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pfaBL Premium reports that the Pension Funds Adjudicator (PFA) has ordered the Municipal Gratuity Fund to reimburse a former Pikitup employee for funds that were misappropriated by a syndicate while he was incarcerated.

The fund disbursed more than R800,000 to a syndicate involved in identity theft and fraudulent claims for retirement fund benefits. PFA adjudicator Muvhango Lukhaimane ordered the fund to pay the complainant the benefit due to him with interest because the fund had a fiduciary duty to exercise its functions with care, due diligence and good faith. The complainant was aggrieved that the fund processed a withdrawal benefit claim without his presence, and subsequently paid the benefit to the wrong person based on fraudulent documents. In September  2018, the complainant’s fund credit of R810,413 was paid to an incorrect person while he was in custody. The complainant contended that the photo on the identity document submitted to the fund did not belong to him. The fund considered an affidavit from correctional services claiming to represent him. But, the affidavit was not stamped and signed as required. The complainant also submitted that the fund accepted a withdrawal claim form that had errors. In her determination, Lukhaimane said the fund had failed in its duties towards the complainant when it did not seek to  further confirm his imprisonment status before paying out. Thus its act and/or omission was reckless. She instructed the fund to ensure that proper mechanisms, and checks and balances are in place to combat fraud.

  • Read the full original of the report in the above regard by Noxolo Majavu at BusinessLive (subscriber access only)

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