Caregiver’s Fight for Provident Fund Dismissed by Tribunal

A woman’s attempt to claim 100% of her late relative’s provident fund was dismissed by the Financial Services Tribunal (FST). The case sheds light on how death benefits are distributed and the challenges involved in disputes.

Background: The Caregiver’s Claim

Govinda Naidoo, a member of the Textile Industry Provident Fund, died in July 2022. His provident fund, valued at R312,000, was to be distributed among his dependents.

Naidoo lived with Phyllisha Reddy, a relative of his late wife, for 20 years. She cared for him during his illness and claimed he had nominated her as the sole beneficiary. Reddy argued she was financially dependent on him and deserved the full amount.

Initial Distribution of Funds

The provident fund board investigated the matter. They identified Naidoo’s son, daughter, and mother as additional dependents. The board initially divided the fund as follows:

• 60% to Reddy
• 10% to Naidoo’s son
• 20% to his daughter
• 10% to his mother

Reddy objected, arguing the other dependents were not financially reliant on Naidoo.

Revised Allocation

After a review, the board adjusted the distribution:

• 30% to Reddy
• 10% to Naidoo’s son
• 40% to his daughter
• 20% to his mother

The board noted that Reddy received financial help from her husband and father to support Naidoo during his illness.

Complaint to the Pension Fund Adjudicator

Reddy took her case to the Pension Fund Adjudicator (PFA). She claimed the board ignored Naidoo’s wishes and that the decision was unfair.

The PFA dismissed her complaint, explaining that:

• Their role is to ensure the board acts lawfully and equitably.
• The distribution doesn’t have to be the most generous or align with one party’s expectations.

Final Decision by the Financial Services Tribunal

Unhappy with the PFA’s ruling, Reddy sought relief at the FST. She argued the PFA mishandled its discretion.

The FST disagreed, stating:
“The board’s discretion is broad and its decision-making is sound.”

The tribunal dismissed Reddy’s application, ending the dispute.

What This Case Means

This case highlights the complexities of death benefit claims. Provident fund boards must prioritize equitable distribution, focusing on lawful and rational decisions.