Cohabitation: A nightmare on the allocation and distribution of death benefits in terms of section 37C of the South African pension funds Act 24 of 1956

Abstract

The South African pension funds benefi ts are part of social security, as stipulated in Section 27 of the Constitution, an initiative that is a mechanism that enables people to escape destitution. The criterion for entitlement of death benefi ts in terms of Section 37C of the Pension Funds Act is dependency. The primary purpose of Section 37C is to protect those who were fi nancially dependent on the deceased during his lifetime. In effect, Section 37C overrides the freedom of testation of the deceased. The Act protects cohabitees who might have spent their entire life together so that in case of death of one of them the other one can share on the death benefi t provided by the fund on the condition that they were depending on each other for maintenance. Pensions (2012) 17, 153 -157.

The Politics of Cohabitation in South Africa: Exploring Who Qualifies for Pension Benefits Under Section 37C of the Pension Funds Act, 24 of 1956

“…What the Act does not prescribe however, are the factors to be taken into account in exercising that discretion. The import of this is that the trustees are given an unfettered discretion to determine which dependant will share in the benefit, to the point of granting a nil benefit to other dependents (Nevondwe and Rapatsa, 2012). The rider is, of course, always that the board must exercise its discretion properly by considering relevant factors and ignoring irrelevant ones.…”

“…However, it is pertinent to point out that Nevondwe and Rapatsa (2012) has expressed the view that "the content of a cohabitative relationship can be distinguished from marriage only by the fact that the couple is not legally married to each other." The term does not include non-sexual relationships (for example, a brother and sister living together), relationships where the couple have only occasional sexual intercourse with no intention of establishing a family unit or relationships where more than two partners live together (Crowe and Ridley, 2008).…”

“…The term does not include non-sexual relationships (for example, a brother and sister living together), relationships where the couple have only occasional sexual intercourse with no intention of establishing a family unit or relationships where more than two partners live together (Crowe and Ridley, 2008). According to Nevondwe and Rapatsa (2012) "Although the requirements set for cohabitation differ in different legal systems and the different statutes within the legal systems, three elements seem essential for the creation of a factual cohabitative relationship, namely a sexual relationship between the couple, a factual cohabitative relationship and a measure of durability and stability of the relationship. A further element, namely a sense of responsibility for each other, is emphasized in some instances to prove the existence of a cohabitative relationship."…”

“…Cohabitation is, therefore, not a recognised legal relationship (Nevondwe and Rapatsa, 2012). The fact of cohabitation does, however, have certain legal consequences (Chambers, 1996) and certain legislation defines spouse so as to include a partner in a cohabitative relationship-(Insolvency Act 24 of 1936, Compensation for Occupational Injuries and Diseases Act 130 of 1993 and Domestic Violence Act 116 of 1998).…”

Assessment of the Effectiveness of Death Benefit Payment Policy in Lagos State Pension Commission

“…The pension law is to provide benefits to members of retirement funds when they retire from active employment upon reaching retirement age. The reality is that employee may die before he/she retires, in which case the pension fund must pay benefit to the members of dependents and nominees (Nevondwe, 2012) Death benefit management ensures economic security and opportunity that progress over the course of history in response to changing economic, political conditions and demographic realities (Brzeska, Das & Fan, 2015). Therefore, it serves as a statutory limitation to freedom of in-testate in terms of the law of succession to protect those who were financially dependent on the deceased during his life time (Matsemela, 2016).…”