PFA dismisses woman’s claim to R21m death benefit

The parties had agreed that there would be no sharing of pension benefits. Picture: Independent Newspapers.

The parties had agreed that there would be no sharing of pension benefits. Picture: Independent Newspapers.

Published Apr 13, 2024


The Pension Funds Adjudicator Muvhango Lukhaimane has dismissed a claim of a death benefit worth R21 million due to her signing a cohabitation agreement which shows that the parties agreed that there would be no sharing of pension benefits.

This comes after a woman who spent 17 years as a businessman’s life partner failed in her bid to lay claim to a share in the death benefit amounting to R21.3 million.

According to the Office of the Pension Funds Adjudicator (OPFA), the woman complained to the Pension Funds Adjudicator that Old Mutual Superfund Provident Fund should not have paid the full death benefit only to the deceased’s two biological daughters.

“The complainant was aggrieved she had been excluded as a beneficiary of the death benefit, notwithstanding the fact that she had received R7,000,000 from a life policy due to the deceased’s death; was bequeathed immovable property estimated at R1,700,000; and received R35,000 each month in terms of the deceased’s will.

“The deceased was a member of the fund until he passed away on July 24, 2021. The deceased was survived by the life partner (complainant); the complainant’s major son; the deceased’s two biological daughters; four grandchildren; and his former spouse,” it said.

The OPFA said upon the deceased’s death, a total death benefit of R21,308,051.38 became available for allocation to his beneficiaries. The board allocated 50% of the death benefit to each of the deceased’s two daughters.

“The complainant submitted that she had been in a romantic relationship with the deceased since 2007. She had resigned from her employment at a bank to attend to the needs of the deceased and her then-minor child at home.

“She said the deceased financially assisted her by giving her an allowance equal to the salary she had received for the duration of their relationship. She said the deceased was financially responsible for supporting her and her child from a former spouse throughout their 17-year relationship,” it said.

According to the OPFA, the complainant also averred that she had property that she obtained from her former spouse through a divorce. The deceased assisted her in paying off her mortgage bond by providing her with R700,000. She sold her property for R967,592.72 to reside with the deceased, who in turn, would provide for her.

“She submitted that shortly after selling her property, she and the deceased entered into a cohabitation agreement. She submitted that at the time, she had just sold her residential property and felt compelled to agree with the terms of the agreement in fear that she would be left without a home for herself and her son.

“She submitted that since signing the agreement and residing with the deceased, there had been instances of financial manipulation against her by the deceased as he would request large sums of money, which she would pay him. She submitted that her only source of income during her relationship with the deceased was the maintenance payments made by her former spouse, credit overdraft facilities, and the sporadic but sufficient payments in cash/deposits from the deceased,” the OPFA said.

The complainant claimed that when she signed a cohabitation agreement with the deceased in February 2014, there were no witnesses, and some of the terms of the agreement were not explained to her, it said.

The complainant submitted that she was informed by the executor of the deceased’s estate that his estate was insolvent and incapable of providing the necessary finance anticipated for the establishment of a trust that she was the beneficiary of.

“The complainant submitted that she received a life insurance policy payout (R7 million) following the deceased’s passing. She indicated that though it is a substantial amount, it does not cover all living expenses and potential unforeseen costs.

“She submitted that her former spouse had been financially responsible for her son since the deceased passed away. She submitted that her son was in the final year of his studies and moved out, leaving her without a maintenance contribution from her former spouse. She submitted that she has not worked for 15 years and struggled to obtain employment at her age. She submitted that her policy payment may not last throughout her lifetime,” it said.

The complainant submitted that the executor of the deceased’s estate paid her an estimated amount of R35,000 per month as she was aware of the extent of her dependency on the deceased, the OPFA said.

“The complainant claimed that she suffers from a clinically diagnosed auto-immune disease, lupus, which influences her daily functioning. She had applied for various jobs of different skill levels, with no success. She submitted that she is close to retirement age, which limits her ability to earn income, which indicates that she may not be able to earn an income in the future,” it said.

According to the OPFA, in its response, the fund submitted that in terms of the deceased’s will, the deceased made provisions for the complainant to receive a monthly amount of R35,000. Thus, it can be argued that the complainant no longer needs financial support. The fund submitted that the complainant was also bequeathed immovable property estimated at R1,700,000.

“The fund submitted that according to the cohabitation agreement is a clear indication that the deceased did not wish for the complainant to have any share in the proceeds of his death benefit,” it said.

In her determination, Lukhaimane said it is the board’s responsibility when dealing with the payment of death benefits to conduct a thorough investigation to determine the beneficiaries, to thereafter decide on an equitable distribution, and finally to decide on the most appropriate mode of payment of the benefit payable.

She said the fund was correct in identifying the deceased’s biological daughters as dependants of the deceased.

She said permanent life partners are included in the definition of dependant. Therefore, the complainant qualifies as a legal dependant of the deceased. However, the fact that a person qualifies as a legal or factual dependant does not automatically give them the right to receive a portion of a death benefit.

“It is further unconfirmed whether or not the deceased’s estate is insolvent. However, if the estate is not insolvent, the complainant was also bequeathed immovable property estimated at R1,700,000.

“The complainant was placed in a better position due to the third-party payment she received. Furthermore, the complainant can still find employment. The facts indicate that even though she is 52 years old, she has prior work experience and a tertiary-level education. She still has an income-earning potential and can find employment. Therefore, the fund was correct in not allocating a portion of the death benefit to the complainant,” said Ms Lukhaimane.

On the cohabitation agreement, Lukhaimane said the complainant should have been aware of what she was signing and cannot claim that the terms of the agreement were not explained to her. The terms of the cohabitation agreement clearly show that the parties agreed that there would be no sharing of pension benefits.

“In light of the above, I am satisfied that the board of the fund took into account relevant factors and did not abuse its discretion in the allocation of the deceased’s death benefit.

“The death benefit was properly allocated to the dependants of the deceased, and there is no reason to set aside the board’s decision. Thus, the complaint cannot succeed and is, therefore, dismissed,” said Lukhaimane.