Pension funds adjudicator upholds R834,000 award to deceased woman’s partner

According to IOL, the Pension Funds Adjudicator has dismissed a complaint and confirmed that a deceased pension fund member’s life partner will receive an R834,000 lump-sum death benefit.

What the adjudicator decided

According to IOL, Deputy Pension Funds Adjudicator Naheem Essop found that the board of the Lifestyle Retirement Annuity Fund acted reasonably and within its legal mandate when it awarded 100% of the death benefit to the deceased’s partner, identified as GB.

The adjudicator’s determination upheld the fund’s exercise of discretion under Section 37C of the Pension Funds Act, which requires trustees to identify, trace and equitably allocate benefits to a deceased member’s legal and factual dependants.

Background to the dispute

According to IOL, the dispute followed the 2020 death of a fund member identified as CD. CD had joined the Lifestyle Retirement Annuity Fund in March 2007 and at the time of her death her sole nominated beneficiary was her estate, bringing the distribution within Section 37C.

According to IOL, CD’s brother, named in reports as JD, lodged a complaint with the adjudicator in September 2023 after contesting the fund’s decision to award the full benefit to GB. JD argued that CD and GB were never legally married and said the family had witnessed a religious “blessing” rather than a civil marriage. He also contended GB was not financially dependent on CD and said GB had already received payouts from her other policies.

Fund investigation and findings

According to IOL, the Lifestyle Retirement Annuity Fund said it began a prolonged investigation after receiving notification of CD’s death in late December 2020. The fund reported it spent several years attempting to establish living arrangements, verify whether CD had children and trace potential dependants, and that its claims department faced hurdles gathering documentation.

According to IOL, in December 2021 the complainant told the fund he was not financially dependent on his sister and stated she had been living with GB. When the fund traced GB, he told the fund he had not been financially dependent on CD. The board nonetheless concluded GB qualified as a legal dependant under the law and allocated the entire benefit to him.

Legal reasoning

According to IOL, in his analysis Essop cited legal precedent that cohabiting partners can qualify as factual dependants if they “share a common household and maintain a permanent relationship of mutual dependency,” regardless of a marriage certificate. Essop noted,

“On the complainant’s own version, the deceased and GB lived together, and their relationship and living arrangements were blessed by the church,”

and observed that “The Act includes permanent life partners as spouses.”

Based on that reasoning, Essop concluded the fund’s board had properly exercised its discretion and dismissed the brother’s complaint.

Reporting note

According to IOL, the awarded amount is R834,000 and the matter arose from the Lifestyle Retirement Annuity Fund’s administration of the deceased member’s benefit.