January 2000
The Pension Funds Act, 1956 ("the Act") provides that a benefit payable by a retirement fund on the death of a member does not form part of the deceased estate of that member and accordingly, cannot be disposed of in terms of a will. Instead, such benefits must be dealt with in the manner set out in the Act, which, on occasion, may lead to benefits being disposed of in a way never envisaged by the member.
Benefits upon the death of a member of a retirement fund are paid in the following manner:
- Where the retirement fund becomes aware of a dependant or dependants within 12 months of the member's death, to that dependant or proportionately to such dependants;
- Where the retirement fund does not become aware of any dependants within the 12 month period, and the deceased has nominated a nominee, to that nominee. However, where the deceased's estate is insolvent, before a nominee receives any benefit, an amount equal to the difference between the deceased estate's
