Retirement fund death claims process

This means that the Trustees will assess the death claim and decide how the benefit will be allocated between the different beneficiaries. Even though the deceased member may have nominated a beneficiary, the benefit may not be allocated according to the nomination. The Trustees will take the nomination into account, but they may not necessarily follow it.

• Identify potential beneficiaries. These are dependants (defined in paragraph 3 below) or nominees (persons who do not qualify as dependants who the deceased member nominated to receive the benefit).
• Determine the level of dependency of the persons who qualify as dependants. This includes asking for proof of what the member paid for in respect of the person claiming financial dependency, such as bank statements, proof of medical scheme payment or a copy of a maintenance order. Such proof also helps the Trustees to determine what that person’s level of dependency was.
• Obtain details of any other benefit pay-outs. The Trustees take other benefit pay-outs into account to find out to what extent that may meet the dependant’s financial needs.

Legal dependant: a person who the member had a legal obligation to maintain, for example a minor child or a former spouse with a maintenance order;

Factual dependant: a person who the member maintained even though there was no legal obligation to do so, for example someone who lived with the member;

Spouse: includes a person whom the member legally married, a customary law spouse and a permanent life partner;

Child: includes a major child and a stepchild; and

Future dependant: someone who the member would have had to maintain if the member did not die, for example, a fiancé or a child who was not born yet at the date of the member’s death.

Even though they qualify as a deceased member’s dependant or nominated beneficiary, the Trustees may decide that it is fair to not allocate a portion to specific dependants and/or nominees. The Trustees will decide how to allocate the benefit based on the facts of each claim.

After the Trustees make an initial decision on the allocation, all interested parties are given time to provide extra information that may impact the Trustees’ decision. That extra information may affect the decision and the Trustees may allocate a higher amount, a lesser amount or even change the allocation to a specific beneficiary to zero.

Although a person may not have been legally married to the deceased member, that person may be treated as the deceased member’s spouse. The Trustees will look at the information to see if the relationship was a permanent one, for example, by looking at whether they lived together and for how long, whether they shared expenses or whether they were medical aid dependants. A partner in a Muslim or Hindu marriage will also be considered as a spouse of the deceased member.

Although a child qualifies as a legal dependant, the Trustees may still decide not to allocate a portion of the benefit to that child. The Trustees will look at several factors, such as each dependant’s financial needs, their ages, whether they are employed or their chances of becoming employed, to decide on the allocation.

The benefit does not form part of the joint estate and the death benefit will be distributed according to how the Trustees decide it should be allocated.

The benefit is meant to replace the loss of support that dependants suffer when a member dies. To achieve this, the benefit is allocated to the dependants directly. This means that the benefit will not be used to settle the debts of the estate and there is no estate duty or executor fees paid on the benefit. The benefit may be paid to the estate if there are no dependants and the Trustees allocate the benefit to a non-dependant nominee, and the estate has a shortfall. The shortfall is settled first and any amount remaining will be paid to the nominee. If the member was in arrears with their maintenance obligation when they passed away, this can be claimed from the deceased member’s estate. The person who was entitled to maintenance cannot claim the arrear maintenance from the fund.

If a beneficiary does not want the portion of the death benefit allocated to them and renounces their right to receive the benefit, the Trustees will decide how the benefit will be reallocated.