Earlier this week, the third annual Money Smart Week in South Africa concluded in the country. The initiative aims to provide ordinary South Africans with free quality financial information.
Financial education is key to understanding what will be done with your money if you die. Every month when individuals contribute to pension funds, a small levy will be allocated to the Pension Funds Adjudicator (PFA).
The PFA investigates complaints from pension fund contributors for a wide range of issues, including not receiving your pension benefits and the failure of employers to pay your pension contributions.
Pension fund contributors will not require legal representation to approach the office of the PFA with a complaint. This is because the PFA has the authority to issue an order that is akin to an order of the High Court.
The PFA’s Muvhango Lukhaimane explains that they deal with how your pension is distributed when you die. They also have the power to determine the percentage allocation your dependents will receive after they have died.
Lukhaimane added, “You can have a nomination form but that nomination form is just an indication to the board to say this is my wish, but the board is not bound by that.”
They added that pension benefits are also protected from matrimonial property regimes. This means a pension will be given to the individuals who were dependent on you and not necessarily your spouse.
The PFA will consider the maintenance of individuals who are left behind, the age of beneficiaries, how much money is available for distribution and the relationship a person had with the pension fund contributor who is now deceased.
“People look at that [pension] as if it is part of their inheritance but it is not. It remains to serve a social purpose that is why when you pass away, first it has to take care of the people that will be left destitute and start suffering because their basic needs now are not being satisfied because you as the member passed away,” explained Luhaimane.
Contributors can also approach the PFA if it is found that their employers did not pay contributions or the contributions of their members to pension funds on time. This issue becomes apparent when individuals want to access their pension contributions but are unable to do so.
Another common complaint handled by the PFA relates to delays in the payment of benefit withdrawals. Early withdrawals usually occur when employees leave their place of employment and require their pension funds to sustain them.
