The distribution and payment of a death benefit in terms section 37C of the South African Pension Funds Act, 24 of 1956

Abstract

This paper discusses the distribution and payment of the death benefit in terms of section 37C of the Pension Funds Act. The distribution of benefits payable on the death of a member of a pension fund is regulated by section 37C of the Pension Funds Act. This section was introduced primarily to ensure that death benefits are paid in accordance with the object of the Act and government policy. The section provides that death benefits do not form part of the deceased's estate. Its purpose is to make sure that the dependents of the deceased member are not left destitute by the member's death. Accordingly, section 37C overrides the freedom of testation, and the board of management is not bound by the wishes of the deceased as expressed in the latter's nomination form. It is only one of the factors that need to be considered for the distribution and allocation of the death benefit.