Alexforbes has moved to clarify the law governing former Deputy President David Mabuza’s pension benefits, after the Mpumalanga High Court ordered a temporary halt to payments linked to his R44.7-million retirement savings.
As reported by Central News, on 30 September, the High Court ordered Alexforbes to halt payments from the annuity pending clarification of policy documents and the tracing of all of Mabuza’s heirs. The order stopped an imminent payout to Mabuza’s widow, Nonhlahla Mnisi, after his daughter, Tamara Silinda, argued that rushing the distribution risked excluding siblings from their rightful claims.
The order, handed down by Judge Johannes Roelofse, was granted following an urgent application by Tamara Silinda, supported by her mother, Emunah Silinda.
The Silindas contended that inconsistencies in beneficiary documents required clarification before any disbursement could proceed. The court agreed, interdicting Alexforbes and emphasising the need for a fair process that protects unlocated children and allows space for forensic audits if necessary. The court emphasised the need for clarity in policy documents and for all potential heirs to be identified.
The Alexforbes group said it respected the judgment but emphasised it had acted strictly within the law.
“While we respect the judgement, Alexforbes is currently reviewing our legal options in response, especially the unjustified cost order against us, considering that Alexforbes had complied fully and timeously with the court’s directions,” the group said.
The company emphasised the importance of clarifying the legal framework that governs the matter.
“As a principle and policy, Alexforbes seeks to avoid publicly disclosing client information, but given the public interest in this matter and the High Court order, it is necessary to share the following facts,” it noted.
According to Alexforbes, on retiring in early 2023, the late Mabuza elected not to retain his pension benefit in the Political Office-Bearers Pension Fund.
Instead, “in terms of the fund rules, he chose to transfer the full value of his pension to purchase a living annuity from a registered insurer – specifically a living annuity product from Alexforbes.”
Here, the group emphasised a crucial legal distinction.
“A living annuity is not a retirement fund and is not governed by section 37C of the Pension Funds Act. Whilst retirement fund death benefits are distributed in accordance with section 37C at the discretion of fund trustees to identified dependants and nominees, this does not apply to a living annuity.
“A living annuity is an insurance product, regulated by the Long-term Insurance Act and the Income Tax Act, where the policyholder’s nominated beneficiaries receive the remaining capital portion of the investment upon death. In law, the insurer must pay the nominated beneficiaries, and there is no discretion to depart from this. Any departure would have significant legal consequences.”
Alexforbes added: “Our role as administrator is to act within the legal framework. We remain committed to engaging transparently, upholding the law as it stands, and providing certainty to our clients and their families during what is often a difficult and sensitive time.”
The suspension, according to Central News, not only protects possible claims but also allows space for further investigation if required, ensuring transparency in handling the former Deputy President’s benefits.
Estate tensions
The ruling adds a new dimension to the disputes surrounding Mabuza’s estate. Known as “The Cat” for his political survival skills, Mabuza served as Deputy President from 2018 to 2023 and remained a significant ANC figure until his death earlier this year. His retirement benefit, now frozen by the court, has become a focal point of tensions between his widow and his children from different relationships.
For now, the court’s intervention ensures that the annuity remains intact while the family dispute plays out – but Alexforbes’s response underscores that the case is as much about the dividing line between retirement law and insurance law as it is about inheritance.
Good for you Alex Forbes. This is astounding that they are being blamed for this shambles. Why did this need to get into the public space? Utterly ridiculous
There is a distinction between an In-Fund Annuity and an Out-of-Fund Annuity. The former is governed by the Fund rules & PFA, while the latter is governed by the Long-term Insurance Act.
This means In-Fund Annuities are subject to section 37c of the PFA and the discretion of the Fund trustees to ensure priority of financial dependency over legal dependency.
AlexForbes says he left the Fund at retirement, but not clear if the annuity pension was purchased in or out ofthe Fund.