🔒 Disgruntled ex-Sanlammer’s claim of unfair treatment prompted extensive denial by financial services group

Biznews has covered the story of financial advisor David Melville who found himself on the wrong side of Sanlam bureaucracy. The life insurer was also in the spotlight for a practice of backdating new life policies – even though it wouldn’t pay out for a death if that occurred before the official starting date of a life insurance policy. This has prompted ex-Sanlam employee, Alfred Perry to contact us; he said he came up against a brick wall when Sanlam lowered his pensionable age from 65 to 60 when he had to retire because of a medical condition. Sanlam came back with a quick response saying it cares greatly for the company’s retired advisers, the rules in terms of retirement are clear and Perry can lodge a formal complaint. – Linda van Tilburg

Alfred Perry says he was a Sanlammer for 31 years but was forced to go on medical pension in 2015. He said in the 26 years that he worked for the insurer there had never been any complaints from colleagues or clients about his behaviour. He had never been ‘on the red carpet’. Not only was he a loyal employee, he recruited about 20 people to join the company.

However, when he was put on medical pension, Sanlam changed his retirement age to 60 instead of the 65 years stated in his original contract. Perry said this put him in a difficult position as he had been planning for recurring income until the age of 65. The importance of planning was drilled into him by Sanlam. He said when he questioned Sanlam’s decision to change his retirement age; he was informed that, ‘when you go on medical pension, your contract at Sanlam changes to 60… finish and  klaar.”

Perry said management at Sanlam does not care what happens to its old employees when they go on pension as they had no value for the company after that. He says he does not generate business for Sanlam anymore and he feels that the insurer is no longer interested in him. The ex-Sanlam worker says he thinks changing his retirement age from 65 to 60 was unreasonable. He acknowledged that it was written into his initial contract and that they had a right to change the rules if they wanted to, but he thought that was not fair. Perry says Sanlam has the right to do what it likes and ex-employees have no recourse and can’t do anything about it.

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Perry said as a broker he was entitled to recurring income from commissions and he was supposed to receive recurring income from March/April 2015 to March/April 2020. However in October last year, Sanlam stopped his contract and the recurring monthly income came to a halt. He said he had spoken to Sanlam and received emails from the insurer and they promised to correct mistakes that had been made, but nothing had happened; nobody contacted him.

Perry is also unhappy about the fact that Sanlam has decided to sell his shares without his permission. He was told that his shares in the company had been sold but he had not received any proof that Sanlam had actually done that. They may have actually proceeded but he had no proof of that and despite several requests to the company; he had still not received any confirmation.

Perry accused Sanlam of Big Bully tactics. “You are fighting a fight you can’t win. They have all the money and all the time on their side, they’ve got all the resources and they take their time. There were many other ex-Sanlam employees who were in the same position, who felt they had been treated unfairly,” he said. Many don’t want to come forward because they don’t want to be on the wrong side of Sanlam. He said, “Ek loop my vas teen mure.”

But Sanlam disagrees and the response is below.


Sanlam’s response

By Theesan Moodley*

Sanlam is disappointed to read and learn of Mr Perry’s complaints and his perception of our company. He was indeed a loyal Sanlam adviser who served our company very well over many years and we are very appreciative of his service.

We hope the following response will help to shed light on Mr Perry’s complaints:

Sanlam, on no occasion whatsoever, placed any pressure on Mr Perry to ‘go on medical pension’. The decision was entirely his own and he voluntarily embarked on the process to be declared permanently disabled in terms of the Sanlam Group Life Insurance Scheme and Group Income Scheme for Advisers.

As a seasoned adviser, we find Mr Perry’s surprise at the early retirement age rules which apply in the case of both the Sanlam Group Income Care scheme as well as in the Pension Fund for Advisers, surprising.

These are longstanding rules and are clearly set out. Advisers in Sanlam’s service are informed of the rules via the Information Book as well as via newsletters on a regular basis.

The Sanlam Group Income Care Scheme, an employer-sponsored scheme, states that any member who receives permanent disability benefits will be required to retire as a member of the Pension Fund at age 60. After age 60 normal retirement benefits become payable.

Similarly, the Pension Fund for Advisers states that a member who receives disability income in terms of the Sanlam Group Income Care scheme, will remain a member of the pension fund until the earlier of either the individual’s normal retirement date or the date on which the disability income insurance policy benefit ceases.

The rules were neither changed nor implemented in any special manner insofar as Mr Perry was concerned.

Sanlam, in fact, strongly supports advisers in this context, so while Mr Perry could no longer render advice to clients when he retired (because he was no longer a registered representative of Sanlam on either our licence or that of the FSCA), he continued to receive income payments from the Sanlam Group Income Scheme – even though he no longer makes any further contributions to the scheme. This is a rule of the scheme.

In addition, regular pension fund contributions continue to be made on his behalf during the period in which he receives the disability payments; while family funeral cover remains intact with no further contributions required; as does Sanlam Group Trauma insurance (for an unrelated trauma) – without any requirement for further contributions.

With regard to Mr Perry’s unhappiness surrounding his recurring premium income: When Mr Perry was declared permanently disabled, he received a monthly payment for commission from October 2015 (backdated to March 2015). In October 2019 he turned 60, and this necessitated a change in his contract in order to accommodate his retirement. As a result of this change, the payment of recurring commission was also stopped. As soon as Sanlam become aware of this, a reconciliation was processed and all payments due to Mr Perry were paid on 11 February 2020. As Mr Perry correctly stated, the payment of these recurring commission should have been for 5 years from March 2015 to March 2020 and we continue to honour this agreement.

Mr Perry’s assertion that Sanlam had sold his shares without his permission is incorrect.

Sanlam‘s Pension Fund for Advisers (a free-standing Pension Fund) migrated to the Sanlam Umbrella Fund (SUF) on the 1 September 2019. This decision holds numerous benefits for members and offers them greater investment opportunities. Unfortunately it was not viable for the SUF to accept any Sanlam Demutualisation Shares as part of Adviser members’ fund values upon transfer. This fact was communicated with all members before the transfer.

In the same communication, advisers were informed that their shares would, accordingly, be sold before the transfer and the proceeds (less an administration fee) would be added to their respective pension credits in the Adviser’s Pension Fund by investing the proceeds in accordance with their (then) current contribution investment strategy prior to the transfer.

Members were given the opportunity to comment on this intention and since no objections were received, the action was effected.

Finally, Sanlam cares greatly for our retired advisers and hosts annual events across South Africa in appreciation of their years of service to us.

Mr Perry, like any other adviser or former adviser, is free to lodge a formal complaint with Sanlam about any matter with which he is not satisfied.
Sanlam handles all complaints with diligence and efficiency and embarks on comprehensive investigations, keeping advisers informed and providing feedback within prescribed timelines.

  • Theesan Moodley, General Manager of Distribution at Sanlam Personal Finance.
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