The Financial Services Tribunal (FST) has dismissed a reconsideration application by a couple who wanted to be provided with a joint-and-survivorship pension because they reconciled and lived together as if married after their divorce.
Two issues came into view in this case:
- The application of section 30I of the Pension Funds Act (PFA), which addresses the time limit on lodging complaints with the Adjudicator; and
- Whether, in terms of the fund’s rules, either of the applicants could qualify for a pension on the death of the other.
The applicants, “AS” and “MS”, were employed by the Southern Union of the Seventh-day Adventist Church, and both were members of the Seventh-day Adventist Church Pension Fund.
The timeline of events is germane to the procedural and substantive aspects of the case:
- November 1966: The applicants were married.
- May 2009: AS reached normal retirement age (65) but did not retire.
- June 2010: AS and MS were divorced.
- January 2011: MS reached normal retirement age and retired. She was issued with a single life annuity.
- 30 April 2012: AS retired, and he was issued with a single life annuity.
- July 2014: The couple said they started cohabiting, “as if married”, from this date after they reconciled.
- 9 April 2018: The couple sought a ruling from the Seventh-day Adventist Church Pension Fund that the surviving partner would be entitled to a surviving spouse’s pension.
- 18 April 2018: The fund’s director of pensions rejected their request because the life insurers had taken them over as singles.
- 15 May 2018: The applicants informed the director that they were unhappy with her response and intended to “appeal”.
- October 2018: The applicants wrote to various officials of the fund.
- November 2020: The fund’s board denied their request.
- 14 June 2021: The applicants complained to the Adjudicator.
Application of the time-bar on complaints
The Adjudicator dismissed the complaint in October last year because it was time-barred in terms of section 30I, which states:
- Sub-section (1): The Adjudicator shall not investigate a complaint if the act or omission to which it relates occurred more than three years before the date on which the complaint is received by him or her in writing.
- Sub-section (2): The provisions of the Prescription Act relating to a debt apply in respect of the calculation of the three-year period referred to in sub-section (1).
These provisions are found in sub-sections 12(2) and (3) of the Prescription Act:
- (2) If the debtor wilfully prevents the creditor from coming to know of the existence of the debt, prescription shall not commence to run until the creditor becomes aware of the existence of the debt.
- (3) A debt which does not arise from contract shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and of the facts from which the debt arises: provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care.
The tribunal pointed out:
- The PFA deals with “complaints”, not necessarily “debts”, which has a specific meaning in the Prescription Act; and
- The reference to the Prescription Act in sub-section 30I(2) relates to the calculation of the three-year period “and nothing else”.
The Adjudicator accepted the fund’s defence that the complaint was time-barred because the applicants filed their complaint with her office on 14 June 2021, whereas the act or omission to which it related occurred on 18 April 2018 (the date on which the director of pensions denied their request).
The FST found that the Adjudicator was “fully justified” to reach this conclusion, particularly because the applicants, in their letter to the director of 15 May 2018, indicated that her letter constituted a ruling, because they intended to “appeal” the decision.
The tribunal said there was another reason the complaint was time-barred, namely that the act or omission to which it related occurred when the fund arranged the single life policies instead of policies that covered surviving spouses.
“The applicants knew or had to know, even without considering their positions at the fund at the time, that the policies did not provide for death benefits but were single life annuities.”
Why neither applicant was a qualifying spouse
Despite upholding the Adjudicator’s decision that the complaint was time-barred, the tribunal thought it appropriate to address the issue of whether either AS or MS could be a qualifying spouse in terms of the fund’s rules.
The rules defined a “qualifying spouse” as “that woman/man with whom the member at the time of his/her death was joined in marriage … provided that (a) the spouse is a dependant and (b) the marriage took place two years before the normal retirement date and before retirement”.
They defined “marriage” as including “a union of a man and a woman in respect of whom the board of management has been satisfied that the parties cohabited as if married”.
The FST said “the golden thread in the rule is that a survivor’s benefit requires a fixed marriage (in the broader sense) beginning at least two years before the deceased member’s retirement and continuing until his/her death. It is ‘the marriage’ (not ‘a marriage’) which must have taken place two years prior to retirement, and which must still exist at the time of demise of the member.”
For MS, for example, to be a “qualifying spouse”, the following requirements had to be met:
- At the time of AS’s death, they still had to be joined in a legal marriage;
- The marriage must have been concluded before 30 April 2010 – that is, two years before AS’s retirement; and
- MS must be a dependant.
The FST said the legal marriage concluded before AS’s retirement ended, which excluded the possibility of relying on this marriage. “The parties can never again be joined in that particular marriage.”
It said there were two alternatives to the above, considering the fund’s definition of “marriage”:
- The parties were in a “traditional” union from a date before retirement. The applicants did not rely on this possibility.
- At the time of AS’s death, the parties were (still) in a union of man and woman under which they cohabited as if married. However, this union (marriage) should have also taken place before 30 April 2010. But it did not. The parties divorced two months later, and the cohabitation started four years later, after retirement.
For these reasons, the tribunal said, MS could never qualify as a qualifying spouse. That she may at the time of his death be a dependant was accordingly irrelevant. The same applied to AS.
