Death and dependency: The meaning of 'Dependent' under Section 37C of the Pension Funds Act 24 of 1956
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2009
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South African Law Journal
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University of Cape Town
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Faculty
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In a recent decision on the disposition of pension benefits in terms of s 37C of the Pensions Funds Act 24 of 1956 ('the Act'), the present Pension Funds Adjudicator, Mamodupi Mohlala, determined that cohabiting life partners who are financially inter-dependent on each other at the time of one partner's (the deceased's) death, automatically qualify to be treated as factual dependents of the deceased, and as such are entitled to be considered amongst the potential pool of beneficiaries when the trustees decide on an equitable distribution of the deceased's death benefits. The decision in point was that of Hlathi v University of Fort Hare Retirement Fund (PFA/EC/9015/2006), handed down on 18 March 2009. In reaching this decision the Adjudicator broke with the test for factual dependence of cohabitees established by her predecessor, Vuyani Ngalwana, in 2005 in Van der Merwe v Central Retirement Annuity Fund (PFA/EC/1566/02/KM). The approach adopted in Hlathi (supra) appears to have found favour with commentators in the industry (see for example Alexander Forbes Legal Department 'The legal status of cohabitees' in On the Scales, Alexander Forbes legal update (May 2009) in which it is stated that 'trustees will take comfort from this case, which recognises that interdependency is sufficient for the purposes of proving financial dependency between couples'), and accords with the previously expressed view of scholars, who would appear to be of the view that the present approach is to be preferred on both the law and on the equities (see for example Mtendekwa Owen Mhango 'An examination of the accurate application of the dependency test under the Pension Funds Act 24 of 1956' (2008) 20 SA Mercantile LJ 126). I would respectfully disagree, both with the adjudicator's decision and with the support it appears to have garnered in the industry.
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Lehmann, K. (2009). Death and dependency: the meaning of'dependent'under section 37C of the Pension Funds Act 24 of 1956: notes. South African Law Journal, 126(4), 650-666.