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PFA dismisses complaint based on greed

05 June 2017 Muvhango Lukhaimane, PFA
Muvhango Lukhaimane, Pension Funds Adjudicator.

Muvhango Lukhaimane, Pension Funds Adjudicator.

A complainant who wanted more than what she had been allocated in a death benefit has been described by Pension Funds Adjudicator Muvhango Lukhaimane as “greedy”.

C Diener of Musina brought a complaint against PSQ Wealth Retirement Annuity Fund (first respondent) and PSQ Life Limited (second respondent) following the distribution of a death benefit by the first respondent following the death of its member, A Naude.

The deceased was a member of the first respondent during his lifetime. The complainant was the life partner of the deceased.

The deceased died on 6 April 2015 and was survived by the following: C Diener (life partner; D Diener, I Naude, J Naude and T Roos (all biological children); and SH Naude (mother).

Following the death of the deceased, a death benefit in the amount of R1 653 640.00 became available for distribution. The first respondent allocated the death benefit to the deceased’s beneficiaries as follows: C Diener - 80%; D Diener - 5%; I Naude - 0%; J Naude - 5%; T Roos - 0%; and SH Naude -10%.

The complainant was dissatisfied with the allocation of the death benefit to D Diener, J Naude and SH Naude. She stated that SH Naude was awarded an amount of R625 632.00 from the Discovery Retirement Annuity Fund. She mentioned that 5% of the total amount of R3 083 838.34 from the Discovery Retirement Annuity Fund, being R154 191.91, was allocated to D Diener and J Naude.

She submitted that the first respondent must take into consideration that she was 57 years old and was nearing retirement. She said SH Naude had six children who still supported her in various ways and the deceased did not provide the majority of the support to her. She stated that D Diener and J Naude were still young and employed.

The complainant requested the Tribunal to allocate the entire death benefit to her.

The second respondent submitted that the first respondent was entitled to take note of the decisions made by another retirement fund as this directly impacted on the financial circumstances of the dependants.

The second respondent submitted that in allocating 80% (R1 322 912.00) of the death benefit to the complainant, the first respondent took note of her age and life partnership of many years with the deceased.

The first respondent also took into account the allocation of 69% of R3 083 838.34 from the Discovery Retirement Annuity Fund to the complainant. It also noted that the complainant was employed and had received various other benefits from the estate of the deceased.

The second respondent submitted that the first respondent initially awarded 21% of the death benefit to SH Naude, however because of the substantially increased allocation from the Discovery Retirement Annuity Fund, the allocation was decreased to 10%.

It submitted that D Diener was taken care of by the deceased in that he was not paying rent in a property owned by the deceased and received various other benefits. He was factually dependent on the deceased. J Naude was also partially factually dependent on the deceased as the accommodation he and his family lived in was subsidised by the deceased.

The second respondent submitted that the first respondent disregarded the deceased’s wishes of nominating his estate as a beneficiary to his death benefit. It mentioned that the deceased’s nomination, read together with his will, conflicted with the complainant’s allegation that the deceased wanted her to have the annuities as they discussed before he passed away.

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.

In making their decision, trustees need to consider all relevant information and ignore irrelevant facts. Further, the trustees must not rigidly adhere to a policy or fetter their discretion in any other way.

Ms Lukhaimane said the law recognised three categories of dependants based on the deceased member’s liability to maintain such a person, namely, legal dependants, non-legal dependants and future dependants.

In principle, a member is legally liable for the maintenance of a spouse and children as they rely on the member for the necessities of life. In the case of non-legal dependants, where there is no duty of support, a person might still be a dependant if the deceased in some way contributed to the maintenance of that person. The person alleging to be a factual dependant will have to prove that he was dependent on the deceased, despite the deceased not having a legal duty to maintain at the time of the member’s death.

Ms Lukhaimane said D Diener and J Naude qualified as dependants in terms of section 1(b)(iii) of the Act which was introduced to include inter alia major children of the deceased who at the date of death were not dependent on the deceased for maintenance.

Even though the complainant did not mention her allocation of the death benefit from the Discovery Retirement Annuity Fund, the submissions before the Tribunal indicated that she was allocated 69% of the R3 083 838.34 from the Discovery Retirement Annuity Fund and she received other benefits from the deceased’s estate.

“Thus, it is clear that in respect of the current and future earning capacity, the complainant is in a far better position than D Diener, J Naude and SH Naude.

“It is clear the complainant was not left destitute as a result of the death of the deceased.

“This Tribunal strongly condemns the conduct of the complainant as it demonstrates the greed of some dependants,” said Ms Lukhaimane, adding she was satisfied that the death benefit was allocated properly to the dependants. She dismissed the complaint.

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