The one thing that is inevitable for everyone, irrespective of their ethnicity or social status, is death and the way it robs us of our loved ones. Given its uncertainty, in most cases death comes when the surviving relatives are not in a position to incur related costs. The general belief is that our family members will know what to do when we are gone, but unfortunately this is not the case. In addition to dealing with the loss, most family members also have to deal with issues they are not familiar with, such as claiming funds from retirement funds and other financial institutions, to provide for the dependants.
This article discusses the death benefits offered by retirement funds in Namibia. It also highlights what the responsibilities of individuals are while alive, the duties of the family and what to expect after the death of a family member. The article also provides guidance as to who would qualify as a legal beneficiary or dependant of the deceased.
DEATH BENEFITS OFFERED BY
Death benefits are financial benefits provided to beneficiaries of a deceased member (who belonged to a fund). The main aim of this benefit is to ensure that dependants of the deceased are not left destitute after the death of a breadwinner.
This benefit is provided by retirement funds to which employees belong, and it is paid to the family members of the deceased employee who was a member of the said retirement fund upon his/her death. The benefits are paid out to the dependants after a claim has been lodged with the fund concerned (by completing correct claim forms and submitting the relevant documents).
DIFFERENT TYPES OF
Distributing the death benefits can be a cumbersome experience that can be highly emotive for those that remain behind. It is therefore important for family members to understand who qualifies for the death benefits so as to ensure that the dependants are provided for and that relationships are not destroyed as a result of the distribution of the benefits. Different types of possible beneficiaries that could be nominated are as follows:
• Legal Dependants: those whom the deceased member is legally liable for. These are legal spouses and minor children (legitimate and those born out of wedlock, own and adopted).
• Factual Dependants: may not necessarily be based on blood relationships, but refers to anyone who can prove the financial dependency on the deceased to the trustees satisfactorily (parents,
grandparents, common law spouses, concubines, live-in partners, step children, nieces, nephews looked after by the deceased member);
• Future/would-be legal dependants: anyone whom the member would have become legally liable for, had the member not died (i.e. posthumous-child born after his death, Fiancée), and
• Nominees: any person who is not a dependant, but whom the member has designated to receive all or a portion of the benefit payable from the fund on the death of the member.
DEATH BENEFIT PAYMENTS
Section 37C of the Pension Funds Act, 1956 (Act No. 24 of 1956) (“the Act”) prescribes how the death benefits should be distributed. The Act stipulates that the distribution and payments of the death benefits should be made within 12 months of the death of the member, and when the trustees have satisfied themselves that all dependants have been traced and confirmed. Depending on the type of retirement fund that a member belonged to, the dependants that are above 21 years of age are paid a lump sum amount equivalent to the portion allocated to him/her by the trustees. Payments in respect of minor children are made into a trust or Guardian’s Fund after which monthly payments to the guardian, for the benefits of the beneficiary, will be made until he/she has reached the age of 21.
Section 37C of the Act further prescribes the following conditions to be fulfilled before paying out the death benefits:
• When there are dependants only; the board should ensure that all factors are considered and equitable portions are paid out to the dependants traced (to the trustees’ satisfaction) within 12 months, ensuring that no legal dependant is excluded.
• When dependants are not traceable but only nominees; in this case, the board is obliged to make the payment based on the nomination form but it has to consider the solvency of the estate first before making the payment. When the deceased’s estate’s liabilities exceed its assets, the debt in the estate should be settled
first before paying the balance to the nominees.
• When there are both dependants and nominees; when the board has traced dependants and the member has also nominated nominees, trustees have a duty to ensure that all factors are considered and equitable portions are allocated to both dependants and nominees without excluding anyone, within 12 months of the death of the member and after satisfying themselves that all dependants have been traced.
• When there are no dependants or nominees; in a case where the board of the fund does not become aware of or cannot trace any dependant
of the member within 12 months of the death of the member and if the member has not designated a nominee in writing to the fund, the board of the fund is required to pay the entire death benefit into the deceased member’s estate or, if no inventory in respect of the deceased estate has been lodged with the Master of the
High Court, into the Guardian’s Fund.
RESPONSIBILITY OF THE FAMILY
OF THE DECEASED
Immediately when the family learns of the death of their family member, they should alert and inform the employer for the process of claiming benefits to begin. This is to allow the board with ample time to gather all the relevant information. When it comes to distributing a benefit, especially where a huge amount of money is involved, complex relationships might unexpectedly exist giving preference to certain individuals. Therefore, in these cases the board relies on the family to clarify and furnish truthful information regarding such relationships.
To avoid delays and speed up the payment process, family members are responsible for submitting the following documents and any other document required by the employer or the administrator responsible for the payment of the death benefits.
• Completed Claim form.
• Certified copy of the death certificate.
• Certified copy of the marriage certificate.
• Certified copies of the children’s identity document (both legitimate and those born out of wedlock) or full birth certificates of children, indicating names of both parents when an identity document is not available.
• Certified identity documents of the guardians (for minor children).
• Affidavits by the guardians (for minor children) as proof of guardianship.
• Adoption documents.