A mother was locked in a legal struggle with her children over the remaining R56,000 from her late husband’s retirement annuity, despite having received nearly R2 million in death benefits.

The man died in December 2015 and had nominated his wife as a beneficiary for his annuity fund.

Despite his nomination, the board decided to split the money between his daughter and eldest son, a decision that led to an uproar from their mother.

Following her complaint, the board revised its allocation to grant her a staggering 97% of the benefit while the daughter received a mere three percent.

The daughter, feeling shortchanged, took her grievance to the Pension Fund Adjudicator (PFA). She argued that at the time of her father’s passing, she was not only heavily reliant on him for financial support. She also cited unpaid medical expenses due to the fund’s delay, compounded by the challenges of the Covid-19 pandemic.

To bolster her case, she stated that despite being unaware of the R3 million payout from PPS to her mother, she knew that her mother was financially secure due to her thriving business. Additionally, she owned a guesthouse in Port Elizabeth, she inherited all her father’s vehicles and had relocated to a rented three-bedroom beachfront apartment.

Amid the unfolding drama, the daughter claimed that her contract of employment was nearing expiry, leaving her in a precarious financial situation. She detailed her struggles with covering essential living costs such as rent, medical bills, and groceries. She further indicated a need for financial assistance to settle outstanding loans with FNB and ABSA.

Due to her financial situation, she stated that her brother agreed to transfer his share of the death benefit to her, allowing her to inherit 100%. She added that her mother’s income exceeded her brother’s, despite his employment.

Explaining the sequence of events, the fund explained that it had initially excluded the mother from a portion of the death benefit because she had already received R3 million from the PPS. The board also noted that the remaining death benefit was of lesser value.

The fund submitted that the board’s preliminary decision was disputed by the mother after making a follow-up by telephone call with the claim assessor.

Her objection stemmed from not being able to meet her financial needs through other sources, attributing this to financial difficulties following her husband’s death. She requested 100% of the death benefit to be made to her, asserting her daughter and her brother were employed and therefore did not require the same level of financial support.

The death benefit processing was delayed because she did not provide additional information and supporting documents for her objection. She eventually submitted the required documents nearly four months after the initial request.

To allow the board to review allocation decision, the board asked the mother to provide income for her other dependants. This information, the board stated, would help them determine the dependants’ future income-earning potential. 

Meanwhile, from the evidence, it was found that the mother received nearly R2 million from PPS and the Government Employees Pension Fund. She also had a monthly salary of R5,000 from her employer and R5,800 from a pension fund. In contrast, her daughter received approximately R14,000 from a Sanlam policy and earned a salary of R16,500 from a job which was about to end. Her brother received R46,000 from a Sanlam policy.

The fund said it attempted to obtain the required income information and proof of the same from the complainant and her brother without success. 

Consequently, the fund adjusted its allocation in February 2022, assigning 97% to the mother and three percent to the aggrieved daughter.

The adjudicator, Muvhango Lukhaimane, determined that the mother could financially support herself, considering the funds she received and her inheritance from the deceased’s estate. In contrast, the monetary amounts received by her children were negligible.

“She has received a larger portion of the benefits and still needs more money for herself without considering the needs of her children. She received money and a business which will likely generate income for her sustenance and savings. Therefore, the decision of the board in allocating 97% of death benefit to the wife does not seem reasonable,” she said. 

Momentum retirement annuity fund was ordered to conduct a proper investigation and investigate the financial circumstances of the beneficiaries before making an allocation.

sinenhlanhla.masilela@iol.co.za

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