Standard Bank Pension Members Heading to Court

Jo-MarÉ Duddy

30 June 2011

The Standard Bank Namibia Retirement Fund (SBNRF), its principal officer and all seven its trustees, as well as Standard Bank Namibia itself, have been sued by disgruntled members who believe they lost millions after their benefits were allegedly incorrectly calculated.

ISG Risk Services, acting on behalf of 122 members, through its lawyers on Monday filed the necessary documents with the High Court. The members are claiming more than N$8,2 million that they believe the SBNRF owes them.

Individual claims vary from N$269,03 to N$552 440,69.

Summons in this regard was served on the bank, the fund, its principal officer and the trustees on Monday.

ISG has been fighting the owners’ battle since last October. The forensic investigators believe that the actuarial reserve values (ARV) of the members were incorrectly calculated when the fund changed from a defined-benefit fund to a defined-contribution fund in 2000.

ISG claims that, under the defined-benefit fund, benefits were calculated using a formula which included the annual salary of a member. The rules of the fund don’t define what annual salary is, but it does say what the salary should be for pension purposes. Pension was deducted from all bonuses of ISG’s clients, according to the payslips provided to the firm.

The bonus cheque therefore forms part of the salary and, as such, should have been included in the calculation of the ARVs at the conversion date, ISG claims. This was never done, they allege.

According to their investigation, the benefits of members were only calculated using 12, and not 13, cheques.

Du Plessis Inc Legal Practitioners, legal representatives of ISG, in its court documents said both the trustees at the time of the conversion and the current trustees have failed in their duty to rectify the error.

They have subsequently also “ignored correspondence regarding this embarrassing error and more specifically, continue to omit or refuse to provide certain information so requested from them regarding the plaintiffs participation in the fund and the calculation/s of the actuarial reserve value of each plaintiff’s benefit as a member to the fund”, the documents state.

The current trustees continue to act “contrary” to the fiduciary duty members expect from a “reasonable trustee”, the documents say, adding that the trustees’ refusal to provide the requested information is “unbecoming of a responsible and diligent trustee”.

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