Life changes fast: a new baby, a new partner, a promotion, a move across town – but when did you last check that your retirement fund records were up to date?
A quick reminder
You may already know that a retirement fund death benefit does not automatically go to the person(s) named on your nomination form.
Under Section 37C of the Pension Funds Act, trustees must first find everyone who depended on you financially when you died and then share the benefit fairly among them. Your nomination form still guides that search, but the final decision rests with the trustees.
Five things you can do today
You cannot control the decisions trustees make, but you can make sure they have everything they need to work quickly and fairly. You should:
- Update your nomination form whenever important relationships in your life change: marriage, divorce, a new child, a new partner, or when you start supporting a parent or a friend.
- Keep proof of who depends on you financially, such as bank transfers, cash-send records, e-wallets or grocery slips.
- Keep certified copies of your ID, marriage certificate or proof of a customary union or life partnership, and your children’s birth certificates, together in one place.
- If someone else looks after your minor children, ask them to keep proof of guardianship on hand, in case it is ever needed.
- Make sure your fund has your current contact details and tell a trusted family member or friend where to find all of this.
Why your documents matter
When a death benefit claim is lodged, trustees and administrators cannot pay anyone until they have all the necessary documents. Things become more complicated as the size of your family or circle of dependants increases. The more organised your administration is, the easier it will be to settle your affairs and enable all your dependants to live a life without you.
Trustees check:
- Who lived with you
- Who you supported financially
- Your minor children
- Your spouse or life partner
- Anyone you maintained (parents, siblings, a mistress, others)
Missing paperwork is one of the most common reasons death benefit claims take months rather than weeks to finalise. Having these documents ready in advance will not change how trustees decide, but it removes one of the biggest sources of delay once a claim begins.
None of this guarantees how your benefit will be shared, but it gives trustees the full picture of who depends on you and saves your family and other loved ones from chasing paperwork during an already difficult time.
Further reading
Death benefits: What members should know
Death benefits: What trustees should know
Sources
Cliffe Dekker Hofmeyr: Constitutional Court clarifies the interpretation of ‘dependency’ under section 37C of the Pension Funds Act
Moneyweb: Section 37C of the Pension Funds Act: How your death benefits are allocated; The distribution of retirement death benefits
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All content is for general educational purposes and does not constitute formal financial advice. Always consult a qualified, licensed financial professional before making any financial decisions.