IN PERSPECTIVE 3/2026
Supreme Court of Appeal case
Section 37C – Twelve-month requirement
South African Retirement Annuity Fund (Fund) v Pension Funds Adjudicator (Adjudicator)[1]
A member of the Fund died in 2019, without a nominated beneficiary and without leaving a will. His wife survived him but did not know the retirement annuity existed. It was only more than two years after the death that a broker informed her about it and helped her submit a claim to the Fund.
The Fund rejected her claim. It argued that because no dependant had been identified within twelve months of Mr Viljoen’s death, the benefit had to be paid to his estate. Mrs Viljoen complained to the Adjudicator, who ruled in her favour and ordered the Fund to investigate and identify the deceased’s beneficiaries before paying out the benefit. The Fund then challenged that decision all the way to the High Court and ultimately the Supreme Court of Appeal (SCA).
The Fund argued that if no dependant is identified within twelve months after a member’s death, the right to the benefit effectively falls away and the money can be paid into the estate. Under that interpretation, it had no obligation to investigate dependants once the twelve months had passed.
Mrs Viljoen argued that this interpretation defeated the whole purpose of section 37C, which is primarily to protect dependants. She contended that the Fund’s duty to investigate only becomes possible once it learns of the member’s death, and that the twelve-month period should not operate as an automatic cut-off.
The SCA firmly rejected the Fund’s interpretation and found that retirement fund death benefits are intended to serve a social protection function, ensuring that spouses, children, and other dependants are not left without support. The SCA held that the Fund has a legal duty to investigate and identify dependants before deciding where the benefit should be paid. The twelve-month period is not a rigid deadline that extinguishes rights.
The SCA described the Fund’s interpretation as leading to unfair and even absurd results. Many beneficiaries, particularly vulnerable people in rural areas or with limited financial knowledge, may have no idea that a retirement fund benefit exists. If the Fund’s arguments were accepted, such people could lose protection simply because they were unaware of the claim.
The appeal was accordingly dismissed. The Fund was required to investigate and identify the member’s beneficiaries and distribute the death benefit accordingly.
The Fund’s decision to appeal a decision despite a relatively small benefit was found to be insensitive and the Fund was ordered to pay the costs of the appeal.
Funds must actively investigate and trace beneficiaries before resorting to paying a benefit into an estate. Lapsing of the twelve-month period does not mean that a beneficiary’s right to be considered for allocation falls away.
This case serves to remind boards of funds that a thorough investigation must be done even if they only become aware of the death of the member after the 12-month period has expired.
Pension Funds Adjudicator case
Section 37C – Entitlement to a spouse’s pension does not mean entitlement to a portion of the lump sum death benefit
MH Chawana v Eskom Pension and Provident Fund (Fund)[2]
A member of the Fund died leaving a lump sum death benefit which the Fund allocated to his life partner and several children. His customary wife had posthumously obtained a registered marriage certificate, but received nothing from the lump sum benefit. She contended that she should share in the lump sum death benefit, especially since the Fund was paying a spouse’s pension to her following the member’s death.
The Fund contended that its investigation revealed that the deceased member and the customary wife had separated several years before his death. She had left the matrimonial home, they had been living apart since around 2021, divorce proceedings were underway, and the deceased had stopped supporting her financially, even removing her from his medical aid. Importantly, she herself acknowledged that after their separation, the deceased no longer maintained her personally and instead supported their child.
The Adjudicator drew a crucial distinction between a spouse’s pension under the Fund rules and a lump sum death benefit under section 37C. For the monthly spouse’s pension, the relevant question was whether the customary wife qualified as a surviving spouse in terms of the rules of the Fund. Once her marriage was recognised, she did qualify and as a result started receiving a spouse’s pension.
The distribution of the lump sum death benefit works differently. The Fund had to decide who was financially dependent on the deceased and how to distribute the money equitably among all dependants. Financial dependency was therefore a major consideration.
The Fund concluded that the customary wife was employed, had been living separately from the deceased for years, received no maintenance from the deceased, and was not financially dependent on him when he died. Meanwhile, the deceased member’s life partner, minor children and unemployed adult children were shown to be financially dependent on the deceased to varying degrees.
The Adjudicator found no fault with the Fund’s decision to allocate the entire lump sum benefit to those dependants and not to the customary wife and dismissed the complaint.
Retirement fund death benefits are not distributed according to marital status alone. Even a lawful spouse can receive 0% of a death benefit where the evidence shows that the deceased was no longer supporting that spouse financially, while other dependants have a greater need for support.
Entitlement to a spouse’s pension does not equal entitlement to share in a lump sum death benefit.
Financial Services Tribunal case
Prescription
Lowveld Securicon Consultants (Employer) v SA Retirement Annuity Fund (Fund), the Pension Funds Adjudicator (Adjudicator), and Aaron Samson Mashaba (Member)[3]
The Member worked for the Employer from 2008 until 2023. Throughout his employment, contributions to the Fund were deducted from his salary and indicated as such on his payslips. However, when he left employment, he received a withdrawal benefit of only R10 553. The Fund informed him that the Employer owed more than R75 000 in outstanding contributions that should have been paid on his behalf.
The Member lodged a complaint with the Adjudicator, who ruled that the employer should pay the outstanding contributions. The Employer did not dispute that deductions had been made from the Member’s salary and that contributions remained unpaid. Instead, it argued that payment of most of the amounts about which the Member complained had prescribed and that the Adjudicator should only have considered a few recent missing contributions.
