Metropolitan Life of Botswana Limited faces a battle to protect its reputation after being accused of unfair and illegal practice against clients’ policy regulations.
One former client, Esau Jokonya blames the company for withholding his funds after exiting a policy.
Jokonya narrates that in 2008 he purchased a Retirement Annuity Policy from the pension fund provider after he had left his employment with Botswana Defence Force. The pension funds were reportedly coming from Botswana Public Officers Pension Fund (BPOPF), through its administrators Alexander Forbes.
Jokonya re-joined the civil service and subsequently on April 6, 2018, he instructed Metropolitan to terminate his policy and transfer the funds to BPOPF. “BPOPF then duly wrote to the Respondent, confirming that the Applicant is its member and also confirming that the Applicant wanted his funds transferred to them,” read his papers.
However, according to Jokonya during his case before Judge Jennifer Dube last week, Metropolitan declined to transfer the deferred funds.
He approached the court to challenge the pension provider’s refusal with the funds on account that there was no such policy that prevented the transfer of funds. His lawyer, Uyapo Ndadi submitted that the pension provider’s policy specifically makes provision for the transfer of benefits.
Ndadi argued that the provision under transfer and benefits clearly stated: “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.”
More so that under the same section, it expressly provided that the policyholder was entitled to transfer his or her lump-sum proceeds to another registered fund. The lawyer said it was therefore his client’s submission that the policy was legally binding and enforceable in so far as it provided for the above.
On the position of law, Ndadi argued that the law allowed 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.
In other words, the law allows for funds to move between Funds. 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,” he said.
While on the legality, he submitted that in the event that the court holds that they were wrong in the reading of the Clause A 1.4. of Metropolitan’s Retirement Annuity Fund Rules and the reading of the law, there needs to be a way out for the client either way.
He submitted that by not giving members an opportunity to transfer to other funds was illegal as it would essentially, be locking a consumer into a contract without any means of terminating the same or moving to another fund, which was untenable and contrary to public policy.
Meanwhile, Metropolitan in their defence argued that the reason for the refusal was that the Retirement Annuity Fund Rules do not provide for cessation of membership by transferring funds out of the Fund.
According to Metropolitan’s attorneys from Desai Law Group, their refusal not to accede to a transfer of the client’s benefit stemmed from its rules, which the client has been aware of since he became their member on the Retirement Annuity Fund.
“The Pension and Provident Fund Act, which is the act established to provide for the regulation and provident funds, does not make provision for the regulation of how a service provider such as the respondent, providing pension and retirement services, is to conduct its funds and the procedures and rules which it is to adopt in the commencement, setting up, running or termination of such funds,” reads the papers.
Metropolitan highlighted that under its rules it is permitted and empowered to adopt rules, which it deemed fit for its operation and it has done so by providing in the rules that membership of a member shall only cease on two counts.
Firstly, where contributions cease to be made and the member is no longer entitled to any benefits from the Fund or when the Fund is dissolved.
Further, Metropolitan stated that the rules were also not harmful to the public interest, do not promote harmful tendencies and do not contravene public policy. Judgment has been reserved.