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Fin24 reports that the Pension Funds Adjudicator (PFA) has ordered the Alexander Forbes Retirement Fund to pay a deceased retirement fund member's benefits as his beneficiary form had instructed, and not according to its own calculations.
The fund paid 57% of the benefits to the deceased member's partner and 21.5% to each of his two sons. Yet the member had stipulated in the nomination form that his sons should get a quarter of his benefits each, and the partner should take half. The fund did its own investigation and found that the sons were unemployed and financially dependent on their father. The partner was also unemployed and financially dependent on the man until his death. She was moreover approaching retirement age. The board of trustees took the view that the partner should get more money because the sons were young and still had more earning potential. The fund then used a benefits calculator to determine how much more the partner should get, given that her age meant a higher dependency on the deceased member. But PFA Muvhango Lukhaimane said that, while the Pension Funds Act gave the board the discretion to distribute and allocate death benefits equitably, the beneficiary nomination form was binding. "The beneficiary nomination form is a substantial factor which must be given the necessary credence in reaching the decision to distribute a death benefit," said Lukhaimane. However, the PFA might have ruled differently had the board carried out "proper investigations" instead of relying on its benefit calculator. Lukhaimane also said it was not clear whether the board considered the partner's financial benefits from other sources.
- Read the full original of the report in the above regard compiled by Londiwe Buthelezi at Fin24
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