No Claim Form, No Payment’: Pension Adjudicator Orders Funds to Repay After Wrongful Payouts

The Pension Funds Adjudicator has ruled that two retirement funds must repay members whose benefits were incorrectly paid to the wrong recipients.

In two separate rulings, adjudicator Lebogang Mogashoa found that both funds failed in their legal duty to protect members’ interests and ensure benefits were paid accurately and only after proper validation.

Case 1: The Missing Claim Form

A former employee of PricewaterhouseCoopers (PwC) South Africa worked from May 2003 to December 2007. After leaving, he transferred a withdrawal benefit of over R46,000 into a preservation fund in March 2008.

In November 2024, he requested payment. The fund responded that the benefit had already been paid by cheque in December 2011over R48,000.

The member said he never applied for withdrawal or received the cheque.

An internal investigation revealed the employer had supplied an incorrect member number on a claim form. This error swapped his record with another individual.

The fund provided a bank statement showing money left its accountbut it did not identify the recipient. The complainant’s bank statement showed no such payment.

Crucially, the fund could not produce documentary proof that the member had ever submitted a withdrawal claim form.

The ruling: Without a claim form, the fund could not legitimately process a withdrawal payment. The fund was ordered to calculate the member’s benefit as if it had remained invested from 2008 to the present and pay the full amount, including accumulated investment returns.

Case 2: Payment to a Two-Year-Old

A former employee of Kempston Motor Group Trust , trading as Peugeot/Citroën, worked from April to October 2007 and was a member of the Motor Industry Provident Fund.

He was told his withdrawal benefit of R17,321.40 had been paid in March 2012. When he requested documentation, he discovered the money had been paid into a bank account belonging to a two-year-old child his niece.

The member said he never signed any claim documents, and the signatures used did not resemble his own.

The fund claimed it had received a withdrawal application with supporting documents. But the adjudicator identified a critical flaw: where the bank account holder is not the member, the form requires signatures from both the member and the account holder. Instead, only one signature appeared.

The fund failed to respond when asked to explain the discrepancy and provide details of verification steps.

The ruling: The fund had not implemented adequate systems to properly validate the claim. The payment was likely made to the wrong person.

The fund argued repayment should depend on the outcome of a criminal fraud investigation. The adjudicator rejected this, noting that the legal standards of proof differ between criminal proceedings and pension fund adjudication.

The fund was ordered to repay the member’s withdrawal benefit plus investment returns from March 2012.

The Bottom Line

One fund paid out without a claim form. Another paid to a two-year-old.

Both said the money was gone. Both were ordered to repaywith interest.

The adjudicator’s message is clear: if you can’t prove the member asked for the money, you can’t keep it. And you can’t blame fraud for your own failure to check.