- RC Chauke resigned from Legacy All Suites Management Service on 29 April 2025 and died on 19 May of the same year.
- The fund paid R42884.15 to his estate as a withdrawal benefit.
- The Tribunal found Section 37C did not apply and dismissed the reconsideration application.
The Financial Services Tribunal has ruled that death in service and funeral benefits cannot be claimed for a former employee who resigned and withdrew his savings before passing away.
The case involved a claim by Nancy Segolela Moela, mother of the late RC Chauke’s minor child, against the Legacy All Group Umbrella Provident Fund.
Moela approached the tribunal after the Pension Funds Adjudicator rejected her complaint in April 2026. Chauke had worked for Legacy All Suites Management Service and joined the provident fund in February 2021.
Member resigned before he died
Chauke’s resignation took effect on 29 April 2025. He died less than a month later, on 19 May 2025. Before he died, he signed a withdrawal notification on 24 April 2025 and asked the fund to pay out his benefit. The withdrawal benefit was calculated at R42884.15 before tax. Though the payment was not made before his death, the fund paid the amount to his estate in October 2025.
The fund explained that Chauke was no longer a member when he died and that death in service and funeral benefits did not apply.
Claim for death and funeral benefits rejected
Moela argued that the child was entitled to a death gratuity and funeral benefit. She also questioned whether all pension contributions had been paid and if the fund had properly considered the nomination form.
The fund provided contribution records and rejected her claim. The Pension Funds Adjudicator found all contributions were paid and agreed the payout was correctly treated as a withdrawal benefit.
Section 37C does not apply after withdrawal
The tribunal agreed. It referred to the FSCA Interpretation Ruling 1 of 2020, which says if a member gives a written instruction to withdraw their benefit before death, that instruction, not the member’s death, makes the benefit payable.
Since Chauke had already chosen to withdraw, the tribunal found that Section 37C of the Pension Funds Act did not apply.
The tribunal said the provisions of section 37C do not apply. It also confirmed that death in service and funeral benefits only apply to members still in active service and contributing to the fund.
No unpaid contributions found
Moela raised a concern about a February 2021 payslip showing a pension deduction. Fund records showed Chauke only joined the fund in May 2021. The tribunal found that this did not affect the final calculation or the adjudicator’s decision.
The tribunal was satisfied that all employer contributions were paid and that the correct benefit was paid. The Tribunal also said that being unhappy with a fund decision is not enough without evidence of rule-breaking or legal non-compliance.
Mere dissatisfaction with the fund’s decision, without establishing non-compliance with the fund’s rules or applicable legislation, is insufficient to sustain a complaint, it said.
The application for reconsideration was dismissed.
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