Section 37C prescribes the manner in which death benefits are to be disposed of by the trustees of a fund. In short, dependants are to be considered first, if there are any. Next to be considered are nominees, if there are any.

If the deceased fund member did not leave any dependants but nominated persons to be awarded a portion of the death benefit as specified in writing to the fund, the benefit or such portion of the benefit shall be paid to such nominee: Provided that where the aggregate amount of the debts in the estate of the member exceeds the aggregate amount of the assets in his estate, so much of the benefit as is equal to the difference between such aggregate amount of debts and such aggregate amount of assets shall be paid into the estate.

If there are neither dependants nor nominees, the benefit is to be paid into the estate of the nominee for disposition to the heirs in accordance with the testament of the deceased. If the deceased did not leave a testament the benefit is to be paid into the Guardians Fund to be disposed of in terms of the Intestate Succession Ordinance 1946.

Therefore, except for the circumstances set out in section37C, as presented above, the law of intestate succession bears no relevance to the distribution of a death benefit of a pension fund member. Only once a benefit is paid into the estate or into the Guardians fund, as prescribed by section 37C, the Master of the High Court will oversee that the benefit is paid to the heirs in terms of the deceased member’s testament or is disposed of in terms of the Intestate Succession Ordinance in the event of the member not having left a testament.

Trustees of a fund therefore do not need to concern themselves with the fate of a death benefit once it has been paid into the estate or into the Guardians Fund as prescribed by section 37C of the Pension Funds Act. A different set of rules will apply from there on.

Important notice and disclaimer
This article summarises the understanding, observation and notes of the author and lays no claim on accuracy, correctness or completeness. Retirement Fund Solutions Namibia (Pty) Ltd does not accept any liability for the content of this contribution and no decision should be taken on the basis of the information contained herein before having confirmed the detail with the relevant party. Any views expressed herein are those of the author and not necessarily those of Retirement Fund Solutions.