Understanding the allocation of death benefits in South African retirement funds

IT IS a sad event when a loved one, especially a parent, passes away.

- BRETT LADOUCE

Dealing with grief, family members, funeral arrangements, insurance companies, and the retirement fund of your deceased parent can increase the anxiety levels of adult children who must take control of a situation that most of us cannot fully prepare for. Emotions are high, and we try to control everything. One thing we cannot control is the allocation and payment of the death benefits by the retirement fund of our deceased parents.

In terms of section 37C of the Pension Funds Act, the trustees of a retirement fund have the obligation and discretion, to:

Section 1 of the Pension Funds Act defines a dependent, about a fund member as:

The Supreme Court of Appeal stated in the Guarnieri ruling that the purpose of section 37C of the Pension Funds Act is to protect existing and potential dependants and that it serves a social function to protect dependency, even over the clear wishes of the member.