A woman who may have qualified for a pension did not receive anything because her late husband failed to inform the fund of her existence.
The woman complained to Muvhango Lukhaimane, the Pension Funds Adjudicator, because the trustees of the fund awarded the pension to her late husband’s former wife and child.
The Pension Funds Act states that where a fund makes provision for a spouse’s or child’s pension, it is the fund’s rules that determine the entitlement.
This is not the case when a lump-sum is payable on a member’s death. In this instance, the distribution of the benefit is regulated by the Act, which has supremacy over any fund rule, and the trustees are obliged to take all reasonable steps to track down the member’s dependants.
Some funds, particularly defined-benefit funds, make provision for a spouse’s or child’s pension on a member’s death. The fund’s rules will regulate eligibility, the amount of the pension and the circumstances under which it will cease.
If you belong to a fund that provides a spouse’s pension, you should check the fund’s rules carefully for requirements that must be met for you or your dependants to qualify for the pension. Some funds, for example, will not pay a pension to a member’s spouse if they married after retirement.
In the case that came before the adjudicator, MB worked at Sasol and belonged to the Sasol Pension Fund, a defined-benefit fund. He became a pensioner in June 2007 because of a medical disability. In December 2007, he divorced YB, with whom he had a daughter.
The complainant, LM, married MB in 2009. MB died in August 2014.
The fund trustees decided to allocate MB’s death benefit to YB and their daughter, because they qualified for it in terms of the fund’s rules.
LM was not happy with the decision and complained to the adjudicator.
In her determination, Lukhaimane says the Pension Funds Act clearly states that a benefit payable as a pension to a member’s spouse or child should be paid in terms of the rules of the fund. The rules of the Sasol Pension Fund state that, on the death of a member who is receiving a disability pension, the pension benefit becomes payable to a “qualifying spouse” and a “qualifying child”, if any.
The rules define a “qualifying spouse” as someone who, at the date of the member’s death or the pensioner’s retirement, was either the legal spouse of the member or pensioner or was the member or pensioner’s partner in a customary union, or in a union recognised as a marriage by any religion, or was in a relationship that, to the trustees’ satisfaction, was one in which the cohabiting partners shared a reciprocal duty of support, as if they were married.
This provision in the rules has a condition: the member or pensioner must notify the fund of the existence of a qualifying spouse before the date on which the benefit becomes due from the fund.
Lukhaimane says MB failed to inform the fund of his marriage to the complainant. Therefore, his former spouse, who was his legal spouse at the date of his retirement, was the “qualifying spouse” in terms of the fund’s rules.