The jurisdiction of the Pension Funds Adjudicator’s office when it comes to the enforcement of court orders against a retirement fund came under spotlight in a decision handed down by the Financial Services Tribunal (FST) recently.
The applicant in the matter (“NB”) was married to a member of the Eskom Pension and Provident Fund. They were divorced in May 2021, before the member retired in October of that year. The divorce order stated that she was entitled to 50% of her ex-husband’s pension fund interest.
But the divorce order did not comply with section 7(8)(a) of the Divorce Act read with section 37D of the Pension Funds Act (PFA).
A rectified divorce order was issued in January 2022, but by then NB’s ex-husband had been paid his pension interest.
Anticipating this, NB obtained an interim interdict, dated 30 November 2021, from the High Court in East London, prohibiting the fund from paying her ex his full interest pending the rectification of the divorce order. The fund was also instructed to calculate the value of NB’s 50% share within 30 days of receipt of the variation order.
In March 2022, NB obtained an order from the High Court in Johannesburg, ordering the fund to comply within five days with the East London High Court’s order.
The FST commented: “It is, respectfully, not understood how a different High Court could issue such an order and why courts issue orders that orders should be complied with.”
NB then laid a complaint with the Pension Funds Adjudicator, alleging that the fund had not complied with the court orders. She wanted the Adjudicator to order the fund to honour them.
The Adjudicator dismissed the complaint in July 2022, stating that her office is not empowered to enforce court orders. She referred to section 30H(2) of the PFA and the definition of “complaint” in section 1.
Section 30H(2) states the Adjudicator shall not investigate a complaint if, before the lodging of the complaint, proceedings have been instituted in any civil court in respect of a matter which would constitute the subject matter of the investigation.
Two months later, NB went back to the Adjudicator. This time her complaint related to alleged maladministration by the fund – namely, the fund had failed to preserve her share of the pension interest and abide by the instructions of her “attorney” to preserve her share. She wanted to Adjudicator to order the fund to pay the interest that she had lost.
The Adjudicator also dismissed this complaint on the ground of lack of jurisdiction.
NB lodged a reconsideration application with the FST.
It was the same complaint
In its decision, the FST noted that NB’s letter accompanying her second complaint to the Adjudicator stated that her first complaint related to maladministration and not to enforcing the court order. “That statement is simply untrue,” it said.
The tribunal said her second complaint was also “replete” with references to the different court orders and the fund’s alleged non-compliance with those orders.
“Giving a leopard another name does not change its spots,” the FST said.
NB wants the Adjudicator to order the fund to pay her 50% share of the member’s pension interest. But the problem is that the variation order of the High Court already provides for the fund to pay her share of the pension interest. It would serve no purpose for the Adjudicator to make an order requiring the fund to comply with an order already issued by a court of law.
In addition, the complaint of maladministration was the cause of her application in the Johannesburg High Court. This brought one back to the issue of the Adjudicator’s jurisdiction, as set out in section 30H(2), which NB had not addressed in her reconsideration application, the tribunal said.
The FST dismissed the application.
