Question:
Please indicate with which investment/ fund children over 21yrs are not elegible to benefit on the death of the parent even if listed as a beneficiary?
Answer:
There are no such rules. The payment of death benefits from a Pension, Provident or Retirement annuity fund is regulated by section 37C of the Pension Funds Act 24 of 1956. When a member dies and a claim is made, the trustees of the fund must follow the requirements as set out in the Act and cannot merely follow the beneficiary nomination which was made by the member. In determining who will receive the benefit on the death of a member, the trustees are granted 12 months from the date of death to search for any dependents of the deceased member. This must be done despite the presence of a beneficiary nomination.
The trustees have the final say with regards to the distribution of the death benefit, however, they must ensure that there is equitable distribution. The beneficiary nomination acts merely as a guideline to the trustees as to the wishes of the member and will be taken into consideration when investigating the claim.
The trustees need to take the following matters into consideration: 1. The age of the parties involved 2. Their relationship with the deceased 3. The extent of their dependency on the deceased, if any (did the deceased provide any money to them) 4. The financial status and affairs of the dependents (employment, capability of managing money) 5. The future earning potential of the dependents (are they likely to find employment if unemployed; are they students; are they disabled etc) In addition, the trustees also need to take into consideration: i. Parties the deceased had a legal duty to support (spouses, children, parents, grandparents, unborn children, etc) ii. Factual dependents (common law spouses and same-sex partners) iii. Customary law spouses iv. Major children of the deceased who had a legal responsibility to support children who are over 21 and who still rely on the deceased for financial support (e.g. because they are studying or unemployed) would still share in the distribution per the trustee's discretion. And if the deceased has no financial dependents, and nominates his children aged 21 and over, then those children would in all likelihood be awarded the death benefit.
