The Sanlam Umbrella Fund has been ordered to allocate a bigger portion of a man’s close to R2 million death benefit to his adult children who were also dependent on him.
The matter relates to a complaint received by the Pension Funds Adjudicator (PFA) on July 20 last year, by his four adult children, who said they were dissatisfied that they were only allocated 1% each of their father’s R1 869 076.45 death benefit.
The deceased’s widow and two minor children were allocated 96% of the death benefit.
The four complainants submitted that the deceased was paying maintenance for two of them and sent money to the other two.
They also said that they were all unemployed, experiencing financial hardship and were left destitute by the death of their father.
Amid their concerns, included confirmation that an amount of R1 902 639.84, a Sanlam Life benefit, was also already paid to an estate account. They said part of this amount should have been allocated among them.
The complainants added that the spouse had stated in her claim form that she is a beneficiary of four different funeral policies and benefited from his Unemployment Insurance Fund.
They further said that they had visited the Master’s Office after they were told to report fraudulent activities committed against the deceased estate and its beneficiaries by the spouse.
In its response to their concerns, the fund said it had identified the spouse and six children as beneficiaries, including the complainants. The fund submitted that letters were sent to the beneficiaries on July 24, 2022, informing them about the board’s decision and welcomed any objections.
Two of the complainants responded, rejecting the 1% allocated to each of them. The fund submitted that on receipt of the objections, it requested the spouse to provide contact details of the executor of the estate so that the fund could ascertain how much of the estate was going to devolve to the spouse and each of the children. The spouse responded stating that she was nominated as the Master’s representative.
The fund submitted that it subsequently enquired from Sanlam Life to whom the unapproved group life benefit of R1 902 640 was paid.
The insurer confirmed that the full amount was paid to the spouse. The spouse was informed that in terms of the Laws of Intestate Succession, the unapproved group life benefit of R1 902 640.00 should have been allocated equally between herself and the six children of the deceased. She was requested to provide information regarding how much each child had received, how the amounts were calculated, and when the payments were paid.
As the matter progressed, PFA Muvhango Lukhaimane arranged a hearing of all parties to expedite the matter as the fund had insufficient information to arrive at the decision it did; the spouse had not been forthcoming with information to substantiate her financial position; and the children were going through financial hardship owing to the prolonged finalisation of the matter.
The spouse gave a breakdown how R902 640.00 of the unapproved group life benefit had been spent and said the remainder of the funds were in the process of being transferred to the estate account.
Ultimately, the adjudicator ruled: “During the hearing, the spouse submitted that the group life benefit was paid to her. She utilised the group life benefit on aspects that cannot be classified as necessities and, therefore, does not appear to be short of money.
“Should the fund be inclined to consider her for a portion of the death benefit, a detailed consideration must be provided to the rest of the beneficiaries as to the reasons. The complainants’ submissions indicate that they are all unemployed, experiencing financial hardship and were left destitute by the death of the deceased.
“It should be noted that dependency is a critical point to consider in the allocation of the death benefit. In light of the above, the board’s decision is set aside.” In response to the outcome, Sanlam Umbrella Fund principal officer Joelene Moodley said: “The Fund received additional information from the potential beneficiaries after a hearing conducted by the Pension Funds Adjudicator. The Board has respected and acted on the Adjudicator ruling, made revised allocations and informed all the beneficiaries of the revised allocations. We can confirm that no objections were received from the beneficiaries to the new allocation.
The Board is thus satisfied that an equitable allocation was made.”
Cape Times