The failure by the South African Police Service (SAPS) to submit death claim documents on time resulted in group life assurance claims by the families of two deceased policemen being repudiated.
The Pension Funds Adjudicator, Muvhango Lukhaimane, said this placed an unnecessary burden on taxpayers, as SAPS would have to pay what should have been paid by the assurer.
Two widows, Ms S and Mrs K, complained to the adjudicator that the South African Local Authorities Pension Fund and SAPS were responsible for the repudiation of the death claims.
Ms S’s husband died on July 26, 2012. He had worked for the police force all his life.
A retirement benefit was paid to his dependants. But a life assurance benefit claim was repudiated by the insurer on the grounds of the late lodging of the requisite documents by SAPS.
In its response to Ms S’s complaint, the South African Local Authorities Pension Fund submitted that although Ms S’s husband had died in July 2012, the death notification form was stamped October 2, 2013. It said its administrator confirmed that the group life benefit was not paid to the beneficiaries because more than 12 months had lapsed between the deceased’s death and the date the assurer was notified about the death. It submitted that SAPS had failed to submit the claim in time.
SAPS, in turn, failed to provide a response to the complaint.
A similar thing happened to Mrs K. On the death of her husband, she submitted the relevant information to SAPS. However, the fact that SAPS then failed to forward the necessary claim documents to the assurer in time “shocked her”, according to the adjudicator’s determination.
The South African Local Authorities Pension Fund submitted that, on investigating the matter, it established that claim documentation was received from SAPS on September 25, 2013, almost two years after Mrs K’s husband’s death on October 1, 2011.
SAPS again failed to respond.
In her determination, Ms Lukhaimane said the entitlement to and payment of a death benefit was governed by rules of the Pension Fund.
“Had SAPS submitted the death claim documents timeously, the dependants in both cases would have been entitled to a benefit as provided for in the fund’s rules.
“Thus, the beneficiaries and dependants ought to be placed in the position they would have been had SAPS submitted all the required and necessary documents pertaining to the death benefit claim in time.
Lukhaimane said it was imperative that the South African Local Authorities Pension Fund educated SAPS of its role and responsibility in terms of pension fund’s rules.
“The unwarranted payment of the death benefit by SAPS would presumably be funded from the budget allocation of SAPS from the fiscus. This amounts to a waste of taxpayers’ funds, as the death claim was an insured benefit that would have been settled by the registered insurer.
“Therefore, in order to prevent a recurrence of this nature, the pension fund must ensure that SAPS is aware and kept abreast of its obligations in terms of the fund’s rules.”
Lukhaimane ordered SAPS to pay the beneficiaries in both matters the outstanding death benefit plus interest.
THE PENSION FUNDS ADJUDICATOR
The Office of the Pension Funds Adjudicator is a statutory body established to resolve retirement fund-related disputes. For general enquiries or to lodge a complaint, visit www.pfa.org.za, call 012 346 1738 or email [email protected]