A recent dispute over a R8.3 million pension fund death benefit reveals the complexities of recognising permanent life partnerships under South African law, as the Pension Funds Adjudicator weighs the claims of a deceased member's sister against those of his long-term partner.
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Before the Pension Funds Adjudicator, a dispute over an R8.3 million pension fund death benefit has highlighted the complexities of recognising permanent life partnerships under South African pension law and the wide discretion afforded to pension fund trustees when distributing death benefits.
The matter arose after a member of the Corporate Selection Umbrella Retirement Fund died in May 2024, leaving a death benefit of R8 330 764.70. What followed was a bitter dispute between the deceased's sister and a woman identified only as "M", whom the fund recognised as his permanent life partner.
At the heart of the case was whether "M" qualified as a legal dependant under section 37C of the Pension Funds Act, and whether the trustees had fairly exercised their discretion when allocating the benefit.
The fund allocated the death benefit as follows:
45% to the deceased's sister;
45% to "M";
5% to the deceased's niece; and
5% to his nephew.
The deceased's sister, together with her two children, challenged the allocation. They argued that the deceased had nominated his sister as the sole beneficiary of the pension benefit in 2005 and maintained that "M" did not qualify as a permanent life partner.
The complainants also alleged that the trustees had failed to provide adequate reasons for their decision, had not disclosed all the evidence relied upon, and had failed to properly evaluate conflicting versions presented during the investigation.
According to the complainants, "M" was merely a friend or colleague of the deceased rather than his romantic partner.
Among their arguments were:
The deceased maintained his own residence and there was no shared household.
There were no joint bank accounts, shared expenses or evidence of financial interdependence.
The deceased never referred to "M" as his spouse or partner, did not nominate her as a beneficiary and made no provision for her in his will.
They further argued that WhatsApp conversations between the pair demonstrated communication but not an intimate relationship, while claiming that "M's" version was unsupported by independent evidence.
The retirement fund presented a markedly different account of the relationship.
It submitted that the deceased and "M" had been involved in a relationship for approximately 20 years and had lived together in the deceased's Sandton home from July 2023 until his death. Before that, the couple allegedly alternated between his residence and "M's" home in Rivonia.
Witnesses described them as living together in a committed romantic relationship.
The fund also submitted that the deceased had assumed a paternal role towards "M's" son and provided ongoing financial support averaging about R15 000 a month.
According to the evidence before the trustees, the deceased paid for groceries, domestic services, veterinary expenses, Netflix subscriptions, fibre internet and holidays. He also allegedly covered expenses for both "M's" son and her mother.
The fund further pointed to evidence that the deceased's employer referred to "M" as his life partner, while the Rabbi who officiated at his funeral did the same.
Although the deceased had nominated his sister as the sole beneficiary in 2005, the fund noted that this nomination was not decisive under section 37C of the Pension Funds Act.
The sister was also the executrix and sole heir of the deceased's estate, valued at approximately R5.8 million.
The fund accepted that she was financially dependent on her brother. It found that he had contributed about R12 000 per month towards her groceries and medication and had also paid for her children's vehicles, holidays and other expenses.
However, the trustees noted that the sister had also benefited substantially from the deceased's estate, the sale of the family home and risk policy proceeds.
While recognising her as a factual dependant, the fund concluded that "M" qualified as a legal dependant because the definition of "spouse" in pension legislation extends to permanent life partners.
The complainants also attacked the process followed by the trustees.
They argued that the fund had breached the constitutional principle of audi alteram partem — the right of affected parties to be heard.
According to the complaint, important evidence relied upon by the trustees, including allegations relating to property ownership and financial support, had never been disclosed to them.
They further argued that affidavits from neutral witnesses were overlooked while greater weight was given to statements from "M's" family members.
The complainants also questioned why the preliminary allocation, which initially awarded "M" 65% of the benefit, was later reduced to 45%, with the niece and nephew each receiving 5%.
They argued that the trustees failed to adequately explain this revised allocation and instead attempted to justify the decision after the fact.
"M" rejected the allegations against her.
She maintained that she and the deceased had shared a relationship spanning approximately 25 years, characterised by mutual support, shared living arrangements and joint retirement planning.
She also claimed that she had made personal sacrifices during the relationship, including changing jobs at the deceased's request, and denied that her claim was motivated by financial gain.
Instead, she insisted that she satisfied all the requirements of a permanent life partner under South African law.
In determining the dispute, Pension Funds Adjudicator Lebogang Mogashoa considered whether the trustees had properly exercised their discretion under section 37C of the Pension Funds Act and whether the allocation was equitable.
The adjudicator distinguished between the various categories of dependants.
"M" was regarded as a legal dependant as the deceased's permanent life partner.
The sister was recognised as a factual dependant and the nominated beneficiary.
The niece and nephew were treated as ad hoc dependants because they had received occasional financial support from the deceased.
The adjudicator reiterated that the deceased's 2005 beneficiary nomination remained relevant but was not binding.
Section 37C requires trustees to distribute death benefits equitably among dependants regardless of the contents of a nomination form or a will.
One of the central issues was whether "M" could qualify as a permanent life partner despite allegations that she and the deceased had maintained separate residences.
The adjudicator rejected the complainants' argument.
"The complainants contend that 'M' cannot be recognised as the deceased's permanent life partner, relying principally on the fact that the parties maintained separate residences," he said.
"This argument is misplaced. Cohabitation, while relevant, is not decisive.
"Our law recognises that many marriages, unions, and permanent life partnerships in South Africa do not involve continuous co-residence, often due to economic, employment, or personal circumstances. Such arrangements do not, without more, negate the existence of a permanent life partnership.
"What is required is proof of a permanent conjugal relationship, coupled with steps evidencing an intention to share their lives together. Such steps may include plans to formalise the relationship through marriage or civil union," he said.
The adjudicator further noted that Constitutional Court jurisprudence requires decision-makers to consider numerous factors when assessing whether a permanent life partnership exists.
These include the duration of the relationship, shared living arrangements, financial support, the perception of family and friends, pension and related benefits, and whether the couple publicly presented themselves as partners.
No single factor is decisive.
"The law thus rejects rigid or formalistic requirements. Continuous cohabitation is not essential, nor is the existence of joint financial accounts. Financial dependency may be established through indirect forms of support. The inquiry is fact-specific and must be resolved on the probabilities," he said.
The adjudicator found that the evidence before the trustees was sharply divided.
On the one hand, the complainants relied on the absence of joint financial accounts, separate residences and statements from acquaintances denying any romantic relationship.
On the other, the trustees had considered evidence that included a relationship spanning two decades, periods of cohabitation, affidavits from colleagues, domestic workers and family members describing a committed relationship, evidence of ongoing financial support, shared holidays and long-term plans consistent with a spousal relationship.
Faced with these competing versions, the trustees were required to assess the credibility of the evidence and determine where the probabilities lay.
The adjudicator concluded that the trustees' finding that "M" qualified as a permanent life partner was supported by multiple corroborating sources rather than a single unsubstantiated allegation.
He further found that the trustees had properly investigated the matter, considered the competing submissions and exercised their discretion within the framework of section 37C.
The complaint was dismissed, and the fund's allocation of the R8.3 million death benefit was upheld.
PERSONAL FINANCE