Death benefits: Marriage doesn't guarantee payout, Pension Funds Adjudicator rules

Being married does not mean a spouse will automatically receive a death benefit when one's partner dies, the Pension Funds Adjudicator (PFA) has said.

The fund said financial dependency of the surviving spouse is a key determining factor when the pension fund allocates death benefits. In a recent complaint that the PFA dismissed, a customary wife said that she was excluded from the allocation of her husband’s death benefit.

The wife complained that the Eskom Pension And Provident Fund had not considered her for a share of the death benefit. Upon the death of the deceased on 19 July 2023, a lumpsum death benefit of R882 984 became available for allocation to his beneficiaries.

The board of management of the fund resolved to allocate the death benefit as follows: 18% to a 51-year-old life partner; 30% to a son in the first household; 25% to a daughter in the second household; and 9% to each of three daughters from the third household.

The complainant said she was customarily married to the deceased until 2021, when she left her matrimonial home. She said the divorce was still pending.

The fund said that her late husband had not kept her as a beneficiary at the time of his death and therefore she was not entitled to a portion of the death benefit.

However, the woman said she was married to the man and therefore was entitled to a portion of his pension.

The Eskom pension fund said that its rules provide for the pension to be payable to multiple spouses. However, the fund stated that at the time of the investigation, the customary wife had indicated that she and the deceased were in the process of a divorce and that she was not residing with him at the date of his death.

Further, she was not dependent on the deceased for maintenance, and he only supported their child. The fund submitted that at the time of the investigation, the customary wife did not qualify as a spouse in terms of the rules of the fund.

The customary wife then had the marriage registered after his death, but the fund said this did not entitle her to the portion of the death benefit.

In a determination on the matter, the PFA said marriage was not a decisive factor in the allocation of the death benefit.

“The extent to which a dependant was dependent on the deceased is a significant factor to consider by the board when allocating the death benefit.

“The deceased and the customary wife had separated and had not resided together since 2021. She was also removed as a beneficiary from his medical aid. Further, she indicated to the fund that she was not financially dependent on the deceased at the date of his death.

“Thus, although the complainant was customarily married to the deceased, she was not financially dependent on him at the date of his death. Therefore, she was not entitled to a portion of the death benefit,” the PFA said.

In dismissing the complaint, the PFA was satisfied that the death benefit was allocated properly to the dependants of the deceased and there was no reason to set aside the board’s decision.

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