The Pension Funds Adjudicator has set aside a death-benefit allocation after finding that a retirement fund failed to investigate properly a claim by an alleged cohabiting partner of a deceased member.
The fund accepted the woman as a factual dependant and allocated her 10% of the benefit, relying on her affidavit and an affidavit from the deceased’s landlord and friend, which the fund said corroborated her claims that she had lived with the deceased and was financially dependent on him. But after the woman was joined to the proceedings, she admitted that she had never met him.
Family disputes allocation and payments
In his determination dated 23 April 2026, Pension Funds Adjudicator Lebogang Mogashoa recorded that the deceased had been a member of the BECSA Provident Fund through his employment with Seriti Power. He died on 29 August 2022.
According to the determination, R2 069 241.89 was available for allocation after tax and the inclusion of interest. It records that the fund allocated 30% each to the deceased’s mother, father and sister, and 10% to Zanele Anna Zondo, whom it identified as his girlfriend.
The fund allocated 30% each to the deceased’s mother, father, and sister, and 10% to Zondo.
The deceased’s mother, AT Makgopa, challenged the allocation. She said the family did not know of any cohabiting partner and complained that the fund had not disclosed the woman’s identity or the evidence supporting its decision.
Makgopa offered to provide witnesses, including people who had lived with her son and his close friends, to refute the claim that he had cohabited with Zondo.
She also disputed the amount initially paid to the family. According to her submissions, the deceased’s parents and sister each received R512 399.19 on 3 November 2023. Makgopa said that, after the South African Revenue Service deducted R709 121.03 in tax, R1 948 159.63 remained for distribution. On her calculation, this should have resulted in each of the three family beneficiaries receiving R649 386.54.
After the family questioned the calculation and contacted SARS, the fund made an additional payment of R325 180.14, comprising R108 393.38 for each of the three family beneficiaries. Makgopa nevertheless maintained at that stage that R85 841.28 remained outstanding.
Fund defends its allocation
The fund defended its decision to recognise Zondo as a factual dependant.
The fund said it had conducted an investigation to identify the deceased’s dependants and determine an equitable distribution of the benefit.
It said Zondo’s affidavit stated she had been in a relationship with the deceased, had lived with him, and had depended on him financially because she was unemployed.
The fund also produced an affidavit from Eddie Letsau, whom it described as the deceased’s landlord and friend. According to the fund’s account of Letsau’s affidavit, Zondo had lived with the deceased, depended on him financially, and fulfilled the role of a stay-at-home partner.
The fund questioned Makgopa’s ability to dispute the alleged relationship. It pointed out that she lived in North West, whereas her son had lived in Middelburg in Mpumalanga and submitted that she might not have had direct knowledge of his domestic arrangements.
It maintained that the board had considered all relevant factors, applied its mind in a balanced and fair manner, and distributed the full benefit in accordance with its resolution.
Zondo repudiates her affidavit
The position changed after the Adjudicator joined Zondo to the proceedings and invited her to respond.
She said a friend had approached her in 2022 and offered to help her obtain money to clear her debts. According to Zondo, the friend told her there was a sick man in hospital, and she must sign an affidavit stating she was his girlfriend and they had lived together with her children.
She admitted that she had never met or seen the deceased, had never been his girlfriend, and had never lived with him.
Zondo said the friend took the affidavit, a copy of her Identity Document, and a bank statement. She said she did not know that the documents would be submitted to the fund and had been told that the deceased was in hospital, rather than that he had died. She also alleged that her friend had asked her not to answer calls from the Adjudicator.
She told the Adjudicator that she did not want the deceased’s money, had received no proceeds from the benefit, and feared that she might be implicated in fraud.
After receiving Zondo’s response, Makgopa submitted that the 10% allocated to her should instead be paid to the family. She said the fund still owed the family R206 924.18.
The fund subsequently said the matter had an element of fraud and criminality, and it would refer the case to its internal audit department.
It later lodged a professional indemnity insurance claim and told the Adjudicator that its insurer required a determination before it could process the claim further.
Fund failed to verify affidavits
The Adjudicator said the board of trustees was responsible for properly investigating the beneficiaries before deciding how the death benefit should be distributed.
Mogashoa found that the fund had accepted Zondo as a dependant merely by relying on the affidavits, without taking adequate steps to verify the information they contained.
He warned against relying on affidavits without using other reasonable methods to verify and authenticate the allegations.
“The Adjudicator is satisfied that the board failed to properly investigate the matter. Thus, the fund must be held accountable for its failure to ensure that the deceased’s benefit is paid to the correct beneficiaries,” Mogashoa said.
He added that it was for the fund to decide how to recover any money erroneously paid to Zondo. However, the correct beneficiaries could not be made to wait while the fund pursued recovery through its insurer.
Allocation set aside
Mogashoa set aside the board’s distribution decision and ordered the fund to conduct a fresh investigation to identify the deceased’s beneficiaries, taking account of the findings in the determination.
The fund must complete the investigation within eight weeks of the determination and allocate and distribute the death benefit within two weeks after completing it.
The order also directs the fund to add interest at 10.25% a year, calculated from 7 May 2024 until the date of payment, to the amount it describes as having been erroneously paid to Zondo. That amount must be distributed together with the death benefit in accordance with the new allocation.
Within one week of making payment, the fund must provide the beneficiaries with the board’s resolution and a breakdown of the payment and distribution of the death benefit.
