Family LawTrusts / Wills & Estates

Spouses and Retirement Fund Death Benefits

By 24/02/2011 July 21st, 2013 No Comments

This article is a follow-up to the previous article which related to “spouse” for the purposes of inheritance. It is not meant to be a detailed treatise of the difficulties in ascertaining what a “spouse” is, but it is a short note on comparing the definitions of “spouse” under the Intestate Succession Act and the meaning of “spouse” under the Pension Funds Act.

Just as a “spouse” will inherit in terms of the law of intestacy, so will a “spouse” benefit on the death of a member of a pension fund. The distinction between the two definitions is important. A “spouse” may be a “spouse” as defined in the Pension Funds Act and stand to benefit from the death benefit while at the same time may not be a “spouse” in terms of the law relating to intestacy.

For a “spouse” to benefit under the Intestate Succession Act, the union must have some official recognition – either as a valid marriage, or a properly witnessed and solemnised union. In terms of the Pension Funds Act (the Act), the definition is not as formal, and it is here that a “common law spouse” to use a well discussed legal fiction – may well benefit from the death of the member even though they have not entered into a formal union.

In terms of the Act, where a member of a retirement fund dies (whether the fund is a retirement annuity, provident or a pension fund) the trustees of the fund must investigate who the dependents of the member are and once they have been identified, they must distribute the death benefits accordingly.

The Act provides that the death benefit is payable to those who are dependent on the member for support, and it also defines “dependents”. The official definition of dependent is:

(a)     a person in respect of whom the member is legally liable for maintenance;

(b)     a person in respect of whom the member is not legally liable for maintenance, if such person –

(i) …;

  1. is the spouse of the member; …” (My emphasis).

A “spouse” is then defined as :

a person who is the permanent life partner or spouse or civil union partner of a member in accordance with the Marriage Act, 1961 (Act No, 68 of 1961), the Recognition of Customary Marriages Act 1968(Act No. 68 of 1997), or the Civil Union Act, 2006(Act No. 17 of 2006), or the tenets of a religion; …”

Thus, for a “spouse” to inherit a benefit from an estate on intestacy that right depends on a formal, ratifiable union but to receive a death benefit under a fund the “spouse” need show a permanent union between the partners. This union extends to partners who may be of the same sex or heterosexual.

The fact that same sex or heterosexual partners may have chosen not to enter into a formal union in terms of the legislation prevailing in South Africa, would certainly prejudice the survivor where the partner died intestate. They would be disqualified from inheriting, but where the death benefits emanated from a retirement fund, those surviving partners could benefit from the death benefits payable by the fund.

It is not meant in this article to give a detailed discussion of what facts indicate a “spouse” but this article is written to highlight the distinction of a “spouse” for the purposes of intestacy, and a “spouse” as defined in the Pension Funds Act.

 

Ian Mc Laren

Ian Mc Laren

Ian McLaren BA LLB (WITS) General Educated St Johns College, Houghton. BA LLB University of the Witwatersrand 1984 Founded McLarens Attorneys September 1986. Right of Appearance High Court, October 1996.ExpertiseLitigation, Labour Law, Commercial Law, Family Law, Pension and Provident Funds, Customs and Excise, Wills, Deceased Estates, Trusts, Commercial Agreements, Reviewing and Drafting Government Legislation, Information Technology.Committees/ TrustsLaw Society of South Africa Information Technology Committee. Trustee Verney College Educational TrustOtherTransvaal Provincial colours for Practical Shooting. Third degree Black Belt JKS Karate. Photographer and motor cyclist Lectured for Continuing Legal Education on Information Technology issues.