LEGAL NOTE: December 2025 | OPFA COMMUNICATION 2 OF 2025

Death Benefits – Clarification on Jurisdiction by the Office of the Pension Funds Adjudicator

Section 37C of the Pension Funds Act, 1956 affords the fund a wide discretion to decide on the equitable distribution of a death benefit. In exercising its discretion, the fund is required to inter alia ensure that its decision is supported by a proper investigation of all the relevant facts, all of which must be considered.

Where a fund fails to exercise its discretion properly, the Adjudicator may set aside its decision and direct a reinvestigation or reconsideration. Such orders are binding, and the original fund decision becomes void.

In rare cases, where all the relevant facts have been placed before the Adjudicator and the proper distribution is a foregone conclusion, the Adjudicator may substitute the fund’s decision with a new distribution (see Swart N.O (neé Van der Merwe) and others v Lukhaimane N.O and others [2021] JOL 49952 (GP) at paragraph [44]). However, this is exceptional, and the fund’s discretion is generally respected.

When a death benefit allocation is remitted to the fund by the Adjudicator, it is expected that, barring any section 30P or reconsideration application, the fund must take earnest steps to implement the order. The fund must act promptly, supplement its investigation where necessary, and issue a new decision. It can no longer rely on the original decision and must communicate the revised decision to beneficiaries.

The fund’s new decision may justifiably mirror the original decision, save that the fund would have arrived at the new decision having had the benefit of considering new factors including those brought to light in the Adjudicator’s determination.

Importantly, any person aggrieved by the fund’s new decision has the right to lodge a new complaint with the Adjudicator. In this regard, the Adjudicator’s jurisdiction is neither ousted by the doctrine of functus officio nor the principles relating to res judicata. The new complaint will be based on the new decision and the Adjudicator’s investigation and determination of the complaint will relate to the fund’s new decision (see Momentum Retirement Annuity Fund v LH Botha and Others – PFA47/2021, Financial Services Tribunal at page 4, paragraph [3]).

Publication issued by N Essop, Deputy Pension Funds Adjudicator on 24 October 2025.

Important OPFA cases over the past year

The OPFA highlighted several important determinations issued over the past 12 months, in their Pension Funds Adjudicator’s Intergrated Annual Report illustrating its approach to such matters:

M Mpambani v Municipal Gratuity Fund and Another

The complainant’s withdrawal benefit was paid to the wrong person while he was incarcerated. The fund failed to exercise due diligence and did not verify the complainant’s status before processing the claim.

The OPFA determined that:

• The fund acted recklessly and failed in its fiduciary duties.

• The fund was ordered to reinstate the complainant’s fund credit with investment returns.

• The fund must pursue legal action against the fraudster.

MG Marara v Private Security Sector Provident Fund

The employer deducted provident fund contributions but failed to pay them to the fund, resulting in arrears and delayed payment to the complainant.

Key Points:

• The employer was ordered to pay outstanding contributions and late payment interest.

• The fund was instructed to accept the claim form without the employer’s signature and pay the complainant’s fund credit.

HM Shaw v ABSA Pension Fund

The complainant sought to commute a further lump sum from his retirement benefit after retirement, citing financial hardship.

The OPFA held that:

• Further commutation after retirement is not permitted under the rules of the fund and legislation.

• The complaint was dismissed as the member had already made an election at retirement.

B Kotana v Old Mutual Superfund Unclaimed Benefit Preservation Pension Fund

The complainant, as executrix, disputed the fund’s refusal to pay a death benefit to nominated beneficiaries in Zimbabwe.

Key Points:

• The fund was correct to pay the benefit into the estate or an unclaimed benefit fund when beneficiaries could not be traced.

• The executrix was ordered to provide the necessary documentation for payment.

This publication is provided as general information only. It is not advice and should not be relied upon without a discussion regarding your own facts and circumstances. OPTIMUM EMPLOYEE BENEFITS (PTY) LTD | FSP 51031 | An Authorised Financial Services Provider | optimumgroup.co.za