Adjudicator orders repayment of lost benefit after tracing failure

A pension fund administrator has been ordered to compensate a former member after failing to take reasonable steps to trace him and inform him of a small outstanding benefit, which was later depleted by administrative fees.

In a determination dated 2 February 2026, Deputy Pension Funds Adjudicator Naheem Essop found that Tennant Life Benefit (Pty) Ltd, administrator of the Fidelity Guards Retirement Fund (FGPF), had not fulfilled its duty to trace the complainant and allow him to claim his benefit.

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The matter arose after the complainant, who was employed by Fidelity Services Group (Pty) Ltd from May 1998 until May 2024, lodged a complaint relating to his provident fund benefits. His employment was terminated in May 2024, after which he sought to claim his retirement benefits.

The complainant had been a member of FGPF before his employer joined the Private Security Sector Provident Fund (PSSPF) in November 2002. He later became a member of PSSPF from October 2003 until the end of his employment.

Provident fund deductions 

In August 2025, PSSPF paid the complainant a withdrawal benefit of R137 614.48. He, however, was aggrieved by his employer’s failure to submit his retirement claim form timeously and raised concerns about provident fund deductions reflected on his payslip.

PSSPF submitted that the employer began participating in the fund in November 2002 but was non-compliant with Section 13A of the Pension Funds Act.

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The fund said it had issued compliance letters to the employer and reported the matter to the Financial Sector Conduct Authority in line with statutory requirements.

According to PSSPF, the complainant’s fund credit as at May 2025 amounted to R133 199.59, reflecting contributions from October 2003 to April 2020, July 2020 to April 2024 and June 2024.

The employer had been granted a Covid-19 relief contribution holiday between April and June 2020.

Withdrawal benefit 

PSSPF also stated that, under the fund’s rules, full contributions should have been paid from November 2002.

The employer owed an amount of R4 057.11 in respect of outstanding contributions from November 2002 to September 2003 and May 2024, together with late payment interest of R137 784.31 calculated up to 3 July 2025.

The fund provided proof that the withdrawal benefit had been paid in August 2025.

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Essop accepted that all contributions due to PSSPF had been remitted and that the complainant had received the correct withdrawal benefit.

The complaint against the employer and PSSPF was therefore dismissed.

The focus of the ruling was instead on Tennant’s handling of a separate benefit of R1 069.51, transferred to it in March 2018 on behalf of the complainant.

Cost of tracing 

Tennant said it did not receive the complainant’s contact details from the transferring fund.

It added that it did not appoint a tracing agent because the cost of tracing would have exceeded the value of the benefit, which it regarded as falling below its practical threshold for cost-effective tracing.

The employer, meanwhile, submitted that it had asked FGPF whether there had been a bulk transfer of members’ funds to PSSPF but had received no response. It also said the complainant’s claim had been submitted.

In April 2025, FGPF informed the employer that the complainant was listed as an “agterskot” member. It stated that the R1 069.51 transferred in 2018 had been subject to a monthly administration fee of R30 until June 2021, which eventually depleted the benefit. As a result, no amount remained payable.

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Essop rejected Tennant’s justification for failing to trace the complainant. He said Tennant had contradicted itself by claiming that a tracing method costing only R30 was available, yet had not been used.

He found that Tennant had disregarded its responsibilities under rule 27.1.3, which requires boards to take all reasonable steps to trace members or beneficiaries, rather than waiting for them to come forward.

Essop noted that the complainant was unaware of the existence of the benefit held by Tennant. Had he been informed, he could have claimed it before it was eroded by fees.

He concluded that Tennant’s failure to trace the complainant caused him a financial loss of R1 069.51.

Tennant was ordered to pay the complainant this amount, together with interest.

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