South African Retirement Annuity Fund v Pension Funds Adjudicator and Another

Mr Marius Viljoen, a member of the South African Retirement Annuity Fund (the Fund), died on 26 December 2019. He had not nominated a beneficiary and died intestate. As the value of his estate was below the statutory limit, no executor was appointed. He was survived by his wife, Mrs Sophia Viljoen, who relied on a state old-age grant and was unaware of the retirement annuity benefit. A broker brought the benefit to her attention, and she submitted a claim on 28 March 2022—approximately two years and three months after Mr Viljoen’s death. The Fund repudiated the claim and, on 18 July 2022, resolved to pay the R52 120.53 death benefit into the deceased’s estate, even though the estate had not been reported to the Master of the High Court. Mrs Viljoen lodged a complaint with the Pension Funds Adjudicator, who set aside the Fund’s decision and ordered the Fund to investigate, identify beneficiaries and pay the benefit by 31 August 2023. The Fund then approached the High Court (Mpumalanga Division, Mbombela) for an order declaring the Adjudicator’s decision invalid. It contended that s 37C(1)(a) and (c) of the Pension Funds Act 24 of 1956 obliged it to pay the benefit to the estate if no dependant was traced within 12 months of the date of death. The High Court dismissed the Fund’s application with costs and confirmed the Adjudicator’s order. The Fund appealed to the Supreme Court of Appeal with leave of the High Court.

• Whether the phrase 'within twelve months of the death of the member' in s 37C(1) of the Pension Funds Act 24 of 1956 commences on the date of the member’s death or on the date the fund becomes aware of the member’s death.
• Whether s 37C permits a fund to pay a death benefit into the deceased member’s estate before establishing the existence and identity of dependants or nominees.
• Whether the Fund’s statutory duty to investigate and trace dependants is extinguished if it only learns of the member’s death more than 12 months after the date of death.

The appeal is dismissed with costs, including costs of two counsel where so employed.

Section 37C(1) of the Pension Funds Act 24 of 1956 must be interpreted purposively so that the 12-month period for a fund to become aware of or trace dependants commences on the date the fund learns of the member’s death, not on the date of death. A fund is legally obliged to identify, trace and equitably allocate death benefits to dependants and/or nominees before any payment to the deceased’s estate may be considered; payment to the estate is authorised only where no dependants or nominees are found after the statutory investigation has been exhausted.

The Court observed that the Fund’s insistence on appealing a matter concerning a relatively small benefit (R52 120.53) was insensitive, and that the Fund could have used another matter as a test case. It also noted that a rigid 12-month limit from the date of death would strip many unsophisticated rural beneficiaries of statutory protection. Additionally, the Court made extensive remarks endorsing the award of costs to pro bono legal representatives to promote access to justice and to encourage future public-interest litigation.

The judgment authoritatively settles that the 12-month tracing period in s 37C(1) of the Pension Funds Act runs from the date the fund becomes aware of a member’s death, not from the date of death. It reaffirms the social security and protective character of death benefits under the Act, holding that payment to an estate is permissible only as a last resort after the statutory enquiry into dependants and nominees has been exhausted. The decision gives practical content to constitutional values of equality and social security (ss 9 and 27 of the Constitution) through purposive interpretation under s 39(2), and it underscores the courts’ willingness to award costs in favour of impecunious litigants represented pro bono in public-interest matters.