The Tribunal sided with the Adjudicator and pointed out that the Member’s payslips showed that contributions were being deducted and gave every appearance that they were being paid to the Fund. There was no reason for him to suspect otherwise. Employees cannot be expected to assume that their employer is issuing misleading payslips or effectively stealing their retirement contributions. Employees are entitled to trust that deductions reflected on their payslips are actually being paid over.
Although prescription is jurisdictional and cannot be condoned by the Adjudicator[4], the Tribunal found that because the Member had no knowledge that the contributions were not being paid, the prescription period only started running when he discovered the problem, not when the deductions were originally made.
If an employer deducts fund contributions from an employee’s salary and makes it appear that everything is in order, the employer cannot later argue that the employee should have discovered the fraud years earlier.
Supreme Court of Appeal (SCA) case
Regulatory investigations
Financial Sector Conduct Authority (FSCA) and Others v Municipal Employees’ Pension Fund (MEPF) and Others[5]
The FSCA suspected that the MEPF may have been contravening financial sector laws and launched an investigation. As part of that investigation, the FSCA obtained a search and seizure warrant from a judge and executed searches at the MEPF’s premises, seizing documents and information. The MEPF reacted by launching court proceedings, seeking the search warrant to be set aside and to review the FSCA’s decision to investigate.
The MEPF demanded the full Rule 53 record. This refers to Rule 53 of the Uniform Rules of Court, the purpose of which is to allow a person challenging a decision to obtain the record of the decision-making process before fully formulating their case. The MEPF argued that once a review is launched under Rule 53, the decision-maker must provide the record. It said the FSCA’s actions had serious consequences, including reputational harm, legal costs, and interference with its rights.
The FSCA refused to provide the record and argued that a decision to investigate is not a final decision, it does not determine anyone’s guilt, does not directly affect legal rights, and is therefore not administrative action and not reviewable.
The High Court sided with the MEPF. It held that because a review application had been launched, the MEPF was entitled to the record, and questions about whether the decision was ultimately reviewable could wait for another day.
The SCA overturned that decision and held that decisions to investigate are generally investigative, not administrative. They do not determine rights and therefore are usually not reviewable. In other words, the MEPF could not demand a regulator’s investigative record simply by filing a review application. It must first show that there is a reviewable decision.
The SCA held that regulatory investigations are generally not reviewable merely because they are inconvenient, costly, or embarrassing for an entity. Before an entity can compel disclosure of an investigative record, it must first show that the decision being attacked is one that the courts are capable of reviewing.
For retirement funds, this means that the FSCA may execute searches at fund premises, seizing documents and information, without having to provide a Rule 53 record.
High Court case
Section 37D – Interdict to withhold payment
Spar Group Limited (Employer) v Old Mutual Superfund Provident Fund (Fund)[6]
The member was a senior buyer at the Employer responsible for sourcing products and negotiating supplier arrangements. The Employer alleged that instead of buying directly from a certain manufacturer, he arranged for products to be channelled through a middleman, which added a mark-up of about 25% before selling the products to the Employer. The member’s son worked for the middleman, from which the member received money. None of this had been disclosed to the Employer, who alleges that it paid R8.2 million extra because of the middleman arrangement.
At his disciplinary hearing, the member did not challenge most of the evidence and acknowledged breaching the Employer’s ethics policies. He repeatedly expressed regret and accepted that the company was entitled to take action against him. He was dismissed for dishonesty, abuse of position, conflicts of interest and related misconduct. The Employer then sued him for damages.
The Employer requested the Fund to withhold the member’s retirement benefit under section 37D while the damages action proceeded. Instead of agreeing, the Fund repeatedly required more documents, demanded additional detail about the Employer’s damages calculations, and even insisted that the Employer amend its particulars of claim before it would consider withholding the money. Eventually the Fund informed the Employer that unless it obtained a court interdict immediately, the benefit would be released to the member. That ultimatum triggered the urgent court application.
The Court criticised the Fund, saying it followed a “blinkered, box-ticking approach” and failed to properly apply its mind to the Employer’s claim. It should have been obvious from the Employer’s pleadings that the allegations involved dishonesty. The Fund’s insistence on amendments and further quantification was viewed as excessive and unreasonable.
On the other hand, although the member accepted that action would be taken against him, he alleged that the Employer had not proved dishonesty, damages was overstated, and he desperately needed the pension money because he was unemployed and needed to fund his legal defence.
The Court found that
- the disciplinary hearing contained significant admissions;
- the evidence pointed strongly towards dishonest conduct;
- The Employer had established a strong prima facie case; and
- if the money was paid out, the Employer risked obtaining a hollow judgment because the funds would likely be spent before trial.
The Court granted the interim interdict preventing the Fund from paying any of the member’s benefits until the Employer’s damages action is finally decided. The member was ordered to pay the costs of opposing the application.
In this case, the Court sends a strong message to retirement funds that withholding requests under section 37D must be considered sensibly and pragmatically. Funds are expected to assess whether a prima facie case exists, not demand trial-level proof before exercising their discretion.
[1] Case no 1163/2024
[2] PFA/LP/00132068/2025/YVT
[3] Case no. PFA93/2025
[4] See Simeka’s In Perspective 3 of 2026, Mbasa case
[5] (1344/2023) [2026] ZASCA 66
[6] Case no 2025-180517 [2025] ZAWCHC