The Supreme Court of Appeal has upheld a ruling clarifying that retirement funds have 12 months from the date of awareness of a member's death to trace dependants and distribute benefits, ensuring accountability in fund management.
The Supreme Court of Appeal (SCA) has upheld a ruling by the Pension Funds Adjudicator that a retirement fund has 12 months from the date it becomes aware of a member’s death - not from the date of death itself - to trace dependants and distribute a death benefit.
The SCA dismissed, with costs, an appeal against a judgment of the Mpumalanga Division of the High Court.
The South African Retirement Annuity Fund had challenged the Adjudicator’s ruling of June 23, 2023, which found in favour of complainant Sophia Viljoen. The Adjudicator criticised the fund for failing to conduct a proper investigation and instead allocating the benefit to the deceased’s estate “through the back door”.
The Adjudicator held that the 12-month period in section 37C of the Pension Funds Act relates to tracing beneficiaries and not to a general payment deadline. Because tracing beneficiaries requires an investigation, the obligation arises only once the fund becomes aware of the member’s death.
