Does your husband’s bae qualify for his retirement benefits?

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The payment of benefits from a deceased’s retirement fund is a contentious issue.  Photo: Getty Images
The payment of benefits from a deceased’s retirement fund is a contentious issue. Photo: Getty Images

PERSONAL FINANCE 


There have recently been some social media posts from aggrieved wives complaining that the girlfriend of the deceased husband has been paid a portion of his retirement benefit.

In one case, the girlfriend was married to another man, yet was financially supported by her married lover. In another case, a woman lived with her life partner with whom she was having a baby, yet the retirement fund paid a portion of the benefit to his previous partner because theirs had been a customary marriage and it had never been dissolved.

The payment of benefits from a deceased’s retirement fund is a contentious issue. Under section 37(c) of the Pension Funds Act, the trustees of the retirement fund must allocate the benefits based on factual and legal dependency and they have 12 months to investigate all claims.

A legal obligation will include a court order to pay maintenance to an ex-spouse and/or minor children. While legal dependency may be easy to determine, financial dependency is often more challenging.


As Sanlam Trust senior legal adviser David Thomson explains, dependency applies to numerous types of relationships.

A dependant includes a spouse who, irrespective of the financial position of the spouse, would qualify for a portion of the retirement benefit.

A child would have a claim as a legal dependant even if the child was born outside of a formal relationship or adopted. Any other relationship in which the individual was dependent on the member for financial support would have a claim. This could include girlfriends or parents.

Thomson says that, while trustees must consider all factual or legal dependants, they have discretion in the amount they allocate per dependant – the act refers to what “may be deemed equitable”.

For example, if the spouse was financially well-off and the children were still young, the trustee may allocate a higher percentage to the minor children. If an elderly parent had a claim based on support they received, the trustee would consider the extent of that support and the life expectancy of the parent.

READ: Husband ran off with his pension, but is now claiming his wife's payout too. What to do?

Claims by adult children: Adult children do have a claim if they were financially dependent on the deceased for maintenance. They may also have a claim if they are listed as beneficiaries on the nomination form.

However, the trustees would be required to consider other dependants and their relative financial dependency. If, for example, the spouse was financially dependent on the deceased, the trustees would consider the spouse’s claim before that of adult children.

Child outside of marriage: In cases in which a child is born outside of the marriage, it is not uncommon for the family to contest the legitimacy of the child and require a paternity test.

Thomson says that, while trustees may request a paternity test, if the mother refuses to have the test and can prove that the father provided for the child, they would probably consider the child a dependant.

Separated but still married: Thomson says that, in a case in which a wife is estranged, she still has a claim on the retirement fund. A case was brought to the Pension Funds Adjudicator (PFA) in which the daughters contested a benefit paid to their late father’s wife, as the couple were separated and did not live together, and he had nominated them as beneficiaries.

The PFA dismissed the daughters’ claim as, legally, the couple were still married and she was dependent on him for maintenance. Thomson says the trustees would have considered that the couple had been married for 53 years and only separated for four months.

Lobola has been paid: While a spouse married under customary law is considered a legal dependant, Thomson says a traditional ceremony concluding the marriage would need to have taken place.

There are many situations in which lobola has been paid but the couple decided not to go ahead with marriage and the relationship ended. In this case, the trustees would not consider the couple as married, unless they were living together as “permanent life partners”, in which case he/she would qualify as a spouse.

Girlfriend is married: Thomson says that, even if the girlfriend of the deceased is married to someone else, the trustees would be obliged to consider financial dependency. It could be that her husband was not supporting her financially and she was relying on the deceased for maintenance.

Claim of a life partner: A permanent life partner is defined in terms of our Pension Funds Act as a spouse. However, it would need to be shown that the couple were living together and considered the relationship to be permanent.

Thomson says that, to remove any dispute, it is best to have a life partnership agreement in place. The member should also nominate the life partner on the retirement form and specify that they are life partners.

Claim of unborn child: In the PFA, it stipulates that a dependant can also include a person with respect to which “the member would have become legally liable had they not died”.

This would apply in the case of an unborn child. Even if the father passed away before they were born, at birth the child would have a claim on the deceased father’s retirement fund.

READ: Money matters: Will my life partner status be recognised?

Thomson says this clause could also apply if, for example, the member passed away just before he or she was due to get married. In this case, the fiancé could have a claim as a spouse.

No dependants: If no dependants are found, the trustees will pay the benefits to the designated nominees (beneficiaries nominated by the deceased member during their lifetime). However, if the member’s estate is insolvent, the act provides that the shortfall shall first be paid to the deceased estate before the nominees receive anything.

If you are not happy with a ruling by the retirement fund, you have the right to appeal to the PFA.

For general enquiries or to lodge a complaint, visit pfa.org.za, call 012 346 1738 or email enquiries@pfa.org.za.

In the case of the Government Employees’ Pension Fund, one can lodge a complaint with the Government Employees’ Pension Ombud. Visit gepo.co.za, email enquiries@gepo.co.za or call 012 110 4950


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