Lebogang Mogashoa, Pension Funds Adjudicator
“The fund’s response paints an image of passiveness, reactivity and lethargy.” With these words, Pension Funds Adjudicator Lebogang Mogashoa lambasted a pension fund for its failure to act with urgency in finalising the payment of death benefits to beneficiaries.
The Adjudicator stressed that section 37C of the Pension Funds Act requires boards to be proactive in tracing dependants, not to sit back and wait for them to come forward.
This complaint concerns the delay in the allocation and distribution of a death benefit by the Mineworkers Provident Fund following the death of its member on 27 July 2020. A death benefit in the amount of R458 358.59, became available for allocation to the deceased’s beneficiaries.
The complainant submitted that she was married to the deceased in a customary marriage, and she only managed to register the marriage after his death. She further submitted that the deceased left behind three children, and they had one child together.
The complainant said she was dissatisfied with the delay in the allocation and distribution of the death benefit. She submitted that the employer was not co-operative after following up on the status of the matter, and she had not received feedback.
The fund submitted that it was informed of the deceased’s death on 31 August 2020 and the Section 37C process commenced immediately. However, its system noted that the deceased indicator showed the deceased was still alive according to Department of Home Affairs (DHA) and it was advised to wait for the DHA status to be updated.
It requested all the necessary documentation. The complainant promised to submit the requested documents. The fund further submitted that there was crucial information yet to be secured from the potential dependants. The complainant had been informed of the required information.
In his determination, the Adjudicator said the fund learnt of the member’s death on 31 August 2020, yet only requested basic documents six months later, on 2 March 2021. Thereafter, its efforts were sporadic – June 2021, March 2022, September 2022, February 2023, and finally July 2025. Over five years, the board’s lethargic approach amounted to little more than a handful of phone calls, leaving dependants prejudiced and potentially denied timely access to benefits that were rightfully theirs.
The Adjudicator said the board of a fund has to be proactive in locating the dependants. The board was not entitled to simply wait for dependants to come forward and should actively investigate claims in terms of section 37C.
The Adjudicator found this delay unacceptable, ruling that the fund’s failure to fulfil its basic duties had caused undue hardship to the complainant and other beneficiaries. For this unreasonable delay, the fund was ordered to pay interest of 15.5% in addition to the death benefit – a stern reminder that trustees must act in the best interests of dependants, with diligence and urgency, not passivity and neglect.
Ed’s note: The Pension Fund’s Adjudicator was a panelist at the recent EBnet webinar discussing tricky death benefit cases. You can watch the recording here. And you can read the Q&A document answering the questions raised at the webinar here.
ENDS
