PENSION Fund Adjudicator Muvhango Lukhaimane has ruled that the Sanlam Umbrella Pension Fund set aside and rework a death benefit allocation that it had paid out to a deceased’s spouse and two minor children, while four complainants, who were the deceased's children, were allocated only 1% each.
The deceased’s spouse and two children were allocated 96%. The deceased had six children.
The decision came after the four complainants lodged a complaint with the Office of the Pension Funds Adjudicator, claiming they were allocated only one percent each from the death benefit of R1 869 076.45 although they were financially dependent on the deceased.
Lukhaimane said the complainant, “L”, submitted that he was unemployed and did not live with the deceased. He was a student at Boston College and had student debt.
“He did not provide any amount with which the deceased supported him, nor did he provide any proof that the deceased was supporting him financially. He further submitted that he was in the process of claiming maintenance against the deceased,” she said.
According to Lukhaimane, complainant “N” was unemployed and was not living with the deceased. She initially mentioned that she was a University of Free State student, but subsequently indicated that she was registered with Unisa.
“She stated on her claim form that she was partially dependent on the deceased and was receiving R710 per month from the deceased through a maintenance order. However, she subsequently submitted that she was fully dependent on the deceased and that the amount of R710 that she received from the deceased was not sufficient to meet her needs," she said.
Lukhaimane said the complainant “M” was unemployed and was not living with the deceased. She initially submitted that she was employed part-time. However, she subsequently submitted that she was not employed at all and was receiving R350 from the Covid-19 social relief grant. She was receiving R800 a month from the deceased through a maintenance order.
Lukhaimane said she submitted that she also depended on her grandmother's grant and living in a household of seven people. Therefore, her financial dependency on the deceased was over and above the maintenance order.
“Complainant “S” was not living with the deceased and initially submitted that he was partially dependent on the deceased. He was employed as a casual employee and earned R5 000 per month.
“He submitted that he was unable to pay for his studies. He also subsequently submitted that he was no longer employed and was dependent on his mother for financial assistance. He submitted his bank statement as proof of his financial position,” she said.
Lukhaimane said she arranged a hearing of all parties to expedite the matter as the fund had insufficient information to arrive at the decision it did; the spouse had not been forthcoming with information to substantiate her financial position; and the major children were going through financial hardship owing to the prolonged finalisation of the matter.
"The fund had failed to establish the spouse’s financial position, her qualifications, and her prospects of earning an income, considering her age. The fund had also ignored that the major children required funds to sustain themselves or to place themselves in a position where they would be able to earn a living following the death of their father," she said.
Lukhaimane said during the hearing that the spouse submitted that the group life benefit was paid to her. Following the hearing she submitted information regarding how she used the group life benefit. She provided the deceased’s bank statement but failed to provide the fixed deposit bank account statements and her current account statements. She utilised the group life benefit on aspects that cannot be classified as necessities and, therefore, does not appear to be short of money.
“Should the fund be inclined to consider her for a portion of the death benefit, a detailed consideration must be provided to the rest of the beneficiaries as to the reasons. The complainants’ submissions indicate that they are all unemployed, experiencing financial hardship, and were left destitute by the death of the deceased," Lukhaimane said.
In her determination, Lukhaimane said Section 37C of the act served a social purpose and intended to protect people who were dependent on the deceased during his lifetime and to ensure that they continued to be provided for.
“The deceased was legally married to the spouse at the time of his death. She was living with the deceased and was fully financially dependent on him. Therefore, she qualified as a legal dependant. The deceased had six children, and they all qualified as legal dependants,” she said.
“It should be noted that dependency is a critical point to consider in the allocation of the death benefit. The fund received further submissions after the board initially decided on the allocation of the death benefit and further submissions following the hearing.
“In light of the above, the board's decision is hereby set aside. The fund should be allowed to re-exercise its discretion by considering the new evidence placed before it to decide on an equitable allocation of the death benefit in terms of Section 37C of the act,” Lukhaimane said.
* Maleke is the editor of Personal Finance.
PERSONAL FINANCE