Pretoria - The trustees of a retirement fund are not bound by the wishes of the holder as to who should receive the money – even if the holder stipulated those wishes on the beneficiary nomination form prior to death.
This was once again confirmed by the high court in Durban when the customary law wife of a deceased complained that she and her husband’s common law wife each received 40% of the pension payout of the deceased.
To make matters worse, two of the deceased’s adult children from another relationship were each also earmarked by the fund to receive money, while a minor child from yet another relationship was due to also receive a portion.
The parties are not identified as a minor child is involved.
The customary wife turned to the court to have the “nonsensical and unlawful” decision by the pension fund’s trustees overturned.
She said her now-deceased husband made it clear on the beneficiary nomination form that she was due to receive 60% of his pension and that two of their children would receive 10% each.
Also, she said, he nominated two of his children with his common law wife to receive 10% each of his pension.
The customary wife said the common law wife was now getting the same cut as her – 40% – while none of their children (all adults) were receiving a cent.
Instead, she said, three children from two other relationships – two unemployed adult children and a minor – were each getting a cut.
The deceased died in September 2018. He was survived by his customary law and common law wives, as well as 10 children (three from two other women). He had been married to his customary wife since 1988 and to his common law wife since 1983. There were five surviving adult children born of the relationship between the deceased and his customary law wife and two adult children born of his relationship with the other wife.
At the time of his death, the deceased was employed by Transnet and a member of the Transnet Retirement Fund, and his pension stood at R3.9 million.
In October 2000, he nominated his customary law wife and some of his children in a beneficiary nomination form.
The customary wife said the fund’s allocation of the money was wrong, but the fund argued it was not bound by the nomination form and entitled to make an independent apportionment of the deceased’s death benefit to his qualifying dependants as defined in the fund’s rules. In terms of the Transnet Pension Fund Act, the fund’s administrators could determine who are dependants of the deceased.
The customary wife said the fund did not take the deceased’s wishes in the nomination form into account. She said its decision to deviate from it was irrational and unreasonable because it was made without any valid reasons.
She also objected to the allocation of the same percentage of benefits to her and the other wife. She accepted the other woman was a life partner of the deceased, but disputed that she was a “qualifying spouse” as defined in the fund’s rules.
The fund argued that the deceased’s wishes are but one factor to be considered and that the court should not interfere in the exercise of this discretion if the decision made is reasonable and rational.
The fund said it did not ignore the contents of the deceased’s nomination form – but an allocation of 60% to the customary wife and 20% to two of her adult children, with only 20% allocated to two of the other wife’s children (with no provision made for her) was not equitable.
The court concluded the fund was within its rights to do this.
Pretoria News