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Pension fund members must complete their own beneficiary forms

28 March 2019 Pension Funds Adjudicator
Muvhango Lukhaimane, Pension Funds Adjudicator

Muvhango Lukhaimane, Pension Funds Adjudicator

Members of pension funds who have legal dependants must complete a beneficiary nomination form themselves, said the Pension Funds Adjudicator.

Muvhango Lukhaimane said members cannot entrust the welfare of their legal dependants to the whims of their siblings and other family members who are often “less than honorable where money is concerned”.

Ms Lukhaimane’s comments came in the wake of a determination involving a complaint by LR Roems against Metal Industries Provident Fund (first respondent) and Metal Industries Benefit Funds Administrators (second respondent) concerning the delay in the payment of a death benefit following the death of her brother C Roems.

She found that the complainant had been dishonourable and had deliberately failed to disclose important information.

The deceased was survived by the complainant and a son, Christopher Pietersen.

Following the deceased’s death, a total death benefit of R892 829.16 became payable to the deceased’ beneficiaries. The board of the first respondent resolved to allocate 40% (R357 131.66) of the death benefit to the complainant based on her nomination as a nominee and retained the remaining 60% (R536 697.49) for Christopher.

The complainant stated that she was nominated by the deceased as his sole beneficiary of his estate and provident fund benefits.

The second respondent said the first respondent received death benefit application documentation from the complainant on 8 December 2016. The complainant provided two beneficiary nomination forms with her application.

The first nomination form was completed by the deceased on 31 October 2007 in terms of which he nominated the complainant and his other sister, Regina Roems, who predeceased the deceased on 21 November 2013. The second nomination form was completed on 1 May 2016 with the complainant as the sole nominee.

On 12 January 2017, the first respondent contacted the complainant to obtain information regarding the deceased’s dependants and the child mentioned on her affidavit. However, the complainant stated that she had no idea of the whereabouts of the child, did not know his name and had never met him.

The second respondent indicated that the complainant confirmed that she was not dependent on the deceased and was employed. On 17 January 2017, the first respondent requested the employer to provide any information that may assist in locating the child. The employer stated that it had no further information regarding the deceased.
The second respondent submitted that further investigations revealed that a warrant of execution was issued on 10 March 1998 for arrear maintenance against the deceased. A garnishee order was also issued against him on 27 March 1998 for payment of maintenance in a matter between one Ms Sarah Pietersen and the deceased.

The deceased’s nephew Gerald Roems subsequently confirmed that the deceased had a son named Christopher and the complainant was aware of him. He confirmed that Christopher would visit the deceased and after the deceased’s death, he enquired about the deceased’s benefits and belongings, which the complainant was aware of.

The nephew indicated that the deceased occasionally gave Christopher money to assist him as he was unemployed and resided with a family that was known to the deceased’s family.

A visit to the home where Christopher resided revealed that he lived in an environment that was not stable. Christopher’s mother, Sarah, passed away approximately 10 years ago, which was subsequently confirmed to be on 1 April 2004. On 4 April 2018, Christopher was assisted with an application for an identity document as he had only a birth certificate.

The second respondent indicated that it would assist Christopher with his application process and will pay his share of the death benefit upon receipt of his documentation.

In her determination, Ms Lukhaimane said it was the board’s responsibility when dealing with the payment of death benefits to conduct a thorough investigation to determine the beneficiaries, to thereafter decide on an equitable distribution and finally to decide on the most appropriate mode of payment of the benefit payable.

The facts indicated that the complainant was dissatisfied with the allocation of a portion of the death benefit to Christopher as she stated that she was the sole beneficiary of the deceased in terms of his last nomination form.

However, the complainant should note that the board was not bound by a nomination form and it only served as a guide in the distribution of a death benefit.

Thus, the board was not bound to allocate the entire amount of the death benefit to the complainant based on her nomination as the sole beneficiary. The board had to take into account the existence of other beneficiaries and the extent of their dependency on the deceased in order to make an equitable allocation of the death benefit.

The deceased was survived by a son, Christopher, who qualified to be a legal dependant of the deceased.

“It follows that the board exercised its discretion equitably in allocating 60% of the death benefit to him.

“The complainant has been extremely dishonest in terms of providing information to the first respondent regarding the existence of Christopher as the deceased’s son.

“There is an uncontested submission that the complainant denied ever knowing Christopher, which is contrary to the information gathered during the investigation by the board.

“It is dishonorable for the complainant to hide information from the board for her own benefit.

“Members must know that where they have legal dependants, they must complete a beneficiary nomination form as they cannot entrust the welfare of their legal dependants to the whims of their siblings and other family members who are often less than honorable where money is concerned.”

Ms Lukhaimane ordered the first respondent to pay Christopher Pietersen the remaining 60% of the death benefit that was allocated to him.

 

 

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