If you have dependants, your pension fund will not allow you to nominate your estate as your beneficiary, writes Liezl Momberg, head of legal services at Nedgroup
Members are always asked to provide their retirement fund with the names of the persons or beneficiaries whom they would like to receive the pension benefits on their death. These nominations give the trustees an idea of the wishes of the member, such as to whom and in what proportion the member would like the benefit to be paid.
However, these nominations are not binding on the trustees (except where a member has no ‘dependants” as defined in the Pension Funds Act).
Instead, trustees are obliged to find a member’s dependants and first consider them.
Dependants include a spouse, children, and any person factually dependent on the member.
It therefore serves no purpose for a member to nominate his or her estate, and members of retirement funds may find that their retirement fund will not accept the nomination of their estate as their beneficiary.
However, members of retirement funds who have no dependants and who do not want to make nominations of nominees, do not have to be concerned as the law ensures that the pension benefits on their death will be paid to their estates.