Adjudicator disagrees with the fund’s decision in allocating a death benefit, or on the basis of procedural or technical objections alone.