Life partner prevails in R8.3m pension dispute

The Pension Funds Adjudicator has dismissed a complaint by the sister of a deceased pension fund member over the distribution of his R8.3 million death benefit. The ruling upheld the trustees’ decision to allocate 45% of the benefit to the sister and 45% to the member’s permanent life partner. Theadjudicator’sconclusion endorses Section 37C of the Pension Funds Act, which states that death benefits must be distributed equitably among dependants, regardless of beneficiary nominations or wills.

For example, under this section, the retirement fund trustees may decide to allocate most or all of the death benefit to a deceased member’s spouse and children because they are dependants. The nominee is therefore not automatically entitled to receive the benefit simply because they were nominated or named in the will or beneficiary nomination form. The ruling followed a dispute over the death benefit of a member of the Corporate Selection Umbrella Retirement Fund who died in May 2024.

The deceased’s sister and her two children challenged the fund’s decision to recognise a woman identified only as ‘M’ as his permanent life partner and allocate 45% of the benefit to the life partner and the sister. The remaining 10% of the benefit was shared equally between the deceased’s niece and nephew. The complainants argued that the deceased had nominated his sister to receive 100% of the benefit in 2005 and that ‘M’ did not qualify asa permanent life partner.

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They also alleged that the trustees failed to provide full reasons for their decision, disclose evidence or properly consider competing versions. The fund maintained that ‘M’ had been in a relationship with the deceased for about 20 years, that they had cohabited from July 2023 until his death at his residence in Sandton in Johannesburg, and that he provided her with consistent financial support.

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