1 Mungal v Old Mutual Life Assurance Co SA Ltd; Freeman v Old Mutual Life Assurance Co SA Ltd [2010] 1 BPLR 11 (SCA) (Mungal).

2 “A market level indicator also known as a market-value adjuster is simply an actuarially determined rate to calculate downwards a fund's market value against its smoothed value, when the fund's market value is below its smoothed value, for an investor who surrenders his policy before it matures. It is not applied when the fund's market value exceeds its smoothed value. Its purpose is to protect investors who remain in the fund, to ensure the fund's assets are not eroded by investors who exit early at times of market weakness. The market level indicator is the mechanism by which the cross-subsidisation, which enables the ‘smoothing’ of returns, can take effect. It is always a downwards adjustment; the flip-side is bonuses, which are always upwards”. See Today's Trustee “Smooth-bonus policies: Out of the rough” (December 2008), available at: <http://www.totrust.co.za/200811_bonus.htm> (last accessed 2 May 2013).

3 N Jeram “Jurisdiction of the Pension Funds Adjudicator in respect of complaints by underwritten insurers” (2010) Insurance and Tax Journal 1.

4 Marx, G and Hanekom, KThe Manual of South African Retirement Funds and Other Employee Benefits (2007, LexisNexis) at 16–17Google Scholar, discussing the different kinds of pension funds, including underwritten funds.

5 Mungal, para 4.

6 Ibid.

7 Ibid.

8 Id, para 5.

9 Ibid.

10 The Ombudsman for Long-Term Insurance is accredited under the Financial Services Ombud Schemes Act 2004.

11 Mungal, para 8.

12 Ibid.

13 Ibid.

14 Ibid.

15 Ibid.

16 Id, para 9.

17 Ibid.

18 Ibid.

19 See also Spearman v Salt Rock Hotel Pension Fund [2001] 9 BPLR 2526; Khambule v CNA Ltd (1) [2001] 9 BPLR 2472 (where the trustees, who had responsibility for considering and approving housing loans, had delegated this responsibility to an independent consultant, with adverse consequences; it was shown that the consultant had not acted in the members' best interests in the granting of housing loans and that the trustees acted ultra vires by their omission to take reasonable steps to protect members' interests); Shell Southern Africa Pension Fund v Sligo and Others [1999] 11 BPLR 235 (PFA) (holding that a dispute relating to a discretionary payment provided for in an instruction from the employer to a pension fund is not a dispute relating to interpretation and application of rules of the fund).

20 Mungal, para 10.

21 Ibid.

22 Old Mutual Life Assurance v The Pension Funds Adjudicator [2008] 2 BPLR 97 (D); Mungal and Another v Old Mutual [2010] 2 All SA 139 (SCA); 2010 (6) SA 98 (SCA); Mungal v Protektor Preservation Provident Fund and Another [2006] 2 BPLR 149 (PFA); and Freeman v South African Retirement Annuity Fund case no PFA/KZN/2799/05/KM (2006) (unreported).

23 N Jeram “Participating employers under scrutiny in disability claims” (2008) 29 Industrial Law Journal 51 at 51–57, discussing the practice by funds of re-insuring disability benefits and the jurisdictional problems associated with this.

24 Ibid.

25 Ibid.

26 For a discussion of this problem in the South African context, see Van der Linde v Telkom Retirement Fund [2004] 11 BPLR 6257 (Van der Linde); M Mhango “When should a pension fund require a member to undergo medical treatment as a condition for receiving permanent disability benefits? A critical review of the Pension Fund Adjudicator's determinations” (2007) 28 Industrial Law Journal 1472, discussing Van der Linde and the problems of re-insurance agreements. See det no D06/07\136 on total permanent disability decisions and trustees' fiduciary duties by the Superannuation Complaints Tribunal, describing this practice and the problems associated with it as undesirable in Australia (1 April 2007 – 30 June 2007) 48 Quarterly Bulletin 1 at 9–10.

