Introduction
The Financial Services Tribunal's decision in Sehlabaka v The Pension Funds Adjudicator & Others delivers a stern reminder: the three-year time limit for filing complaints with the Pension Funds Adjudicator ("the Adjudicator") is not a flexible rule, but it is a strict legal requirement. If a complaint is brought after that period, the Adjudicator has no jurisdiction to consider it, no matter how compelling the grievance.
This case illustrates the legal and practical consequences of delay in pension fund disputes, and explains how the Financial Services Tribunal ("the Tribunal") applied both the Pension Funds Act ("PFA") and the Prescription Act to reach its decision.
Background and the Complaint
Mr Thabiso Zakaria Sehlabaka was employed by Sasol Africa (Pty) Ltd from 15 February 1988 until his retrenchment on 31 January 2015. During this period, his membership was transferred under section 14 of the PFA, from the First Fund to the Second Fund, and ultimately to the Third Fund.
Upon retrenchment, Mr Sehlabaka was paid a withdrawal benefit of R1,824,016.11 in April 2015. In November 2019, he received a further payment of R26,777.32. Nearly five years later, on 13 August 2024, he lodged a formal complaint with the Adjudicator. His complaint was based on several concerns, including:
- An allegedly incorrect SARS tax deduction of R15,049.20;
- A lack of explanation for two periods of unaccounted service: 1988 to 1995 and 1995 to 2005;
- Allegations that he never signed transfer forms or exit documentation;
- Alleged administrative irregularities, including discrepancies in transactional statements and fund membership details.
He submitted that he only realised something was amiss in early 2024 after retrieving and reviewing his records from the fund administrators.
The Legal Position on Time-Bars
On 5 December 2024, the Adjudicator declined to investigate the complaint. The complaint was submitted more than three years after the events it related to, and the Adjudicator ruled that she lacked jurisdiction to entertain the complaint under the PFA.
This is not a matter of discretion or policy. It flows directly from Section 30I(1) of the PFA, which provides:
"The Adjudicator shall not investigate a complaint if the act or omission to which it relates occurred more than three years before the date on which the complaint is received by him or her in writing."
Prior to 2007, this Section contained a further provision that gave the Adjudicator discretion to condone late complaints where "good cause" was shown. However, that Section was repealed by the Pension Funds Amendment Act 11 of 2007, and the Tribunal was quick to point this out. This means that even if a complaint is factually persuasive, it cannot be entertained if it falls outside the three-year statutory window.
Does the Prescription Act Offer Relief?
Mr Sehlabaka argued that the three-year period should not have begun until early 2024, when he came to understand the possible discrepancies in his pension benefits. He relied on the principle in Section 12(3) of the Prescription Act, which states that prescription only begins to run once the claimant has knowledge of:
- The identity of the debtor; and
- The facts from which the debt arises.
However, this provision adds a crucial qualifier: a person is deemed to have this knowledge if they could have acquired it by exercising reasonable care.
The Tribunal applied this test to the facts. It found that Mr Sehlabaka:
- Received benefit payment letters in 2015 and 2019, which contained detailed breakdowns of the amounts paid, tax deducted, interest accrued, and a clear statement that the payments were full and final;
- Was informed in writing that SARS had issued a tax directive;
- Had access to benefit statements, fund contact information, and tax certificates.
In the Tribunal's view, he either knew, or should have known, all the material facts by the time the payments were made. The law does not require a person to fully understand legal conclusions, only to be aware of the material facts giving rise to the claim.
Was the Delay Justified?
The Tribunal held that:
- A reasonably diligent person would have taken steps earlier, especially after receiving benefit breakdowns;
- Ignorance of the Adjudicator's existence is not a legally recognised reason to postpone the running of prescription;
- The delay was excessive and unexplained.
The Tax Deduction and the Limits of the Adjudicator's Role
On the issue of the R15,049.20 SARS deduction, Mr Sehlabaka argued that the amount was never paid over to SARS and remained owed to him by the fund. The Tribunal dismissed this claim on the following grounds:
- The deduction was lawful, and was made in accordance with a SARS tax directive.
- The fund is legally obligated to deduct tax and submit it to SARS before making any payment.
- If the applicant believed SARS did not receive the payment, his remedy lies with SARS, not the fund.
The Tribunal also emphasised that the benefit breakdown letter from 2019 made the tax deduction clear, and that no challenge was raised at the time.
Final Finding: No Jurisdiction, No Investigation
In conclusion, the Tribunal confirmed that the Adjudicator acted correctly in declining to investigate the complaint, as she had no jurisdiction to do so once the three-year period had lapsed. The application for reconsideration was accordingly dismissed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
