IOL News reports that in a groundbreaking judgment regarding the distribution of death benefits, the Constitutional Court (ConCourt) last week held that dependency must be assessed based on facts at the date of the death of a pension fund’s member and not at the time distribution decisions were made.

In this case, Tshifhiwa Mutsila’s husband died in 2012 of work-related injuries. She was left to care for herself and their five children. She filed a claim with his pension fund, the Municipal Gratuity Fund, claiming the death benefit of R1.6 million. However, she discovered there was a competing claim from another woman, Dipuo Masete, who said she was the customary wife of the deceased and that they had two children. The fund recognised both the applicant and Masete and their respective children as dependents of the deceased. The fund allocated 47.5% of the benefits to Mutsila and 52.5% to Masete and her children.

A complaint was lodged with the Pension Funds Adjudicator who found that the fund had not conducted a proper investigation as required by the Act to identify the beneficiaries of the deceased and set aside the fund’s decision regarding the allocation of the death benefit. A number of court cases then followed.

The matter eventually went to the ConCourt, which held that a proper investigation to determine the dependency of Masete and her children had not been not carried out by the fund. It ruled that the extent of factual dependency was crucial when a fund made an equitable allocation and distribution. It further held that the date of death was to be used to determine dependency. However, that did not mean that changed circumstances could not be taken into account when the equitable allocation was made. If, at the distribution stage, there were changed circumstances that altered the needs of the dependent, the fund could have regard to these circumstances when determining an equitable distribution. The matter was referred back to the fund to conduct its investigation afresh and to consider who the dependents of the deceased were at the time of his death.

• Read the full original of the report in the above regard by Zelda Venter at IOL News

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