Your dependants and nominee’s form

It’s much easier for the trustees and the employer to find out who the dependants and nominees are if you keep the dependants and nominees form up to date. This can shorten the time it takes to pay a death benefit.

When you complete the form, you should list all your legal dependants and people who are financially dependent on you. Your dependants are people you are legally responsible for supporting or who are financially dependent on you. This includes spouses and children (biological or adopted). You can nominate someone who is not a legal or factual dependant to share your death benefit. It is a good idea to include contact details for the dependants and nominees.

If there are changes in your life (for example, getting married, divorced, or having a child), you should update the form. You can get the form from your human resources or payroll department.

If you have a tax unapproved death benefit

If your employer offers a tax unapproved death benefit, the insurance will not be paid to the retirement fund if there is a death benefit. Previously, the law allowed the employer the discretion on how to distribute this type of death benefit, provided the policy allowed for this. Recent changes to the law require that the benefit must be paid directly to the people nominated to receive the benefit. If there is no beneficiary form on record, the death benefit must be paid to the estate.

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. Therefore, it can take some time to pay the benefit if the member didn’t have an updated Dependants and nominee’s form.