PENSION Funds Adjudicator Muvhango Lukhaimane. Supplied
If you die while in the service of an employer and you belong to a retirement fund, a fairly large sum of money is likely to become available for distribution. 

This would typically consist of your accumulated retirement savings, plus a group cover payout on your life.

To whom the money goes must be decided by the retirement fund, and for this the fund looks at two things:

* The people you have nominated on your beneficiary form; and

* People not nominated by you but who are financially dependent on you, such as children, a spouse or live-in partner, or parents.

If no one fits the bill in either category (for example, if you have not nominated any beneficiaries and don’t have dependants), the fund has no option but to allocate the benefit to your estate, in which case it is distributed according to your wishes in your will, or, if you have not drawn up a will, according to the laws of intestate succession.

Deciding on the allocation of benefits is a complex task for a retirement fund, and funds often have to deal with complaints from relatives or dependants of the deceased who “pop out of the woodwork” to try to claim a share of the money.

In a recent case before the Pension Funds Adjudicator, Muvhango Lukhaimane, a man tried to prevent a retirement fund from allocating his estranged wife’s death benefit to her estate, but scuppered his case by showing that he was not financially dependent on her.

Mrs N died in June 2016, according to the determination. She was a member of the Coca-Cola Shanduka Beverages Provident Fund, and a death benefit of almost R4million became available for distribution.

Mrs N had not completed the beneficiary nomination form and had no dependants known to the fund. Therefore, the fund allocated the money to her estate - and in her will, Mrs N had nominated her parents as her sole beneficiaries.

Mr KN, Mrs N’s husband, lodged a complaint with the adjudicator’s office, submitting that he was her legal spouse and trying to reverse the allocation of the death benefit to Mrs N’s estate on the grounds that she had died of unnatural causes and the police investigation into her death had not been finalised.

However, he had also shown, when he initially approached the fund, that he lived apart from his wife and was financially independent.

In response to the complaint, the Coca-Cola Shanduka Provident Fund submitted that Mr and Mrs N were married out of community of property and, before her death, Mrs N had initiated divorce proceedings against her husband. They had signed a deed of settlement wherein they agreed that neither party had any claim to the assets of the other. The couple had been living apart for seven months.

The provident fund said it had spoken to the police officer investigating Mrs N’s death, who confirmed that nobody was implicated in her death. It said the investigation was, to all intents and purposes, finalised by the time the board made its decision in October 2016 to pay the death benefit into the dead woman’s estate.

In her determination, Lukhaimane said Mr and Mrs N had been estranged since November 2015 and were not living together at the time of her death.

Further, prior to Mrs N’s death, she had initiated divorce proceedings against Mr N, and they had signed a deed of settlement wherein they agreed that neither party had any claim to the assets of the other.

“The deceased had a will in which she appointed her parents as her sole beneficiaries.

“(Mr N) confirmed to the provident fund that he was not financially dependent on the deceased. Therefore (he) excluded himself from being a legal or factual dependant of the deceased.

“It follows that his exclusion from the allocation of the death benefit was equitable in the circumstances,” Lukhaimane said.

She found that the payment of the death benefit into the estate was justifiable. Thus, the complaint was dismissed.

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