Adjudicator gives provident fund the thumbs up for paying ‘expired’ death benefit claim

In a recent determination, the Pension Funds Adjudicator, Muvhango Lukhaimane, commended the Mineworkers’ Provident Fund for its co-operation in investigating and paying a death benefit arising from a complaint that had been received outside the threeyear prescription period. However, she had some stern words for the fund for not doing more to settle the claim sooner.

In April this year, DO complained to the adjudicator’s office that the fund had failed to allocate and distribute a death benefit following the death of her husband on November 23, 2001. DO said she needed the money to support her children, aged 19 and 17. She said she had claimed the benefit in 2004, and it was almost 14 years since her husband had died.

The provident fund responded to the complaint by saying there were no records to prove that DO had lodged a claim before the expiry of the three-year prescription period permitted in terms of the Prescription Act, in order for her complaint to be investigated.

However, because the claim had the potential to succeed, the fund said it would not rely on prescription as a reason not to investigate and pay the death benefit, which amounted to R135 285.

The fund said that, on receiving the complaint, it carried out a detailed investigation and discovered that certain documents were outstanding and delaying the process of finalising the claim.

The fund also submitted that it required confirmation of whether or not the member had been supporting his mother financially at the time of his death.

In her determination, Lukhaimane says the fund’s decision to accommodate the claim after the three-year prescription period was “commendable”, because it helped to reduce the amount of unclaimed benefits held by retirement funds.

However, she says the provident fund’s board should have been aware of the death of one of the fund’s members, and, in terms of the Pension Funds Act, it had 12 months from the member’s death to identify the member’s dependants and allocate and pay the benefit. “Therefore, the board failed to investigate the matter in terms of section 37C of the Act,” she says.

She says that more than 14 years had passed without the fund completing its investigation, and it had failed to provide a satisfactory explanation for the delay.

“As a result of the respondent’s dilatory conduct, the deceased’s beneficiaries suffered prejudice in that they have potentially been denied access to benefits which may have become available to them had the investigation been completed,” the adjudicator says.

Lukhaimane ordered the fund to complete its investigation and proceed with the allocation and distribution of the death benefit.