Pension fund administrator ordered to pay after failing to trace beneficiary

A pension fund administrator has been criticised for failing to trace a beneficiary, resulting in the loss of his entitlement.

In a determination, Deputy Pension Funds Adjudicator Naheem Essop ruled that Tennant Life Benefit (Pty) Ltd, administrator of the Fidelity Guards Retirement Fund (FGPF), should have used the appropriate tracing method to locate the complainant and enable him to claim his benefit. Tennant failed to do so.

Tennant argued that tracing the complainant would have cost more than the benefit available. The complainant, employed by Fidelity Services Group (Pty) Ltd from May 1998 until May 2024, was previously registered as a member of FGPF before the employer joined the Private Security Sector Provident Fund (PSSPF) in November 2002.

The complainant was paid a withdrawal benefit of R137 614.48 on 11 August 2025 by PSSPF. He was aggrieved by the employer’s failure to submit his retirement claim form and produced a payslip dated April 2022 reflecting a provident fund deduction of R194.80.

PSSPF confirmed his membership commenced in October 2003. As at May 2025, his fund credit stood at R133 199.59, representing contributions from October 2003 to April 2020, July 2020 to April 2024, and June 2024. The fund noted that the employer had been granted a COVID-19 relief contribution holiday between April and June 2020. PSSPF further stated that the employer owed R4 057.11 in outstanding contributions, with late payment interest of R137 784.31 calculated up to July 2025.

Tennant submitted that it received a transfer value of R1 069.51 in March 2018 on behalf of the complainant but was not provided with his contact details. It said a tracing agent was not used because the cost would have exceeded the benefit, which was below its threshold for cost-effective tracing.

The employer confirmed the complainant was employed as a security officer from May 1998, registered with FGPF from April 2002 until September 2003, and later transferred to PSSPF until his termination in May 2024. FGPF submissions indicated the complainant was listed as an “agterskot” member, with the R1 069.51 benefit depleted by monthly administration fees of R30 until June 2021.

Essop found that the complainant had been paid the correct withdrawal benefit by PSSPF and dismissed the complaint against the employer and the fund. However, he ruled against Tennant for failing to trace the complainant.

“This submission contradicts Tennant's claim that a tracing method, costing only R30.00, was available for use in this case, yet it was not employed. Tennant disregarded its responsibilities to the complainant by not complying with rule 27.1.3, which states that the board has a legal duty to take all reasonable steps to trace members or beneficiaries rather than just waiting for them to come forward,” Essop says.

“In his submissions, the complainant made no mention of the benefit transferred to Tennant on his behalf. This clearly indicates that the complainant was unaware of the existence of the benefit that was due to him held by Tennant. The complainant could have claimed the benefit if Tennant tracked him down and promptly informed him of its existence before the benefit was depleted by administrative costs," says Essop.

He concludes that Tennant’s failure to trace the complainant caused him to suffer a financial loss of R1 069.51. He ordered Tennant to pay the complainant the amount plus interest.

PERSONAL FINANCE