If a member of a retirement fund dies, a benefit is paid from the fund

 

The death benefit from the retirement fund is made up of the member’s savings in the fund and an insurance benefit (if the fund has this insurance). The fund’s trustees must decide how to divide the death benefit between the member’s dependants and nominees.  They must share the death benefit fairly and focus on providing for the dependants.

The fund trustees will consider the member’s wishes when they decide how to share the death benefit paid from the fund, but they don’t have to pay the benefit in the way the member wished.  The law gives the fund’s trustees the final say on how the death benefit is allocated. The trustees will be guided by the member’s wishes but must make the final decision. They will consider the late member and dependants’ circumstances when they decide how to pay the benefit.

Trustees have 12 months from the date of the member’s death to search for dependants. If the trustees don’t find dependants in this time, the benefit can be paid to someone nominated by the member to be a beneficiary. If no beneficiary is nominated, the benefit will be paid into the estate. This is why it can take some time to pay the benefit if the member didn’t have an updated Dependants and nominees form.