By Clement Marumoagae
Various divisions of the high court have raised serious concerns against the Government Employees Pension Fund (GEPF) relating to claims that are either not paid or payment was delayed. These administrative challenges seriously undermine the right of members of this fund (or their beneficiaries) to social security as provided in section 27(1)(c) of the Constitution of the Republic of South Africa, 1996.
Generally, retirement fund members contribute towards retirement funding to financially sustain their lives after their working years. During their period of employment, part of their remuneration is deducted by their employers and paid over to their retirement funds to be invested. This allows members to accumulate benefits that, to some extent, can replace their salaries when they exit their employment. However, when they reach retirement age, some of them or their beneficiaries and dependents experience challenges when claiming the accumulated benefits. While all retirement funds certainly have their challenges, it is disappointing that the GEPF as the biggest retirement fund within the African continent also experiences difficulties with respect to claims made by its members and or members’ beneficiaries.
Even more concerning is the general approach of this fund when those who claimed from the fund take the fund to court. In the case of Mahlangu v Government Employees Pension Fund and Another (3297/2018) [2020] ZAGPPHC 814 (17 August 2020), a member who was inherited by the GEPF from one of the pre-democracy retirement funds complained that his pensionable service was not adequately calculated by the fund. The member started contributing to one of the state funds that was established before the dawn of democracy in 1980. However, his pensionable service was only calculated from 1989, thereby excluding close to eight years of service and contribution from the calculation of the benefits that were due to him. The GEPF’s defense was simply that the employer failed to provide it with sufficient proof relating to the date the member started contributing towards retirement funding. In this case, the GEPF failed to adequately assess proof that was submitted to it by the member, leading the court to order that the member’s pensionable service should be calculated from 1980. Based on how the GEPF handled this matter, the court ordered this fund to pay punitive costs on an attorney and client scale.
The GEPF was also ordered to pay wasted costs in Hangana v Government Employees Pension Fund (2608/2017) [2018] ZAECPEHC 78 (6 November 2018). In this case, the GEPF failed to prudently attend to the correction of the calculation of its member’s pensionable service even though the error was brought to its attention. Most worryingly, the GEPF failed to respond to correspondence from its member and her attorneys, thereby illustrating total disregard for the member’s plight regarding the possible reduction of her entitled benefits. In para 14, the court stated that the GEPF ‘… failed to act in accordance with its statutory and constitutional obligations and chose to shift the blame onto the Department’. Further that once the GEPF realized that there was an error in the calculation of the pensionable interest, it should have taken steps to rectify it, and not wait for its member to take it up with the employer or bring it to court before finally acting. In Mhlontlo v Government Employees Pension Fund (2398/20) [2021] ZAECPEHC 46 (19 August 2021) the court observed that ‘… it appears as if many retired government employees battle, for one reason or another, to access the benefits to which they are entitled following many years of service and contribution’.
The GEPF’s ‘refusal’ to pay claims where Z102 forms have not been completed by the employer has equally received judicial disapproval. In Mashao NO v Government Employees Pension Fund and Others (5382/2022) [2023] ZAGPJHC 655 (6 June 2023), the court ordered the GEPF to pay punitive costs on an attorney and client scale for failing to finalize the death benefit claim for over four years because Z102 form was not completed by the employer. The documents that were submitted to process the claim went missing. The claim was not processed even after such documents were resubmitted. The claimant’s request for responses was ignored. The court held that the GEPF cannot refuse to assist claimants when the statutory framework requires it to engage with them. The Court rebuked the GEPF for opposing this application even though its defence was bad in law. In the Mhlontlo case, the court held that the GEPF is not entitled to refuse to process a claim because it has not received any form from the employer.
In practice, the GEPF fund does not experience extensive litigation from its members because they are not fully informed of their rights. Even those who are informed, they generally lack the final resources to take this fund to court to protect their rights. It is not clear how many of the GEPF’s former members’ years of pensionable service that were accumulated before this fund was established were not considered in the calculation of their accrued retirement benefits. What is clear however is that, given the levels of poverty in South Africa and the extent of the unclaimed benefits held by this fund, members of this fund deserve to be paid every cent that was not paid to them, irrespective of when they left or are due to leave this fund.
If you are a member of any retirement fund, a former member, or a beneficiary and wish to be assisted with respect to your retirement benefit, feel free to contact us for assistance. We also assist retirement funds and their boards to comply with their regulatory obligations when executing their duties.
