A pension fund should have exercised better discretion when allocating a more than R1-million death benefit to the deceased’s 75-year old mother who already received a State grant, to the total exclusion of his former life partner, the Pension Funds Adjudicator has ruled.
Muvhango Lukhaimane ordered Absa Pension Fund (first respondent) to re-exercise its discretion in terms of section 37C of the Pension Funds Act and consider the request of the complainant, JT Damoense, to be allocated a share of the death benefit.
The complainant was the former life partner of LB Mantjiu who passed away on 4 March 2017. The deceased was a member of the first respondent, administered by Absa Consultants and Actuaries (Pty) Ltd (second respondent).
Following the deceased’s demise, a death benefit in the amount of R1 065 480.00 became available for distribution to his beneficiaries and dependants. The board resolved to allocate the entire benefit to the deceased’s mother, RD Mantjiu, to the exclusion of the complainant.
The complainant submitted she is a nominee in the deceased’s beneficiary nomination form and as such, she should have been considered by the fund.
The deceased passed away in a car accident together with their minor son.
The complainant said that despite the fund’s submission that it considered all the relevant factors in deciding to exclude her, it failed to consider the fact that Ms Mantjiu was 75 years of age and received an old age grant from the State which satisfied all her maintenance needs.
She submitted that the board failed to consider Ms Mantjiu’s needs, her extent of dependency on the deceased, whether or not only the deceased provided her with financial support and if she received income from other sources.
She added that the board failed to consider other sources from whence the deceased’s mother could have received some funds and what impact those funds had on her needs. She asked what socio-economic difficulty would have befallen Ms Mantjiu if she was allocated 50% of the death benefit as set out in the beneficiary nomination form.
She further asserted that the board failed to consider her personal circumstances and the fact that the complainant was a nominee entitled to 50% of the death benefit.
The second respondent submitted that during its investigation, the board established that deceased’s mother, Ms Mantjiu, was a pensioner and was financially dependent on the deceased for maintenance prior to his demise.
She was also nominated to receive 50% of the death benefit in the deceased’s beneficiary nomination form. Due to the fact that the deceased had to maintain his mother, she was accordingly identified as his factual dependant.
It stated that the deceased was involved in a life partnership with the complainant when he signed the beneficiary nomination form on 5 March 2010. The relationship between the deceased and the complainant was non-existent at the time of his demise.
During their period of break-up, the deceased maintained his son with the complainant. Thus, the extent of financial dependency of the complainant on the deceased was the contributions towards his son’s general maintenance and not directly towards the complainant’s financial needs.
In this regard, it referred to an affidavit signed by the complainant wherein she stated that the deceased provided her with money in respect of their son’s maintenance.
The board’s investigation revealed that the complainant was gainfully employed and earned R21 000 per month, was 37 years of age and fully able to generate income through her employment.
It submitted that even though the complainant was a nominee, the board identified her as not being financially dependent on the deceased. The level of financial dependency to maintain their son did not exist anymore as their son passed away with the deceased.
In her determination, Ms Lukhaimane said in principle a member is legally liable for the maintenance of a spouse and children as they rely on the member for the necessities of life. In the case of factual dependants, where there is no duty of support, a person might still be a dependant if the deceased in some way contributed to the maintenance of that person.
She said having conducted its investigation, the board resolved to allocate the entire death benefit to the deceased’s mother, to the exclusion of the complainant.
However, she said where there are dependants and nominees, the Act provided for the board to make an equitable distribution.
“In the present matter, the amount of the death benefit is R1 065 480.
“Ms Mantjiu was proven to have been financially dependent on the deceased, received an old age pension from the State and was allocated the entire amount of the death benefit.
“Ms Mantjiu also received a payment in respect of a group life assurance benefit. On the other hand, the complainant who is 37 years of age was excluded and is earning a monthly salary of R21 000.”
Ms Lukhaimane said one of the critical sore points was that the deceased completed a beneficiary nomination form assigning 50% of the death benefit to the complainant and another half to his mother. However, the board failed to follow the deceased’s wishes.
“The board should have considered the complainant on the basis that she was a
nominee. The complainant did not have to prove that she was financially dependent on the deceased for her to be considered.
“The mere status of being a nominee compelled the fund to consider her situation
together with the totality of other relevant factors.”
Ms Lukhaimane set aside the decision of the board of the first respondent to allocate the entire amount of the death benefit to Ms Mantjiu, to the exclusion of the complainant, without considering relevant factors.
The board of the first respondent was ordered to re-exercise its discretion in terms of section 37C of the Act, considering the issues raised in this determination,” said Ms Lukhaimane.
(031) 201 0550 / 083 326 3962
On behalf of:
Pension Funds Adjudicator
ABOUT THE PENSION FUNDS ADJUDICATOR
The Office of the Pension Funds Adjudicator (OPFA) is a statutory body established to resolve disputes in a procedurally fair, economical and expeditious manner. The adjudicator's office investigates and determines complaints of abuse of power, maladministration, disputes of fact or law and employer dereliction of duty in respect of pension funds. The OPFA is situated in Pretoria, Gauteng.
For general enquiries or to lodge a complaint visit www.pfa.org.za, call 012 346 1738 or email Enquiries@pfa.org.za