PFA Ruling concerning payment of spouse's pensions

26 July 2007 Pension Fund Adjudicator

The Pension Funds Adjudicator today issued an important ruling concerning the payment of spouses pensions in the matter of Mnguni v Abbott Laboratories South Africa (Pty) Ltd Pension Fun, Old Mutual Life Assurance Company (SA) & Glenrand MIB.
In this matter, the late Mr P Mnguni was a member of the fund and commenced receiving a pension upon his retirement in May 1993. On 24 June 2004 he passed away.

The fund decided that there was no death benefit payable upon the death of the pensioner. The complainant, the widow of the deceased was unhappy with the decision of the fund and lodged a complaint with the Adjudicators Office.

The Adjudicator examined the rules of the fund and concluded that special rule 3.2 provides in clear and unambiguous terms that a spouse's pension shall be payable to the pensioners surviving spouse subject to the requirement that the surviving spouse was married to the member prior to his date of retirement. The Adjudicator further held that the complainant and the deceased were married on 31 December 1985 and the marriage was in existence at the time of the deceased's retirement in 1993 and his death in 2004. Therefore the complainant qualifies for a spouse's pension. The pension in terms of the rules consisted of 50% of the deceaseds pension at the date of his death.  The fund was ordered to commence paying the spouse's pension as well as to pay the arrear monthly pensions from 1 July 2004 to the date of the ruling in a single lump sum.

The above ruling again serves as an important reminder to trustees and administrators of funds that the rules of the fund determine the type of benefit payable and the amount of the said benefit.

The full ruling can be viewed here (PDF file 50KB)

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