WeeklySA_AdminBenefits:Those who were maintained by the deceased also benefit
By Thuli Zungu
Xoliswa Mtulu-Dotwana of BLC Attorneys, says Section 37C of the Pension Fund Act 24 of 1956 has come under much scrutiny in recent years because of the sometimes unexpected results of its implementation, particularly pertaining to the Pension Fund Trustee’s discretion in the execution of their duties in distributing deceased members’ death benefits.
She said Section 37C regulates the distribution of death benefits to ensure that the deceased member’s financial dependants and or the nominees are not left destitute following the death. “Therein lies the rub, the ‘’and/or’’ as the benefit is distributed to dependants whether the deceased member had a legal obligation to maintain them or not,” Mtulu-Dotwana said. This means that any person whom the deceased maintained while he lived will be considered as a beneficiary, whether they were nominated or not.
The Board of Trustees can exercise discretion in the distribution of the benefits in what they deem fair and equitable, meaning that they are not controlled by the member’s will or beneficiary nominations.
“Instead, the Board of Trustees conduct investigations to determine and trace all the dependents of the deceased,” Mtulu-Dotwana said.
The Pension Fund Trustees identify and trace dependants and those who have been nominated by the deceased member. They make benefit allocations on a fair and equitable basis and determine an appropriate mode of payment of the death benefit.
The trustees consider the following when di tributing funds:
• the extent of dependency;
• the ages of the beneficiaries;
• the relationship with the deceased;
• the amount available for distribution;
• the financial status of each beneficiary, including the future earning capacity of each beneficiary;
• the wishes of the deceased.
• Death benefits do not form part of the member’s deceased estate, instead the benefits will be placed under the control of the relevant fund.
• Death benefits are not subject to the law of marriages, which means the benefit does not form part of the joint estate where the parties are married in community of property.
• The law of intestate succession does not apply where the member died without a valid will.
• The deceased member’s nominated beneficiaries are a ‘wish list’ that could not be legally complied to.
• A member should always have this in mind, not only when completing a Nominated Beneficiaries Form, but also when providing for anyone, including those that he/she has no legal obligation to provide for, more so when he/she wishes for the latter not to benefit from his/her death benefits.
The dependant means a person whom the member is liable for maintenance- the children, wife, a posthumous child, an adopted child, an illegitimate child and a person whom the member would have maintained, had the member not died. (This includes a lover (side dish), uncle, grand-parents, and relatives who could prove they were maintained by the deceased.
