Africa-Press – South-Africa. A death benefit nomination form is a guideline for a provident fund when distributing benefits as the fund has the discretion to allocate the benefit as it deems equitable, even if it deviates from the nomination, says Pension Funds Adjudicator Muvhango Lukhaimane.
She said the fund is required to investigate and consider many factors, including the deceased’s dependents and their financial needs, before making a final decision.
Lukhaimane was commenting in a matter in which a stepdaughter lodged a complaint with the Office of the Pension Funds Adjudicator on behalf of herself and her mother, who was the deceased’s estranged wife.
The deceased was employed by Putco and was a member of the Larimar Group Provident Fund from July 2006 until he passed away on May 23 2023.
He was survived by his customary wife, two adult sons, adult nephew, estranged civil wife and adult stepdaughter.
When he died, a death benefit of R1,399,122 became available for allocation to his beneficiaries, of which the board allocated 70% to his customary wife, and 10% to each of the two sons and a nephew.
The stepdaughter said he was in a civil marriage with her mother and while they had separated, they never divorced. She was unhappy that she and her mother had been excluded as beneficiaries though her mother had signed documents for the deceased’s funeral benefit to be released.
The fund confirmed he had completed a beneficiary nomination form where he nominated the stepdaughter, her mother and his two sons as beneficiaries. He did not provide an allocation percentage in his form. However, the fund conducted an investigation in terms of the Pension Funds Act.
It established the customary wife had lived with the policyholder until his death, was unemployed and financially dependent on him.
The two sons were unemployed, but not living with the deceased at the time of his death and not financially dependent on him. The nephew did live with the deceased and though employed, he was financially dependent on the deceased.
The fund submitted that while it considered the beneficiary nomination form, and while the stepdaughter was under the impression her mother was entitled to a death benefit because the employer asked her to sign documents to release the deceased’s funeral benefits, the mother was no longer in a relationship with him and was not dependent on him.
The fund submitted that though the complainant and her mother were nominated as beneficiaries in 2006, the nomination form was not binding on the board.
In her determination, Lukhaimane said it is the board’s responsibility when dealing with the payment of death benefits to conduct a thorough investigation to determine the beneficiaries, to thereafter decide on an equitable distribution and finally to decide on the most appropriate mode of payment of the benefit payable.
While the stepdaughter was dissatisfied the fund did not allocate the deceased’s death benefit in accordance with his beneficiary nomination form, it should be noted the board was not bound by a nomination form, she said.
The complainant and her mother were not living with the deceased and were not financially dependent on him for more than 15 years. The deceased’s customary wife, who was unemployed and shared a household with him, and his two sons and nephew, were all dependent on the deceased.
Lukhaimane said the fund did not abuse its discretion in the allocation of the deceased’s death benefit which was properly allocated to the dependents. The complaint was dismissed.
For More News And Analysis About South-Africa Follow Africa-Press
