A former Absa employee took the bank to the Financial Service Tribunal (FST) after he was denied accessing a portion from his R7.3 million pension fund.
Hermann Matthysen Shaw started working for Absa in January 1989 until he retired in April 2022.
Upon retirement, Shaw elected to receive an in-fund pension from Absa pension fund, also known as a living annuity.
The value of his share at his retirement date was over R7.3 million and Shaw was entitled to take up a one-third lump sum, over R2.3 million.
However, Shaw only took R800,000 and the balance was invested into a living annuity.
After some time, Shaw found himself in financial difficulties and approached the bank to withdraw R650,000 from his life annuity, unfortunately, the request was denied.
Following the refusal, Shaw sought relief from the Pension Funds Adjudicator (PFA) and his application was dismissed.
He approached the FST seeking to overturn the PFA's decision on the basis that he was facing significant financial hardship.
Shaw said the PFA failed to consider the proof of his entitlement to financial relief.
He further added that he was not informed of the entitlement to withdraw R2.3 million when he retired
He claimed that the advice communicated at the retirement meetings was not clear which led to his confusion about not being able to make further withdrawals post-retirement.
Moreover, he was pressured during the Covid-19 period to sign the documents related to his retirement funds.
However, the bank produced ample evidence showing that they had communicated with the man via phone, email, and MS TEAMS regarding his retirement fund and what he was entitled to withdraw when he retires.
One of the emails also showed that he was told the if he chose living annuity, he will not be able to change the option after retirement.
Absa further argued they would be acting contrary to the Income Tax Act, the Pensions Fund Act, and their rules should they acquiesce to the man's request.
Looking at the facts presented, the FST said the PFA's decision against the man cannot be criticised.
Shaw's application was dismissed.
IOL News