The Financial Services Tribunal (FST) has dismissed an application by a fund member who claimed more than R800 000 in alleged investment losses arising from a delay in transferring his retirement benefits, finding that the fund’s rules – not a notional return from another investment – determined what was payable while the transfer was being processed.
The case concerned Helgo Rapsch, a paid-up member of the Deloitte and Touche pension and provident funds (the fund), who elected to transfer the full value of his fund credits to preservation funds administered by Allan Gray.
The election occurred against the backdrop of a change in administration, with the fund moving from Alexander Forbes to Sanlam with effect from 1 March 2024. Members were informed that those who wished to withdraw or transfer their benefits before the transition had to submit claim forms and supporting documents by 29 February 2024.
Rapsch’s provident fund claim was received on 19 February 2024, and his pension fund claim the following day. On 21 February 2024, Alexander Forbes disinvested the benefits from the market, placed the proceeds in the fund’s bank account, and sent Allan Gray the Recognition of Transfer documents. It also sent Rapsch a text message confirming receipt of the transfer instruction and saying the funds would be paid within six weeks of the withdrawal date.
The process then stalled. Alexander Forbes applied to the South African Revenue Service for the necessary tax directives on 27 February 2024, but SARS rejected the application because of an “invalid format of FSCA registered insurer number”.
Before the Tribunal, Alexander Forbes submitted the problem arose because Allan Gray had supplied an incorrect reference number. The rejection meant the transfer could not be completed before 1 March 2024, when the section 13B administration transfer to Sanlam took effect and a mandatory freeze period followed.
Sanlam completed the new administration platform by the end of April and began processing claims on 7 May 2024. Rapsch’s provident fund and pension fund benefits were transferred on 26 June and 27 June, respectively. The transfers included bank interest of about R723 785.
Complaint and loss calculation
Before the Pension Funds Adjudicator, Rapsch complained that the delay amounted to maladministration and caused him loss.
He said the transfer should have been completed by 29 February 2024. The money would then have been invested in the Allan Gray Money Market Fund, which he calculated would have yielded 9.09% over the relevant period. The shortfall between that hypothetical return and the amount paid to him, he said, came to R824 022, which he claimed together with interest at the prescribed rate.
Alexander Forbes said it had complied with its obligations; it had lodged the SARS directive application timeously; and the delay resulted from the invalid reference number and the inevitable freeze period under the section 13B transfer.
The fund said it had acted diligently throughout the transition; the benefits were not “sterilised” but were kept in the fund’s bank account in accordance with the rules; and the member’s proper entitlement during the delay was bank interest.
It also said that, on a comparison between the position in which Rapsch would have been if payment had occurred on the earliest feasible date and the position he was in when paid, he had in fact profited by R29 739.39. Sanlam likewise said no financial loss had been suffered and noted that the pension fund component had shown a gain.
Adjudicator’s findings
The Adjudicator dismissed the complaint in July 2025. She found that Alexander Forbes had not acted wrongfully in relation to the initial period.
She said the fund had not adequately communicated the cut-off date, freeze period, and backlog, but held that this communication failure did not, by itself, give rise to a compensable claim. Most importantly, she found that Rapsch had failed to prove loss or causation. The evidence showed he had gained R29 739.39 because of the timing of the transfer.
Tribunal: rules determine the outcome
On reconsideration, the Tribunal said the central question was whether Rapsch was entitled, during the period between disinvestment on 21 February 2024 and payment on 26 and 27 June 2024, to bank interest earned on the deposited amount or to some other measure of return, such as the Allan Gray Money Market Fund yield.
It answered that question by referring to rules 8.2.1 and 8.2.3 of the fund’s rules. Rule 8.2.3 provides that, after the calculation date, the member’s fund credit must be held in the fund’s bank account and paid within a reasonable period, and that if payment is unreasonably delayed, “bank interest must be added” to the fund credit.
The Tribunal treated those rules as binding and exhaustive. They direct both where the money must be held and what happens if there is unreasonable delay. In the Tribunal’s words, the rules do not permit a notional placement in some other investment vehicle. The interest due is the interest actually earned on the deposited amount, not the return that another vehicle might have generated.
The Tribunal said there was no contractual, statutory, or factual basis for valuing the interim period as though the benefits had been invested with Allan Gray.
Allan Gray’s internal policy on instructions received by it was irrelevant because the money was not held by Allan Gray during the relevant period; it was held by the fund under its own rules.
The 21 February text message also did not assist Rapsch because it dealt with payment timing, not the measure of interest to be credited.
Prescribed interest argument fails
The Tribunal likewise rejected the prescribed-rate argument. It said the Prescribed Rate of Interest Act concerns interest on a debt where no rate has been agreed.
Here, however, the fund’s rules regulated the member’s entitlement during the transition by specifying bank interest earned on the deposited amount. On that basis, there was no room to add a further interest amount at the prescribed rate.
No proven loss
The Tribunal also rejected Rapsch’s attempt to quantify his loss at R824 022. That figure depended on the assumption that the full benefit would have been invested in the Allan Gray Money Market Fund from 21 February 2024 at a yield of 9.09%. The Tribunal said that assumption had no basis in the rules, the statute, or the facts.
Additional issues not determinative
The Tribunal added that arguments about who caused the SARS directive rejection, or about the adequacy of the communication with members, did not change the outcome.
Even if the correct form or reference number had been submitted to SARS on 27 February 2024, it was not certain the directive would have been issued in time, and in any event the freeze period would have taken effect on 1 March 2024. More fundamentally, Rapsch’s purported loss was displaced by the rules.
Tribunal’s powers and final order
Finally, the Tribunal noted that the relief sought – a money judgment for alleged investment losses – was, in substance, a claim for compensatory damages, which falls outside its remedial powers. Even if Rapsch had succeeded on the merits, the proper course would have been to set aside the determination and refer the matter back to the Adjudicator.
Since he failed, there was no basis for such an order. The application for reconsideration was therefore dismissed.
