Phyllisha Reddy, a woman who cared for her late brother-in-law, Govinda Naidoo, during his final years, has found herself embroiled in a contentious legal battle over his provident fund. After Naidoo’s death in July 2022, Reddy made a claim for the entirety of his death benefit, which amounted to approximately R312,000, arguing that Naidoo had nominated her as his sole beneficiary. Reddy contended that she had been financially dependent on Naidoo, having lived with him for nearly two decades and provided care for him as his health deteriorated. However, her claim sparked a dispute, as other family members, including Naidoo’s children and mother, were also identified as potential beneficiaries.
The Textile Industry Provident Fund conducted an investigation to establish the rightful beneficiaries of Naidoo’s provident fund. In the end, the fund board allocated the death benefit among Naidoo’s family members and Reddy. According to the board’s findings, the distribution was as follows: Reddy was allocated 60% of the benefit, while Naidoo’s son, daughter, and mother received 10%, 20%, and 10%, respectively. Reddy, dissatisfied with this outcome, argued that the children and mother were not Naidoo’s dependents and that the allocation disregarded Naidoo’s wishes. She insisted that she should be entitled to the full amount, claiming she had provided financial and caregiving support during Naidoo’s illness.
However, after further review, the provident fund board revised the allocation. It determined that while Reddy had indeed cared for Naidoo, she had received financial assistance from her husband and father to cover his medical expenses, which affected her claim of total dependency. Consequently, the fund revised the distribution to 30% for Reddy, 10% for Naidoo’s son, 40% for his daughter, and 20% for his mother. This new distribution did not sit well with Reddy, who argued that the revised allocation was unfair and did not reflect what she believed to be Naidoo’s intentions.
Reddy subsequently took her case to the Pension Fund Adjudicator (PFA), seeking to challenge the decision. However, her complaint was dismissed. The PFA explained that its duty was not to determine what was the fairest or most generous distribution of the death benefit but to ensure that the fund’s board had acted rationally and lawfully in its decision. The PFA emphasized the importance of conducting a thorough investigation to identify dependents and make an equitable allocation, but it also stressed that the fund board had broad discretion in determining the beneficiaries. With this rationale, the PFA concluded that the decision was lawful and rational, dismissing Reddy’s complaint.
Dissatisfied with the PFA’s ruling, Reddy sought a reconsideration from the Financial Services Tribunal (FST). However, the Tribunal upheld the PFA’s decision, ruling that Reddy’s complaint was essentially about the board’s exercise of discretion, which fell within the board’s mandate. The FST noted that the scope of discretion granted to the fund board was broad and that the PFA had correctly affirmed the board’s decision. With no evidence to suggest that the board had erred in its allocation, the FST dismissed Reddy’s application for reconsideration. As a result, the dispute over Naidoo’s provident fund appears to have reached its final conclusion, with the distribution remaining as determined by the provident fund board.
