Kaplan and Another NNO v Professional and Executive Retirement Fund and Others

The late Arthur Ralph Kaplan was a member of two pension funds managed by Liberty Life Association of Africa Ltd. In terms of the rules of both funds, he validly nominated his two minor sons as beneficiaries of the death benefits. He also created separate trusts for the benefit of each son. Upon his death in July 1990, he was survived by three dependants: his two sons and his widow (who was not the mother of the children). Despite the valid nominations, Liberty Life allocated the pension benefits among all three dependants, relying on section 37C of the Pension Funds Act 24 of 1956. The trustees of the two trusts applied to the Johannesburg High Court for an order declaring that the benefits were payable exclusively to the trusts, to the exclusion of the widow. The High Court dismissed the application, holding that the allocation complied with section 37C. The trustees appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs. The Court declined to award the costs of two counsel.

This case is a leading authority on the interpretation and application of section 37C of the Pension Funds Act. It confirms that statutory provisions governing the distribution of pension death benefits override beneficiary nominations and fund rules, and that the protection and equitable treatment of dependants take precedence over the deceased member’s expressed wishes. The judgment reinforces the social-security purpose of pension funds in South African law.