The Pension Funds Adjudicator (PFA) offended the “principles of natural justice” when it overruled a decision by a pension fund’s board of trustees and awarded a death benefit without giving two people affected by the determination an opportunity to state their case.
The trustees allocated the death benefit to the appellants, the siblings of the deceased. This was not to the liking of a woman who claimed to be the deceased’s life partner, and who was his nominated beneficiary at the time of his death in December 2018. She went to the PFA.
In September 2020, the PFA ruled that, because there was no dependent beneficiary, the benefit had to be allocated to the person nominated by the deceased, in accordance with section 37C(1) of the Pension Funds Act. A dependant had not been identified and 12 months had lapsed since the trustees had tried to find a child whose existence had yet to be established.
Even though the fund’s trustees had identified the deceased’s siblings as the beneficiaries, they were excluded as parties to the proceedings before the PFA. They were not even notified of them.
In their appeal to the tribunal, the siblings said the PFA’s determination offends the principles of natural justice, because they had not been afforded an opportunity to make representations before it had been issued.
The tribunal agreed.
“It goes without saying that everyone has the right to be heard prior to a decision that affects him or her being taken. In this matter, it is evident that the PFA considered the matter without having invited the applicants to make any representations. This is strange, as the applicants had a vested interest in the matter, as they had been awarded the benefit by the board of trustees,” the judgment said.
“Whether the board was wrong or right regarding the allocation, at the very least the applicants should have been called upon to make representations before a determination was issued. This would have given the PFA an opportunity to gather more information, which could have changed the determination.
“It is the view of this tribunal that to have considered a matter where there are other interested persons and having failed to afford those affected persons an opportunity to be heard, such would be procedurally flawed.”
The tribunal said the issue of who is or who is not a dependant could only be determined after all the interested parties have made representations before the PFA.
This was also true when it came to dealing with another argument put forward by the appellants: whether the PFA had the authority to overturn the trustees’ decision in circumstances where there was no indication that the board had taken into account irrelevant, improper or irrational factors.
The tribunal set aside the determination and sent the matter back to the PFA for reconsideration.