- Fund allocated significant death benefit share to employed, financially independent son, sidelining life partner and children.Â
- PFA finds fund failed to properly investigate financial dependency of complainant and her children.
- Initial allocation set aside; fund ordered to conduct thorough review and equitable redistribution.Â
The Pension Funds Adjudicator, Muvhango Lukhaimane, has set aside the allocation of a death benefit by the Private Security Sector Provident Fund.
Lukhaimane founds that the fund did not properly investigate the financial dependency of the complainant and her children on the deceased.
The complainant, the deceased’s life partner, objected to the fund’s decision to allocate a large portion of the benefit to the deceased’s employed adult son, who was not financially dependent on his father at the time of death.
Following the death of the member, a death benefit of R254 609.51 was payable. The fund allocated 23% to the deceased’s employed adult son, while only 10% was allocated to the unemployed life partner. The remaining amount was divided among the deceased’s minor children and stepchildren. The complainant argued that the deceased had intended her to be the sole beneficiary and stressed the financial hardship she and her children faced due to the loss of his support.
PFA emphasizes financial dependency as key criterion
In her ruling, Lukhaimane emphasised that legal or factual dependency alone does not guarantee a share of the death benefit; the critical factor is financial dependency on the deceased at the time of death. The adjudicator found that the deceased was living with the complainant and her children and was supporting them. However, since the complainant was still legally married to another man, it was unclear whether she and her children were financially dependent on the deceased or on her estranged husband.
The fund’s investigation was found to be inadequate, lacking clarity on the duration of cohabitation, the marital circumstances, and the financial dependency of the complainant and her children. Without a thorough inquiry into these factors, the fund could not make an equitable allocation.
Original death benefit allocation set aside
Due to the fund’s failure to investigate adequately, the adjudicator set aside the original allocation and directed the fund to reconsider the financial circumstances of the complainant and her children. The fund must now conduct a full and fair investigation and allocate the death benefit equitably based on financial dependency.
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