A decision by a pension fund was referred to the Pension Funds Adjudicator’s office, and subsequently to the Financial Services Tribunal by the disgruntled siblings of the deceased.
Background
After the death of the mother of the applicants some years ago, the fund member was involved in more than one “relationship”.
During a former relationship, he indicated on the nomination form that the lady concerned, “Victoria”, was his spouse, and he allocated 6.25% of his death benefit to her. He allocated the balance to the applicants, his offspring, in varying percentages.
Victoria was not the member’s spouse in the conventional sense. She was the widow of his brother. Although it was common cause that she was in a relationship with the member, the issue that arose was whether she was his “permanent life partner” when he died.
A permanent life partner is included in the definition of “spouse”, and a spouse is by definition a “dependant” of a member.
The problem arose because the fund, having found that Victoria had been the member’s permanent life partner, allocated 54% to her and smaller percentages to the applicants.
The first applicant laid a complaint with the Pension Funds Adjudicator in terms of section 30A of the Pension Funds Act, which the Adjudicator dismissed.
This resulted in an application for reconsideration of the Adjudicator’s decision under section 230(1) of the Financial Sector Regulation Act.
Tribunal’s ruling
“There are many affidavits and many allegations and counter-allegations. What is rather strange is that the parties, being represented by attorneys, committed statutory perjury by swearing, filing and relying on conflicting affidavits. As the fund mentioned, the applicants’ affidavits on dependency changed as the wind changed.
“Worst, and suspect, is the affidavit of Victoria, filed by her attorney in these proceedings. She states that she was not a ‘spouse’ of the member because a traditional ritual had not been performed. She does, though, not say that she was not his permanent life partner, but that may be implied. She says that she will be satisfied with the allocation of 6.25% as per the nomination form.
“This amounts to a waiver of her claim to more than 6.25% of the death benefit, which means that the remainder must be redistributed among the other beneficiaries, namely the applicants. This development means that the fund will have to make a new allocation and that irrespective of the correctness of its original allocation and the decision of the Adjudicator.”
Tribunal not amused
Judge LTC Harms, deputy chairperson of the tribunal, held nothing back when making his ruling on the matter. “When free money is in the air, truth evaporates,” he said.
“It is unbelievable that members of the public have the audacity to waste the money, time and energy of the fund, the Adjudicator, and this tribunal in such a manner and in the process ignore the value and purpose of affidavits.
“But, since they have a statutory free ride at the cost of other fund members and the tax-paying public, there is nothing the tribunal can do. The powers of the tribunal are limited.
“Under the circumstances, the decision of the Adjudicator must be set aside, and the Adjudicator will (I presume), in turn, set aside the fund’s decision and refer the matter back to the fund to make a new allocation, which, I suggest, would be along the lines of the member’s nomination, since it is difficult to believe anything the applicants state about the degree of their dependency.”
Principles versus rules
The expression “Caesar’s wife must be above suspicion” apparently originates from the following story:
A man named Publius Clodius Pulcher sneaked into a party with the intention of seducing Caesar’s wife, Pompeia. This led to Publius’s arrest and trial. After the trial, Caesar divorced Pompeia. People questioned what this might have had to do with the trial of Publius. Because Pompeia was under suspicion of illicit behaviour, Caesar felt that he had to divorce her to protect his dignity.
If old Julius had lived in modern times, he would most likely have had his whole empire sued off his backside.
The advent of Twin Peaks regulation meant a change from assessing market conduct against specific rules to measuring the fair treatment of clients against principles. Your deeds must reflect your adherence to Treating Customers Fairly.
Holding an industry to account if it strays from the moral high ground is noble, but when you operate in an environment where the likes of what is described above is the norm, is it a fair contest?
I wager that a substantial amount of what the retired judge called “statutory perjury” would just disappear.
Until accountability is brought back in all spheres of life in this country, the unequal treatment of certain sectors will remain.
The above reminds me of two cynical sayings that apply in this instance:
- I have principles. If you do not like them, I have others.
- Ninety-eight percent of lawyers give the rest of us a bad name.
