Pension fund judge overrules trustees, writes Isaac Moledi

In another important ruling about pension fund benefits, funds adjudicator Mamodupe Mohlala has ruled differently to the fund's trustees. Mohlala made a determination in favour of a mother of a deceased son who was not properly considered by the trustees.

In another important ruling about pension fund benefits, funds adjudicator Mamodupe Mohlala has ruled differently to the fund's trustees. Mohlala made a determination in favour of a mother of a deceased son who was not properly considered by the trustees.

Puseletso Franscina Ntsane, 46, of Johannesburg, approached the adjudicator after her deceased son's fund, the Municipal Employees Pension Fund, decided to pay her R10347 from his R103476 share.

She was also not given a monthly pension.

At the time of her son's death, Ntsane's eight-year old grandson, Sekhonyana Motumi, born out of wedlock, received R93128 in trust.

The child, who is now 13 years old, received R571 a month.

The deceased, an employee of Westonaria Local Municipality, died on July 27, 2003.

Ntsane was dissatisfied with the lump-sum death benefit she received from the fund trustees.

She also wanted the trustees to break down her death benefit.

Though there was no dispute that Sekhonyana was her son's child, Ntsane argued that her son was not married when he died.

In terms of the Municipal Employees Pension Fund rules, a death benefit is payable to the deceased's dependants after his death.

In determining an equitable share of the benefit, the trustees considered the following:

l The ages of the two beneficiaries;

l The relationship between the deceased and the beneficiaries;

l The extent of dependency of the beneficiaries on the deceased.

The deceased was fully responsible for maintaining his son. The child's mother was unemployed and depended entirely on the deceased to support their son.

Ntsane stated in her application that she was dependent on the deceased because he gave her R600 a month.

The fund also considered that the child was 13 years from the age of maturity.

The trustees said their decision was taken after considering various sections of the fund's rules relating to death benefits, the peculiar facts of the dependants and Section 37C of the act.

It states that the trustees have the discretion to pay dependants as they deem equitable to a dependant or in proportion to some or all traced dependants.

Ntsane's representative argued: "Had the board of trustees applied its mind to the rules of the fund, especially Rule 41(1)(b)(c) and (d), it would have arrived at a different decision based on fairness and equity, and the complainant would have been paid the benefit as if she is a child, that is, equal benefit to what the child was entitled to."

The adjudicator was satisfied that the fund acted reasonably and properly in making the distribution.

But the fund's rules also provided for the payment of a parent's pension.

The adjudicator examined rule 41, where a member is survived by a financially-dependent parent or parents. In such a case, a parent is entitled to a monthly annuity payable by the fund.

It was clear that the complainant, the mother, was financially dependent on the member. The adjudicator was of the view that Ntsane was also entitled to a monthly annuity.

The fund was ordered to pay Ntsane monthly annuities from August 2003 to the date of the determination as a lump sum, plus its interest. It was also ordered to pay her a monthly annuity in terms of the rules of the fund.

This ruling again serves as an important reminder that on the death of a member, beneficiaries are not only entitled to a lump sum payment, but may also be entitled to specific pensions regulated in the fund's rules.

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