The correct route to follow when dealing with pension fund adjudicator’s determinations

April 1st, 2020

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The law regulating the South African retirement fund industry is fragmented with different retirement funds being regulated by different pieces of legislation (MC Marumoagae ‘The need for effective management of pension fund schemes in South Africa in order to protect members’ benefits’ (2016) 79 THRHR 614). Nonetheless, the Pension Funds Act 24 of 1956 (the Act) regulates all retirement funds that are operating in the private sector and selected funds that the state is associated with. Some retirement funds, such as the Government Employees Pension Fund, are regulated by their own legislation.

In terms of s 30A of the Act, any person who has a complaint, which meets the definition of a complaint provided for in s 1 of the Act, may ‘lodge a written complaint with the retirement fund for consideration by the board, which must be properly considered and responded to within 30 days’. However, if the fund fails to reply or the complainant is not happy with the response of the fund, the complainant may lodge the complaint with the office of the adjudicator. In terms of s 30D(2)(d) of the Act, the adjudicator must dispose of the complaint ‘in a procedurally fair, economical and expeditious manner’. Pursuant to the amendments brought by the Financial Sector Regulation Act 9 of 2017 (the FSRA), s 30D(2)(a) of the Act now provides the adjudicator an equitable jurisdiction in that ‘[i]n disposing of complaints … the adjudicator must –

(a) apply, where appropriate, principles of equity’.

Section 30E of the Act mandates the adjudicator to ‘investigate any complaint and … make the order which any court of law may make’. In terms of s 30O(1) of the Act, an order made by the adjudicator is regarded as a civil judgment and is the same as any order made by a court of law. Section 30O(2) of the Act, provides an avenue for the enforcement of the adjudicator’s determinations sounding in money through usual civil procedure mechanisms, by making it possible for those who have been awarded a sum of money to approach either a magistrate court or High Court to issue a writ of execution on the strength of the adjudicator’s determination, which can be executed by the Sheriff of the court.

Most importantly, the Act provides a remedy for those who are not happy with the outcome of the adjudicator’s processes. In terms of s 30P(1) of the Act, those who are aggrieved by the adjudicator’s determination may apply to the High Court for relief. It is clear from the wording of the Act that this application is an appeal as opposed to a review. Section 30P(2) of the Act specifically provides that once the application for relief is made, the High Court may consider the merits of the complaint and the grounds on which the determination was based and make any order it deems fit. In interpreting this provision, the Supreme Court of Appeal has held that the High Court is not confined to the information that the adjudicator relied on when making its determination. In Meyer v Iscor Pension Fund [2003] 1 All SA 40 (SCA) at para 8, the court held that: ‘From the wording of section 30P(2) it is clear that the appeal to the High Court contemplated is an appeal in the wide sense. The High Court is therefore not limited to a decision whether the adjudicator’s determination was right or wrong. Neither is it confined to the evidence or the grounds upon which the adjudicator’s determination was based. The court can consider the matter afresh and make any order it deems fit. At the same time, however, the High Court’s jurisdiction is limited by section 30P(2) to a consideration of “the merits of the complaint in question”’.

However, this does not mean that the complaint can be reformulated. According to the SCA ‘[t]he dispute submitted to the High Court for adjudication must, therefore, still be a “complaint” as defined. Moreover, it must be substantially the same “complaint” as the one determined by the adjudicator’. Should the High Court find the adjudicator’s decision to be wrong in law, it has the power to set aside the adjudicator’s decision and replace it with its own decision (see Iscor Pension Fund v Murphy NO and Another 2002 (2) SA 742 (T) at 748). The fact that the High Court can replace the adjudicator’s decision with its own and not return the matter back to the adjudicator for reconsideration leads to speedy finalisation of retirement fund related disputes. This also save costs for those who have contracted legal representatives.

Until 2017, when the legislature promulgated the FSRA, those dissatisfied with the adjudicator’s determination could only approach the High Court for relief. Currently, s 1 of the FSRA, contains the word ‘ombud’ and the phrase ‘statutory ombud’, both of which are defined among others to mean ‘[t]he adjudicator as defined in section 1(1) of the Pension Funds Act’. The adjudicator as ombud and statutory ombud is a ‘decision maker’ in terms of FSRA, and  her determination is referred to as a ‘decision’. In terms of s 218(e) of the FSRA, a decision maker is a statutory ombud who, in terms of s 218(d), makes a decision ‘in terms of a financial sector law in relation to a specific complainant by a person’. Without interfering with s 30P(1) of the Act through an amendment, s 230 of the FSRA provides that ‘[a] person aggrieved by a decision may apply to the [Financial Services] Tribunal for a reconsideration of the decision by the Tribunal’.

The word ‘reconsideration’ can be defined as a process that requires that a decision that has already been taken be looked at afresh. While an issue can be reconsidered by the same person who first looked at it, it appears, however, that in the context of s 230 of the FSRA, it means that the issue must be looked at by another person, namely a member of the Financial Services Tribunal. This is clearly another legislative appeal avenue for those who are aggrieved by the adjudicator’s determination. There is no legislative clarity as to whether those who are aggrieved should first pursue the Financial Services Tribunal or whether they can go directly to the High Court on the strength of s 30P(1) of the Act. It is not clear why the legislature did not explicitly state whether or not an aggrieved person can bypass the Financial Services Tribunal and go directly to the High Court. This is an undesirable state of affairs and requires legislative amendments that will provide clarity as to where the aggrieved persons should first go.

