Legislation

Section 37C death benefits: orientation for boards (not a nomination form)

Orientation on the death-benefit distribution duty — nominations as wishes, not a will substitute.

Legislation · ~9 min · Education only

Section 37C is not a nomination-form exercise. When a benefit is payable upon a member’s death, the Pension Funds Act generally takes that benefit out of the deceased’s estate and requires the fund to deal with it under the section. FSCA Interpretation Ruling 1 of 2024 (RF) quotes that introduction and clarifies when the section applies.

What s37C is for — benefit payable upon death, generally not estate property

The section exists so dependants are not left destitute by an automatic estate path. When a benefit is payable upon death, it is generally not estate property and the fund must deal with it under s37C.

This explainer orients boards. It does not design forms, invent allocation percentages, or advise on a live claim. Subsection clocks and payment-mode detail beyond what IR 1 of 2024 locks need the consolidated Act open on the table — mark those as check-primary, not guesswork.

Nominations: relevant wishes, not a will substitute

Nominations still matter. They are evidence of the member’s wishes. They do not replace the board’s statutory distribution duty, and they are not a will.

Saying “always follow the nomination 100%” is as wrong as saying “bin the nomination.” Minute nominations as evidence of wishes — with a clear record that they are not a binding estate directive.

When s37C applies — and when it may not (IR 1 of 2024)

FSCA Interpretation Ruling 1 of 2024 (RF) revokes IR 1 of 2020 and Information Circular PF No. 2 of 2010. It clarifies scope: if the benefit already became payable before death (for example, because a written pay or transfer instruction was received), s37C may not apply and an estate path may be relevant.

Paid-up and deferred member deaths can still fall under s37C until a written pay, transfer, or retire instruction is received. Unclaimed-benefit pots need caution — do not assume every subsequent death automatically re-opens s37C without reading the ruling and the rules. Edge cases need counsel.

Investigation, equitable allocation and payment modes — orientation only

Boards typically need an investigation plan to identify and trace potential dependants and nominees, then an equitable allocation that considers dependency, extent of dependency, wishes, and other means — without pretending the Act supplies fixed percentages.

Payment modes (lump sum, trust, instalments, beneficiary fund, and others under the rules and section) belong in the determination record. Do not invent a complete payment-mode list or investigation clocks from memory — open the consolidated Act. We do not invent OPFA holdings here.

Checklist — what the board pack should show on a death claim

On death notification: investigation plan to identify and trace potential dependants and nominees; progress reported to the board or claims committee.
Pack distinguishes benefits that may have vested before death (possible estate path per IR 1 of 2024) from benefits payable because of death (s37C path).
Paid-up / deferred member deaths: treatment before vs after a written pay/transfer/retire instruction (IR 1 of 2024).
Nomination forms filed as evidence of wishes — with a clear minute that they are not a binding estate directive.
Equitable-allocation factors minuted (dependency, extent of dependency, wishes, other means) without fixed percentages pretended from the Act.
Board satisfied it can allocate; investigation windows not treated as permission to delay once investigation is complete (confirm exact Act wording before asserting clocks).
Payment modes considered under rules + s37C — who decides recorded. Open consolidated Act for the full mode list.
Aged / unresolved death claims on the board pack exception list; Adjudicator/FSCA escalation considered when appropriate — without inventing case holdings.

Questions to table (open the consolidated Act; no determination advice)

Does this benefit fall under s37C, or did it vest before death per IR 1 of 2024?
What investigation steps are underway to trace dependants and nominees, and who owns progress reporting?
How are nominations minuted — as wishes, not as a will?
Which equitable-allocation factors were considered, without fixed percentages invented from market habit?
Check primary / ask counsel: subsection clocks, payment modes, and any OPFA colour for this fact pattern — unverified as general holdings here.

How we source

We summarise public rules and desk templates for education. We do not invent accreditor names, rankings, or personalised advice. Hard gaps stay unverified — ask counsel or check the primary instrument.