Before you bid farewell to 2021
Please take a moment to consider your loved ones.
As a Fund member, you are eligible for a death benefit, in line with your Fund’s rules, and possibly another benefit according to your Employer’s policies. In this article, we will be focusing on the death benefit provided by your Fund.
In terms of the Pension Funds Act, your dependants must be considered by the Trustees when they decide in what share to distribute your Fund benefit. In other words, your Fund benefit is not distributed according to your Last Will and Testament.
The Trustees of your Fund are legally required to conduct an investigation to determine who gets what, and while they will take your nominated beneficiaries into account, these are not the only people they will consider. They need to consider anyone who is a dependant, including people you have not nominated, such as children from a previous marriage, or illegitimate children that perhaps even your spouse is not aware of.
Section 37C of the Pension Funds Act guides Trustees and helps them ensure that this benefit is shared in the fairest way possible, to make sure that all dependants left behind are looked after financially.
If you have excluded certain dependants as defined in the Pension Funds Act, or if your nominations are incomplete, they have to investigate to make sure the right people are taken care of. This could take a long time, and it might cause extra distress (both emotional and financial) for the dependants you leave behind.
Dependants are the people who rely on you financially, and those who you have a legal obligation to support. Examples of legal dependants are your spouse and all biological or adopted children.
There could also be factual dependants relying on you finanically, such as a life partner, a cousin, a friend, or your parents, if you are supporting them.
Your Nomination of Beneficiary Form is used to guide the Board when allocating the death benefit. They have the right to distribute your death benefit to dependants and/or nominees in a manner that they believe to be fair and just to all parties.
Unless your nominations are up to date, this payment could be significantly delayed, resulting in financial and emotional suffering for those you hold most dear.
Don’t forget that if you get married or divorced; if a child is born; or if a dependant or nominee dies; you must update your nominated beneficiaries.
Did you know?
Every year, pension boards and legislative bodies sit with millions of rands in unclaimed benefits. Some of these cases could have been resolved if Fund members had updated their beneficiary nomination forms. That’s why it’s a good idea to make a habit of regularly revisiting your plans and deciding whether they are still in line with what you want.
It is recommended that you review your nominated beneficiaries once a year. Why not take a minute and do so today?
The information in this communication is for information purposes and is not intended to be detailed advice described in the Financial Advisory and Intermediary Services Act. The fund, administrator and trustees cannot be held liable for damage or loss suffered as a result of any action that you take based on the contents of this communication.