The SCA has ruled against an insurer in a dispute over a payment made to a deceased beneficiary. The Cape Times reports that the FundsAtWork Umbrella Pension Fund had allocated 42% of member Massimiliano Guarnieri's death benefits to his mother without first checking if she was alive.

She had in fact died four days before the decision to pay her R541 215 was made.

The mother, Guarnieri's wife Anna, and two children were listed as his beneficiaries when he died in a car crash.

Judge of Appeal Malcolm Wallis' judgment read: 'The board added that it had been unaware that (Guarnieri's mother) had died four days before it made its original decision in July 2014 and that it made the decision bona fide and in ignorance of the true situation. It was the fund's obligation to keep itself abreast of the situation, especially as it was well aware that she was elderly, suffering from a life-threatening condition and in frail care.'

The initial distribution was set aside by the Pension Funds Adjudicator and remitted to the board for a fresh decision to be made. The board made the same allocation as in its original decision.

This was set aside by the High Court at the instance of Anna and children.

The SCA held that on a proper interpretation of the definitions of 'member' and 'dependant' in the Pension Funds Act 24, for a beneficiary to qualify as a dependant and be allocated a portion of a member's death benefit, he or she had to be alive at the time the distribution decision was made.

Full Cape Times report (subscription needed)

Fundsatwork Umbrella Pension Fund v Guarnieri and Others