- The pension fund initially refused to pay the death benefit, claiming that missed contributions during the illness meant no payout, which led to a dispute over the death benefit.
- The Pension Funds Adjudicator stepped in and said the money should go to the late employee’s family.
- The fund has now agreed to pay R798 066.32 to the beneficiaries, once all paperwork is finished.
After more than a decade of confusion and unanswered questions, the son of a deceased Steval Engineering employee has finally received confirmation that the Metal Industries Provident Fund will pay out the full death benefit of R798 066.32.
The breakthrough came after the Office of the Pension Funds Adjudicator stepped in to resolve the pension fund death benefit dispute and challenged the fund’s refusal to pay.
The member passed away on 18 September 2013. A death benefit of R18 691.26 was paid to the deceased’s estate late account on 26 August 2014. The quantum of the death benefit, and the decision to pay the estate rather than distribute it under Section 37C, became the subject of the complaint.
The complainant requested proof of payment and was told the benefit had already been paid. But when he contacted the bank, the account number could not be verified. The fund did not initially provide further documentation.
Fund’s defence and legal interpretation
The fund argued that no contributions were made in the last two months of the member’s life because he was off work due to illness and didn’t receive a salary. According to the fund, this meant the insured death benefit couldn’t be paid.
“The deceased had no contributions to cover the costs of the death benefit; thus, the deceased's beneficiaries were not entitled to any insured death benefit,” the fund stated.
It cited the Consolidated Provident Fund Collective Agreement for Metal Industries: “No deductions shall be made, or contributions paid in respect of periods of absence on unpaid leave, and absences owing to sickness, injury on duty, and military service where no payment is due to the employee by the employer in terms of an agreement or under any law.”
The fund added: “The Main Agreement confirms that contributions shall only be paid based on the actual hours worked.”
Adjudicator pushes back on technicalities
Deputy Adjudicator Naheem Essop wasn’t convinced. After reviewing the submissions, he ordered the fund to allocate and pay the benefit under Section 37C of the Pension Funds Act, which requires that death benefits be distributed fairly among dependants.
Following this intervention, the fund reversed its position. In a statement dated 21 August 2025, it confirmed: “There was a benefit due to the beneficiaries, and it will be paid in terms of Section 37C of the Act.” It added: “The board re-evaluated the documents and information and decided to award a full death benefit of R798 066.32 to the beneficiaries.”
The fund requested documentation from the complainant and other potential beneficiaries to assess dependency and was ordered to finalise its investigation and pay the benefit within two weeks.
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