The High Court in South African Retirement Annuity Fund v Pension Funds Adjudicator and Another clarified that the twelve-month period within which funds are to trace dependants commences to run from the date on which the fund is notified of the death of the member and not on the date of death of the member.
The salient facts of this matter were as follows:
- Mr Viljoen was a member of the South African Retirement Fund (Fund) with effect from 2006.
- He passed away on 26 Dember 2019. However, the Fund only learned of his death on 28 March 2022, well over two years later, when his spouse, Mrs Sopia Viljoen (Mrs Viljoen) submitted a claim to it.
- At the time of his death, he had not nominated beneficiaries and left no will.
- Mrs Viljoen did not bring the deceased members death to the attention of the Fund because she was not aware that he was a member of the Fund. The claim was only submitted on her behalf by the brokers who she approached after she was referred to them.
- The Fund did not trace dependants because of its understanding of the statutory provision, being that the duty to trace only arises if the Fund learns of the death within twelve months of the death of a member. In the present case, the Fund only learned of the death after the twelve months had lapsed, and as such, it decided not to investigate but to rather to effect payment of the death benefit into the deceased estate.
- Mrs Viljoen lodged a complaint with the Pension Fund Adjudicator (OPFA) after the Fund had effected payment of the death benefit into the deceased estate without tracing potential dependants.
- The Fund contended that a literal interpretation of section 37C(a) & (c) of the PFA must be applied in that the section obliges the Fund to pay the death benefit to the estate if no dependant of the deceased member is traced within twelve months from the date of his death.
- The OPFA relying on the judgment in Masindi v Chemical Industries National Provident Fund, held that the 12-month period could only have commenced to run from the time that the Fund would have become aware that the deceased had died and not from the date of death itself.
The High Court upheld the OPFA’s ruling, emphasising that section 37C was designed to protect the dependant of members and that the Fund must be proactive in tracing beneficiaries.
It is important to note that a perceived failure w in section 37C of the PFA, cannot be used as a means to condone the failure by a Fund to heed the mandate given by the same statutory provision. In addition, the duty to investigate as set out in section 37C arises regardless of the period within which the Fund is informed of the death of a member.