Sister and her children lose bid to block life partner’s share of R8.3 million pension benefit

• A R8.3m pension death benefit was shared between a deceased member’s sister, permanent life partner, niece and nephew.
• The adjudicator ruled that a beneficiary nomination does not override trustees’ duty to distribute benefits fairly under Section 37C of the Pension Funds Act.
• The determination confirms that permanent life partners may qualify as legal dependants even where they did not continuously live together.

A sister and her two children have failed in their bid to prevent a deceased man’s permanent life partner from receiving a share of his R8.3 million pension death benefit after Pension Funds Adjudicator Lebogang Mogashoa upheld the trustees’ allocation under Section 37C of the Pension Funds Act.

The ruling arose from a dispute over a death benefit of R8.3 million  following the death of a member of the Corporate Selection Umbrella Retirement Fund in May 2024. 

The Office of the Pension Funds Adjudicator dismissed the complaint and upheld the trustees’ allocation of the benefit, finding they had properly exercised their discretion under the law.

Family challenged recognition of life partner

The trustees allocated 45 percent of the benefit to the deceased’s sister, 45 percent to the deceased’s permanent life partner and 5 percent each to the sister’s two children, who are the deceased’s niece and nephew.

The sister and her children challenged the decision, arguing that the deceased had nominated the sister as the sole beneficiary in 2005 and that the life partner did not qualify as a permanent life partner.

They maintained that the deceased and his life partner never shared a household, had no joint financial arrangements and were not in a committed romantic relationship. They also argued that the deceased never referred to her as his spouse or partner, did not include her in his will and never nominated her as a beneficiary.

According to the complainants, WhatsApp communications between the pair showed friendship rather than an intimate relationship, while witness statements supporting the life partner’s claim came largely from people close to her.

Fund relied on evidence of a long-term relationship

The retirement fund disputed those claims, saying the deceased and his life partner had been in a relationship for approximately 20 years.

According to the fund, they had alternated between living at her Rivonia home and his Sandton residence before eventually living together in Sandton from July 2023 until his death.

The fund presented evidence that the deceased financially supported his life partner by contributing about R15 000 a month towards groceries, household expenses, domestic services, veterinary costs, Netflix subscriptions, fibre internet and holidays. It also said he assumed a paternal role towards her son and even covered expenses for her mother.

The trustees further relied on evidence that the deceased’s employer regarded her as his life partner and that the Rabbi who conducted his funeral referred to her in the same way.

Sister also qualified as a dependant

The investigation established that the deceased also financially supported his sister by contributing about R12 000 a month towards groceries and medication. He also assisted her children by paying for vehicles, holidays and other expenses.

However, the trustees noted that the sister was also the executrix and sole heir of the deceased’s estate, valued at about R5.8 million, and had benefited from the sale of the family home and insurance policies.

The fund therefore concluded that while the sister qualified as a factual dependant, the life partner qualified as a legal dependant because the statutory definition of a spouse includes permanent life partners.

Trustees’ process challenged

The complainants also argued that the trustees failed to follow a fair process. They contended that material relied upon during the investigation was never disclosed to them, preventing them from responding fully. 

They also criticised the trustees for allegedly preferring affidavits from the life partner’s relatives while discounting evidence from independent witnesses.

They further questioned why the trustees reduced the life partner’s provisional allocation from 65 percent to 45 percent and introduced allocations of 5 percent each for the niece and nephew without adequately explaining the reasons for the revised distribution.

The life partner denied the allegations and maintained that she and the deceased had shared a committed relationship spanning about 25 years. 

She said she had changed employment at his request, that they had planned their retirement together and that their relationship was based on mutual commitment rather than financial gain.

Section 37C places fairness above nominations

The adjudicator examined whether the trustees had complied with section 37C of the Pension Funds Act and whether the distribution was equitable.

The determination distinguished between legal and factual dependants. The life partner was recognised as a legal dependant because she qualified as a permanent life partner. 

The deceased’s sister was recognised as a factual dependant and the nominated beneficiary, while the niece and nephew were regarded as ad hoc factual dependants who had received occasional financial support.

The Adjudicator reiterated that a beneficiary nomination is only one factor trustees may consider. “The deceased’s 2005 nomination of his sister, while a relevant factor, was not binding on the fund under Section 37C. Trustees must distribute benefits equitably among dependants, regardless of nominations or wills,” the determination states.

Permanent life partnerships assessed on the full relationship

A central issue was whether the life partner qualified as a permanent life partner despite evidence that the couple maintained separate residences for part of their relationship.

Rejecting the complainants’ argument, the adjudicator said continuous cohabitation is not required to establish a permanent life partnership. “The complainants contend that the life partner cannot be recognised, relying principally on the fact that the parties maintained separate residences. This argument is misplaced. Cohabitation, while relevant, is not decisive.”

The adjudicator added, “Our law recognises that many marriages, unions, and permanent life partnerships in South Africa do not involve continuous co-residence, often due to economic, employment, or personal circumstances. Such arrangements do not, without more, negate the existence of a permanent life partnership.”

He said the law rejects rigid or formalistic requirements. Continuous cohabitation is not essential, nor is the existence of joint financial accounts. 

Financial dependency may be established through indirect forms of support, while every case must be decided on its own facts and on the balance of probabilities. The determination explains that the enquiry considers the totality of the relationship. 

Relevant factors include the duration of the relationship, whether the parties shared a common home, the extent of their shared expenses, financial support, how family and friends perceived the relationship, whether they publicly associated as an intimate couple, whether they made provision for one another in pension or related benefits, and whether there was evidence they intended to share their lives. No single factor is decisive.

Trustees acted within the law

The adjudicator found the evidence before the trustees was conflicting. The complainants relied on the absence of joint bank accounts, separate residences and witness statements denying a romantic relationship.

The trustees, however, had before them evidence of a relationship spanning two decades, periods of cohabitation, financial support, shared holidays and affidavits from colleagues, domestic workers and family members describing a committed romantic partnership.

The adjudicator concluded that the trustees were required to assess the probabilities between these competing versions and that their conclusion was supported by multiple corroborating sources of evidence.

He also found that although the complainants had raised concerns about disclosure and the reasons for the allocation, the trustees had conducted the necessary investigations, considered all submissions before them and exercised their discretion in accordance with Section 37C of the Pension Funds Act.

The complaint was dismissed, leaving the allocation of the R8.3 million death benefit unchanged.

Conviction.co.za

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