Lebogang Mogashoa, Pension Funds Adjudicator
The Supreme Court of Appeal has affirmed the Pension Funds Adjudicator’s ruling that a retirement fund has 12 months from the date it becomes aware of a member’s death – not from the date of death itself – to trace dependants and pay out the death benefit.
This principle lay at the heart of the judgment delivered by the SCA, which dismissed with costs an appeal against the Mpumalanga Division of the High Court.
The South African Retirement Annuity Fund had sought to overturn the Adjudicator’s decision. On 23 June 2023, the Adjudicator found in favour of the complainant, Mrs Sophia Viljoen, criticising the fund for bypassing a proper investigation and instead allocating the benefit to the deceased’s estate “through the back door”.
The Adjudicator emphasised that the 12‑month period refers to tracing beneficiaries, not to a general payment deadline. Since tracing requires investigation, the obligation only arises once the fund learns of the member’s death. “It is clear that the fund will not know if there are dependants or not without conducting an investigation,” the Adjudicator said, declaring the fund’s decision unlawful.
The High Court upheld this reasoning, rejecting the fund’s argument that section 37C(1)(a) and (c) of the Pension Funds Act compels payment to the estate if no dependants are traced within 12 months of death.
Mr Marius Viljoen, who died intestate on 26 December 2019, left a retirement annuity benefit of R52 120.53 with no nominated beneficiary. His estate fell below the statutory threshold of R250 000, so no executor was appointed. His widow, Mrs Viljoen, reliant solely on a state old‑age grant, only learned of the benefit through a broker in March 2022 and lodged a claim. The fund repudiated her claim and resolved to pay the benefit into the estate, despite it not being reported to the Master of the High Court.
Aggrieved, Mrs Viljoen approached the Adjudicator, who set aside the fund’s decision. The High Court confirmed her order, and the fund appealed to the SCA.
The SCA framed the central question: does the 12‑month period run from the date of death or from the date the fund becomes aware of the death? Applying statutory interpretation, the court – concurring with the Adjudicator – held that the process of identifying and verifying dependants can only begin once the fund has knowledge of the death. To fulfil section 37C, the fund must identify dependants, determine equitable distribution, and decide on payment – obligations impossible without awareness of the death.
The SCA acknowledged that section 37C could have multiple interpretations. However, it found the fund’s interpretation illogical and contrary to the Act’s purpose and spirit.
The SCA held that the fund’s interpretation would hinder the fund from fulfilling its mandate to trace dependants and investigate their dependency. The fund could delay taking action until the 12 months lapsed and then claim that it was not aware of the death of the member.
The SCA found that the Adjudicator’s order was consistent with the purpose of the Act. The fund’s interpretation could prejudice the dependants of deceased members by allowing the fund to evade its responsibility.
The SCA further ruled that payment into the estate is permissible only once all statutory avenues to trace dependants and nominees have been exhausted. The appeal was dismissed with costs.
Pension Funds Adjudicator, Lebogang Mogashoa, said: “We note the judgement handed down by the SCA on 28 May 2026 in the court challenge brought against our earlier ruling from 2023.
“The judgement reaffirms our interpretation that the 12-month period in terms of section 37C commences from the date the fund is notified of the death of the member, and not from the actual date of the death of the member. We believe the judgement provides clarity on this important point of law.”
ENDS
