Old Mutual explains Molefi case complexities after damaging social media firestorm
Johannesburg Stock Exchange (JSE) listed insurer Old Mutual has publicly addressed the complex nature of the Molefi pension fund matter, saying the matter was complicated due to a divorce decree with the family.
The insurer called an emergency media briefing at about 10am on Thursday morning.
The insurance company has taken a significant hit, with boycott calls, and experienced a public relations nightmare in the past week after Sebabatso Molefi went public about how the company was refusing to pay her mother’s portion of her father’s R3 million pension fund.
Old Mutual called a media briefing on Thursday to address the latest developments in the Molefi matter after the company met with the Molefi’s and their legal representatives on Tuesday and Wednesday this week. The Molefi’s and the company have come to an agreement in principle, although further discussions between the two are still ongoing.
During the virtual press briefing, Old Mutual’s director of public affairs, Celiwe Ross said the company had initially been reluctant to talk about the Molefi’s family affairs.
“However based on the public interest in this matter and the damage to our reputation we are of the view there is no alternative but to provide specific context to this case,” said Ross.
She said Old Mutual wanted the public to know that this was a complex matter.
The Molefi case involved a divorce decree on pension assets, that was received after a customer's retirement had been processed.
“We were not informed that the customer was divorced at the time of processing his retirement. At retirement, a portion was taken in cash with the remainder paid into an annuity as legally required by the Pension Funds Act,” Ross said.
She explained the process that Old Mutual had to follow in this case.
“Pre-retirement, divorce orders can entitle non-member spouses to a portion of pension assets in a lump sum, though these are taxable if withdrawn in cash. Post retirement, the allowed format is a portion of the member's annuity income”.
“It was always Old Mutuals intention and commitment to facilitate a settlement between the individuals involved. However, we needed to ensure that in facilitating the pay-out we complied with the pension funds law and tax law,” Ross explained.
Old Mutual said it had investigated ways to solve the problem but required the co-operation of the customer, Mr Molefi, and his family.
“We proposed two alternatives at a meeting with the non-member's representatives on Tuesday, and followed up with detail of what the standard expected tax impacts of each option would be yesterday.
“We are committed to helping to ensure full and final settlement between the two individuals as envisaged in their divorce agreement,” she added.
Countless stories of Old Mutual declining claims
Since the Molefi case went viral and sparked a national outcry, scores of people have come forward to share their stories.
The IOL News team has put some of these to Old Mutual after many X users said their claims have not been paid for frivolous reason.
Ross said Old Mutual paid around nine out of every 10 funeral claims. When claims were not paid, it was mostly due to an inaccurate document and the company tried to assist so that the issue can be resolved and the money can be paid out in days if not hours, she said.
She acknowledged that in certain instances the police may deem the death suspicious and then the company has to adhere to the law and follow the processes set by government and the police.
Ross said Old Mutual may also investigate and find fraud. In instances, the company cannot pay out their claims.
Ross said Old Mutual acknowledged the number of customers that have voiced their unhappiness on X with regarding the insurer’s service. The company said that this is a huge concern to them and that they are actively looking at ways to improve.
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