Naheem Essop, Deputy Pension Funds Adjudicator, Office of the Pension Funds Adjudicator
A pension fund paid R18 691.26 to a deceased member’s estate. Following intervention by the Office of the Pension Funds Adjudicator, the fund will now pay R798 066.32 to the beneficiaries.
Initially the fund did not pay a death benefit because no contributions were paid while the member was off work owing to illness.
After hearing submissions from the complainant and the fund, the Deputy Pension Funds Adjudicator, Naheem Essop, ordered the fund to allocate and pay the insured death benefit to the deceased’s beneficiaries.
The member passed away on the 18 September 2013. A death benefit of R18 691.26 was paid to the deceased’s estate late account on 26 August 2014. The quantum of the death benefit is the subject matter.
The complainant – the deceased’s son – submitted that the deceased was employed by Steval Engineering and contributed to the Metal Industries Provident Fund. He stated his mother (since deceased) informed him that the benefit would be paid to him once he became a major. He said he requested payment from the fund and was informed the benefit was paid out in 2014.
He requested proof of payment from the fund. The fund provided him with a letter stating the amount paid and the account into which it was paid. He said that he contacted the bank, which informed him that it was unable to verify the account number. The complainant was aggrieved that the fund failed to provide him with proof of payment. His desired outcome was for the fund to provide him with proof of payment and confirmation that all the benefit was paid.
The fund submitted that the employer remitted provident fund contributions on behalf of the deceased’s member for the period April 2012 to July 2013. Provident fund contributions on behalf of the deceased were not received for the period August and September 2013, as the member was off work due to ill health.
The deceased did not claim any benefit from Sick Pay and did not apply to receive an income from the Permanent Disability Scheme.
The fund stated that the beneficiaries do not meet the requirements for a full death benefit under the Temporary Absence Rules. The fund submitted that the Consolidated Provident Fund Collective Agreement for Metal Industries states the following: No deductions shall be made, or contributions paid in respect of periods of absence on unpaid leave, and absences owing to sickness, injury on duty, and military service where no payment is due to the employee by the employer in terms of an agreement or under any law.
The fund stated that the Main Agreement confirms that contributions shall only be paid based on the actual hours worked. The deceased’s contributions were not in arrears, as he was absent from work due to illness, and that no contributions were deducted from his salary.
The fund stated that the deceased did not receive remuneration and thus did not make contributions to the fund while he was away from work. These contributions are allocated to death benefits, disability benefits, fund expenses, and the remainder to retirement funding. The deceased had no contributions to cover the costs of the death benefit; thus, the deceased’s beneficiaries were not entitled to any insured death benefit.
On 21 August 2025, after an enquiry by the Office of the Pension Funds Adjudicator in respect of proof of payment, and why the benefit was paid to the estate and not distributed in terms of section 37C of the Act, the fund submitted that there was a benefit due to the beneficiaries, and it will be paid in terms of section 37C of the Act.
The fund stated that the board re-evaluated the documents and information and decided to award a full death benefit of R798 066.32 to the beneficiaries. The fund requested documentation from the complainant and other beneficiaries to help it investigate and establish dependency on the deceased.
The fund was ordered to allocate and pay the death benefit to the deceased’s beneficiaries, within two weeks of finalising its investigations.
ENDS
