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By Liesl Peyper

Moneyweb: Senior financial journalist

Life partner of businessman loses out on R21 million death benefit

The woman acknowledged that she had signed a cohabitation agreement with the deceased in February 2014.

Even if you qualify as someone’s legal dependant, it does not automatically give you the right to receive a portion of that person’s death benefit, the Pension Funds Adjudicator said in a ruling this week.

A woman who was the life partner of a businessman for 17 years laid a claim to a share of his death benefit, which totalled R21.3 million.

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She filed a complaint with the Pension Funds Adjudicator after the Old Mutual Superfund Provident Fund decided to pay the deceased’s death benefit to his two biological daughters and not her.

The Office of the Pension Funds Adjudicator is a statutory body that resolves complaints of abuse of power, maladministration, and disputes of fact or law regarding pension funds.

The case before the adjudicator revolved around the complainant’s aggrievement that she was excluded as a beneficiary from the death benefit.

However, she signed a cohabitation agreement years before, in which a waiver stated she could not claim a share of the deceased’s pension, deceased’s fund, investments, profit sharing, or other retirement interests.

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Upon the deceased’s death, the board of the provident fund allocated 50% of the death benefit to each of the deceased’s two daughters.

The complainant argued that the fund did not acknowledge her as a dependant of the deceased. She also asserted that his two daughters were fully independent and employed businesswomen who inherited significant business interests from the deceased.

Complainant not left destitute

The complainant was not left destitute: She received R7 million from various policies payable to her as a result of the deceased’s death.

In addition, she inherited immovable property valued at approximately R1.7 million, and the executor of the deceased’s estate pays her an estimated amount of R35 000 per month.

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The complainant said she had been in a romantic relationship with the deceased since 2007. During this period, he financially assisted her by paying her an allowance equal to the salary she had earned before a mutual agreement was reached that she would resign from her job to attend to the needs of the deceased and her child at home.

The woman acknowledged that she had signed a cohabitation agreement with the deceased in February 2014, but according to her, there were several issues.

One was that there were no witnesses when the agreement was signed. She argued that some of the terms of the agreement had not been explained to her, such as a clause in the agreement that waived her right to share in the partner’s pension, provident fund, investments, profit sharing, or other retirement interests.

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The woman submitted that she was no longer bound by the cohabitation agreement after the deceased’s passing, and as a result, she was entitled to any benefit that might arise from the deceased’s death.

Regarding the life policy payout of R7 million, she argued the amount would not cover all her living expenses and potential unforeseen costs.

She has not worked for 15 years, and she has an auto-immune disease that affects her daily functioning. That and the fact that she was so close to retirement would limit her ability to find employment.

The Old Mutual provident fund submitted in turn that the cohabitation agreement the deceased and his life partner had signed earlier clearly stated that he did not wish for her to receive a share of his death benefit.

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The fund also argued that even though the complainant is 52, she has a tertiary qualification and prior work experience, and that she therefore still has income-earning potential.

Life partners not ‘automatically entitled’ to death benefit

In her ruling, Pension Funds Adjudicator Muvhango Lukhaimane said the fund was correct in identifying the deceased’s two biological daughters as the beneficiaries of his death benefit.

She said permanent life partners indeed qualify as legal dependants; however, that does not mean such a person is automatically entitled to a portion of a deceased life partner’s death benefit

Lukhaimane further said the complainant should have been aware of the waivers in the cohabitation agreement and that she, therefore, could not claim the contents had not been explained to her.

She noted: “The terms of the cohabitation agreement clearly show that the parties agreed there would be no sharing of pension benefits.”

According to Lukhaimane, the provident fund board correctly allocated the deceased’s death benefit, and there is no reason to set aside the board’s decision. She dismissed the complaint.

This article was republished from Moneyweb. Read the original here

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