However, it must be noted that s 230(b) of the FSRA provides that ‘[a] reconsideration of a decision … constitutes an internal remedy as contemplated in section 7(2) of the Promotion of Administrative Justice Act [3 of 2000 (PAJA)]’. Section 7(2) of PAJA provides that:

‘(a) Subject to paragraph (c), no court or tribunal shall review an administrative action in terms of this Act unless any internal remedy provided for in any other law has first been exhausted.

(b) Subject to paragraph (c), a court or tribunal must, if it is not satisfied that any internal remedy referred to in paragraph (a) has been exhausted, direct that the person concerned must first exhaust such remedy before instituting proceedings in a court or tribunal for judicial review in terms of this Act.

(c) A court or tribunal may, in exceptional circumstances and on application by the person concerned, exempt such person from the obligation to exhaust any internal remedy if the court or tribunal deems it in the interest of justice’.

In terms of s 230(b) of the FSRA, the Financial Services Tribunal is an internal remedy that must be exhausted in relation to disputes that this forum has jurisdiction over, such as dissatisfaction over the adjudicator’s determination. In Bester v The Compensation Commissioner and Others (GP) (unreported case no 61311/2017, 18-12-2018) (Molopa-Sethosa J) at para 39, the court held that ‘[u]nder the common law, the existence of an internal remedy was not in itself sufficient to defer access to judicial review until it had been exhausted. However, PAJA significantly transformed the relationship between internal administrative remedies and the judicial review of administrative decisions’. In Nichol and Another v Registrar of Pension Funds and Others 2008 (1) SA 383 (SCA) at para 15, the SCA held that:

‘It is now compulsory for the aggrieved party in all cases to exhaust the relevant internal remedies unless exempted from doing so by way of a successful application under s 7(2)(c). Moreover, the person seeking exemption must satisfy the court of two matters: first, that there are exceptional circumstances, and second, that it is in the interest of justice that the exemption be given’.

Does this entail that there is no longer a direct appeal from the adjudicator’s office to the High Court? Is it compulsory for those who are dissatisfied with the adjudicator’s determination to first take the matter to be reconsidered by the Financial Services Tribunal unless there are exceptional circumstances that justify bypassing the Financial Services Tribunal? One is tempted to argue that the answer to both these questions is in the affirmative. However, it is not as simple as that. First, s 7(2)(c) of PAJA is specifically designed to deal with the review of institutions that make administrative decisions. Can the adjudicator’s determination be defined as an administrative decision? There is conflicting judicial opinion on this point. On the one hand, several judgments including Otis (South Africa) Pension Fund and Another v Hinton and Another [2005] 1 BPLR 17 (PFA), recognises that the adjudicator performs a judicial function in line with s 30O(1) of the Act. On the other hand, Beasley AJ in Altron Group Pension Fund v Thompson CSF South African Pension Fund (GJ) (unreported case no 2008/25327, 15-4-2010) (Beasley AJ) at para 25 incorrectly held that ‘the adjudicators functions are administrative and not judicial’. Beasley AJ further incorrectly observed that:

‘A pension fund adjudicator does not function as a court nor is he or she a judicial officer of any court referred to. I am unable to understand how he or she can ever be “deemed” to be such a court or officer. Further, the adjudicator per se is not so deemed under s 300 of the Act; it is merely provided that the decision shall be equivalent to that of a court. The intention of this section appears to me to be designed at facilitating the process of executic, following upon any such decision’.

This statement is unfortunate and appears to be either a judicial misreading of s 30O of the Act or total misunderstanding of the intention behind this provision. This provision recognises that the adjudicator is an independent umpire between a complainant and the person the complaint is against. The adjudicator is tasked with finding the relevant evidence that would assist them to decide the matter in favour of one of the parties, in the same way a court of law will do. Hence, the adjudicator’s office is deemed to deliver ‘judgments’ similar to those of the court of law. The adjudicator performs judicial functions that the Act specifically prescribe and that they should be taken on appeal not review when parties are dissatisfied with them (M Mhango ‘Does the South African Pension Funds Adjudicator perform an administrative or a judicial function?’ (2016) 20 Law, Democracy & Development 20 at p 45). On this reasoning, it appears that it is not compulsory for those who are dissatisfied with the adjudicator’s determination to send them to the Financial Services Tribunal before they can appeal to the High Court.


In conclusion, I submit that if it was the legislature’s intention to make it compulsory for those who are dissatisfied with the adjudicator’s determinations not to bypass the Financial Services Tribunal, there must be legislative amendment to the FSRA and the Act. These amendments must make it clear that the adjudicator’s determinations must be sent to the Financial Services Tribunal for reconsideration before they can be appealed to the High Court. I submit that the power to remit matters to the adjudicator for further consideration should be limited. In order to save time and not to unnecessarily burden the adjudicator’s office, I submit that the Financial Services Tribunal should be empowered to not only reconsider the evidence provided to the adjudicator but must also be empowered to hear new evidence, in order for it to substitute the decision of the adjudicator with its own decision.

Clement Marumoagae LLB LLM (Wits) LLM (NWU) Dip Insolvency Practice (UP) is a legal consultant at Rambevha & Morobane Attorneys and a senior lecturer at the University of Witwatersrand in Johannesburg. Mr Marumoagae is also a council member of the Legal Practice Council.

This article was first published in De Rebus in 2020 (April) DR 17.

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