27 See Van der Linde; Pienaar v Consol Group Pension Fund PFA/GA/97/98 (unreported), where a dispute concerning the failure of the employer to submit a disability claim with the fund on a member's behalf was deemed not to constitute a complaint; and Seethal v Metal and Engineering Industries Permanent Disability Scheme PFA/KZN/2719/01 (unreported), which held that a dispute concerning the repudiation of a permanent disability claim by a permanent disability scheme was not a complaint within the meaning of the PFA because the permanent disability scheme was not a pension fund organization.

28 See Hildebrand v Telkom Retirement Fund [2005] 5 BPLR 405; De Wet v Cargo Carriers Retirement Fund [2004] 5 BPLR 5682; and Leoschut v National Health Laboratory Services Retirement Fund PFA/WE/6720/2005/NVC (2007) (unreported).

29 See Robinson v Randfontein Estates Gold Mining Company Ltd 1921 AD 168, discussing the common law fiduciary duties of trustees.

30 This applies when contracting with service providers such as administrators. See Rhode v University of the Western Cape Provident Fund (1) [2001] 10 BPLR 2618.

31 Above at note 26.

32 Id, para 11.

33 Id, para 41. See also Jeram “Participating employers”, above at note 23 at 51–57, discussing the practice of funds re-insuring disability benefits and the jurisdictional problems associated with this, and Mhango “When should a pension fund require”, above at note 26, discussing Van der Linde and the problems of re-insurance agreements.

34 See det no D06/07\136, above at note 26.

35 Id, para 53.

36 Mungal, para 9.

37 Id, para 10.

38 Ibid.

39 Id, para 8.

40 See also Central Retirement Annuity Fund v Adjudicator of Pension Fund [2005] 8 BPLR 655 at 660, suggesting a focus on the substance of a complaint to determine compliance with the definition in the act, and rejecting a formalistic reading of a complaint.

41 See Sekele v Orion Money Purchase Pension Fund (2) [2001] 6 BPLR 2148; Seloane v Ledeen Provident Fund [2002] 2 BPLR 3107 (Seloane); and IBM South Africa Pension Fund v IBM South Africa (Pty) Ltd [2004] 9 BPLR 6061.

42 Seloane at 3113.

43 IBM South Africa Pension Fund, above at note 41 at para 12.

44 Mine Employees Pension Fund v Murphy 2004 11 BPLR 6204, pronouncing that the Adjudicator is constrained by the issues as pleaded in the complaint and that the Adjudicator's office does not give him any general power to investigate issues and or formulate issues for investigation of his own accord; Otis Pension Fund v Hinton [2005] 1 BPLR 17 (PFA), explaining (at 18) that “the intention of the legislature [regarding the PFA] was to constitute a complaints forum which would, for all practical purposes, be equivalent to a court of law but which was not bound by the formalities of procedure which might ordinarily have the effect of delaying adjudication and causing the parties to incur substantial expenses for legal representation”.

45 Central Retirement Annuity Fund v Adjudicator of Pension Fund [2005] 8 BPLR 655 (C).

46 Id at 660.

47 See S Khumalo “Jurisprudential role played by the Pension Funds Adjudicator in South African law” (paper presented at the Pension Lawyers Association, Cape Town, 5 March 2006) at 46–49, available at: <http://www.bowman.co.za/FileBrowser/ArticleDocuments/Pension-Funds-Adjudicator-Jurisprudential-Role.pdf> (last accessed 12 May 2013). This paper is critical of any rigid interpretation of the definition of a complaint and characterizes a broad construction as the “correct and sensible approach”, further arguing that a factory worker, who simply has a complaint that his or her pension is too small and files a complaint with the Adjudicator that the fund has not treated him or her fairly, should be able to have his or her complaint adjudicated by requiring the Adjudicator to look at the entire situation in relation to the fund to determine whether the worker received the benefit to which he was entitled under the PFA and the rules.