- Refuses to terminate Policy
- Client sues Metropolitan
- Metropolitan barres ex-BDF employee to decide on his investment
Life insurance firm, Metropolitan Botswana is refusing to release and transfer pension benefits belonging to a client that sought to relocate and continue the pension fund at Botswana Public Officers Pension Fund (BPOPF) after the client became a civil servant, court documents reveal.
Judgement is reserved in a case in which Esau Nong Jokonya has dragged Metropolitan to court for denying him a choice of housing his pension money at BPOPF, a Fund of his choice.
Jokonya bought a Retirement Annuity Policy with an issue date of 9 December 2008 from Metropolitan under policy number 4283922532 after leaving the employ of Botswana Defence Force (BDF). At that time, the pension benefits were transferred from the BPOPF through its then fund administrators Alexander Forbes to Metropolitan. The reason why Jokonya transferred the pension benefits from the BPOPF to Metropolitan was because at the time, Jokonya was no longer a public servant. Since the BPOPF houses public servants, Jokonya had no choice but to seek a company that offers services to employees in the private sector as well, hence he became a Metropolitan client.
Jokonya has since re-joined the Botswana Government. On the 6th of April 2018, he instructed Metropolitan to terminate his policy with it and to transfer his funds to the BPOPF, but Metropolitan refused, saying Metropolitan rules are against the termination of the policy. Metropolitan responded to Jokonya in a letter dated 27 April 2018, in which the company refused to transfer the deferred benefits of its client saying that in terms of the rules, a member’s membership can only cease under two circumstances. The conditions are where contributions of the member cease and such member is no longer entitled to benefits from the Fund or in a case of dissolution of the Fund. Post refusal by Metropolitan to move Jokonya’s retirement annuity portfolio to the BPOPF, Metropolitan was responding through its Attorney Obrien Bvindi from Desai Law Group.
Jokonya approached the High Court through his attorneys Ndadi Law Firm, in which he wants the Court to declare Metropolitan’s refusal to terminate and transfer the benefits held under the Retirement Annuity Fund as unlawful and Contra bones mores or morally wrong in simpler terms. Jokonya in addition sought termination of the Policy he has with Metropolitan as well as the transfer of the benefits from the Fund to the BPOPF. Metropolitan’s decision in terms of its letter dated the 27th of April 2018, the refusal to heed the Jokonya’s instruction is anchored on Article 1.4 of the Metropolitan Life Retirement Annuity Fund Rules which provides that a Member’s membership ceases only, according to Article 1.4.1, when his/her contributions cease and he/she is no longer entitled to any benefits from the fund; oras per Article 1.4.2, on dissolution of the Fund, whichever comes first. Jokonya’s Atorney, Uyapo Ndadi, Managing Partner at Ndadi Law Firm argues that in essence, this rule means that the moment a member stops making contributions towards the Fund the membership would cease. According to Ndadi, in the case where contributions are done monthly and the member stops making payments the membership would automatically lapse. Further he argued that in the context of this case, the client’s contribution to the fund was a once off payment (purchase) and not monthly as is generally the case with pensions.
“The implementation of the instruction to transfer funds to another fund has the effect of ceasing contributions because the contribution made by the Applicant would no longer be available in the Fund administered by the Respondent,” Ndadi said, adding that it follows therefore that once Jokonya moves his funds elsewhere he would no longer be entitled to any benefit with the Metropolitan.
“We therefore submit that on the strength of Clause 1.4, the Applicant is entitled to transfer his funds to another Fund by ceasing his membership by stopping his contributions to date,” Ndadi said.
The lawyer also argued that the Metropolitan Pension Provider Policy does not prohibit transfers. To him, the Pension Provider Policy itself from Pages 10 to 17, provides that, “Any person entitled to an annuity (pension) under this policy may request Metropolitan to transfer the lump-sum proceeds to any registered fund for the purpose of purchasing such an annuity.”
Under this Section, Ndadi said it expressly provides that the policy holder is entitled to transfer his or her lump-sum proceeds to another registered fund.
It is Jokonya’s submission that this policy is legally binding and enforceable in so far as it provides for the above.
In addition, Jokonya’s attorneys argue that, a further look at the Retirement Annuity Fund Rules, in particular Clause A 1. 3, it provides that the Principal Officer may make arrangements in consultation with the insurer for the taking-over of the membership of other retirement annuity funds that are insured by the insurer, subject to such conditions as the Principal Officer and Insurer may deem fit.
In reading the above provision, Ndadi argued that it is further evident that the Respondent is able to receive the transfer of benefits from other Funds when a member takes up a retirement annuity policy under it. “As such, on their own, the two provisions/ clauses cited above provide context supporting the fact that a member is able to terminate their membership by transferring their cumulative funds to another Fund. This is more especially looking at the fact that the Respondent is able to receive funds from other insurers when a client wishes to change their membership to that of the Respondent.”
According to Ndadi’s arguments, the law allows for funds to be moved from one fund to another. In terms of the Retirement Funds Regulations, termination of membership under a Fund is allowed. He argued that Section 35 (2) (a) states that, Retirement benefits may be transferred from an employer’s pension fund or another preservation fund into the preservation fund. Section 35 (3) (d) & (h) provides that the benefits from a pension or provident fund may only be transferred into the preservation fund if, a member of a preservation fund choses to transfer to another preservation fund; or a transfer between two preservation pension.
The matter was argued on the 13th March 2019 in Lobatse before Justice Jennifer Dube. Judgment will be delivered on the 31st May 2019.