A disgruntled wife took the Pension Fund Adjudicator (PFA) to the Financial Services Tribunal (FST) after her 50% share from her late husband’s over R2.4 million pension fund was reduced to 25%.
The wife had four boys with her late husband.
When he died, he was survived by his elderly mother, his wife, his stepdaughter, and their four boys.
Before he died in July 2023, he had already submitted a nomination in a form of writing, dated June 16, 2016, where he determined the allocation of his pension fund as follows: 50% to his 47-year-old wife; 5% to his 29-year-old stepdaughter; and 15% for each of his three sons aged 20, 10, and eight respectively.
His 23-year-old son was not nominated, as well as his 79-year-old mother.
After his death, the wife lodged a claim for funds with Old Mutual Superfund Pension Fund and the PFA conducted an investigation before releasing the funds.
When the investigation was concluded, the funds were reallocated and the deceased’s mother and his 23-years-old-son were also added as beneficiaries.
The reallocation and addition of the beneficiaries were made as follows: The wife’s share was reduced from 50% to 25%; the eight-year-old son’s share increased from 15% to 30%; the 10-year-old son’s share was increased from 15% to 20%; the 20-year-old son’s share decreased from 15% to 10% and the 29-year-old stepdaughter’s share was kept at 5%.
The other two dependants, the 23-year-old son and the late man’s mother, were given 5% each.
The wife was unhappy with the new figures as well as the inclusion of her mother-in-law to the benefits. She sought relief at the FST.
Explaining the reallocation of funds, the PFA said the deceased’s mother was 79-years-old when her son died, she was unemployed and was financially dependent on the State’s old age grant.
Moreover, she was not receiving any financial support from her other children.
The FST agreed with the PFA’s decision and said her inclusion was fair because the deceased financially assisted her with necessary payments when he was still alive.
Regarding the wife, the FST found that 25% should be sufficient to take care of herself because she already had a decent home and her wish to build another home in Limpopo was her choice and it won’t be used as a consideration to change PFA’s decision.
It was also heard that when the husband died, they had already separated for five years.
She argued that she stopped working as a nurse due to ill-health, however, it was said that she did not provide sufficient evidence to suggest that it would not be possible to do other forms of work or that she was not employable in any other capacity.
Meanwhile, the reduction of 15% to 10% for the 20-year-old son, who is still in tertiary, the FST said the move cannot be construed as unfair or not equitable in favour of the two minors.
It emphasised that it was important to protect the interests of the two minor children who still have many years before they become of age.
“The two children, aged eight and ten respectively, have a long way to go even after matric. The 30% and 25% respectively in our view, is equitable and fair. Their benefits would be controlled and monitored by the Guardian Fund to take care of their immediate needs,” read the ruling.
Lastly, the FST said it did not agree with the PFA’s decision to allocate only 5% to the 23-year-old son on reasons that he had an income.
The FST considered the son’s email sent to the PFA during investigation explaining that he was not directly employed by the bank, but was working with a financial advisor as an assistant.
He stated that he was not permanently employed and that his contract can be terminated at any time depending on his performance.
He further added that he was not earning enough and he would often run short of transport and food.
The FST said the PFA failed to investigate the assertions made by the 23-year-old even though he had invited them to investigate all the information he had provided.
As a result, the FST said the reallocation of 5% to the 23-year-old must be set aside and referred back for reconsideration.
“The application for reconsideration regarding the rest of the nominees and the mother of the deceased as a dependant of the deceased, is destined be dismissed,” read the ruling.
sinenhlanhla.masilela@iol.co.za
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