Information Circular 2 of 2010: Section 37C Death Benefit Clarification

Board Members AM Sithole (Chairperson) H Wilton (Deputy Chairperson) T Mokgabudi Prof M Ncube Z Bassa JV Mogadime M Phetla-Lekhethe J Cross Prof PJ Sutherland BM Hawksworth Executive Officer DP Tshidi Riverwalk Office Park Block B 41 Matroosberg Road Ashlea Gardens Extension 6

Pretoria South Africa 0081 PO Box 35655 Menlo Park Pretoria South Africa 0102 Tel +27 12 428 8000 Fax +27 12 347 0221 E-mail info@fsb.co.za Toll free 0800 110443/0800 202087 website:www.fsb.co.za ENQUIRIES: Alta Marais D. DIALLING NO.: 012 428 8065 OUR REF: 12/12/1 FAX: 012 346 6510 DATE: 8 March 2010 E-MAIL: altam@fsb.co.za INFORMATION CIRCULAR PF NO. 2 OF 2010 PENSION FUNDS ACT, 1956 SECTION 37C – PAYMENT OF DEATH BENEFITS The purpose of this Circular is to provide clarity on the applicability of section 37C where a member became entitled to a withdrawal or retirement benefit and subsequently dies before payment or transfer of such withdrawal or retirement benefit. The provisions of section 37C are only applicable to lump sum benefits which become payable by the fund in terms of its rules as a result of the death of a member. When a member exits the fund as a result of resignation, dismissal, retrenchment or retirement the relevant withdrawal or retirement benefit accrues in terms of the rules of a fund. Should the member die after the date of accrual of the withdrawal or retirement benefit, but before the benefit can be paid or before the member could make an election for the benefit to be transferred to another fund, the legal nature of the benefit does not change and the provisions of section 37C of the Act is therefore not applicable. Funds are hereby requested to ensure that their rules are consistent with this interpretation and if not, funds must amend their rules within a period of 6 months from the date hereof. Such amendment will not attract the fee as prescribed in Schedule L. Yours faithfully JA BOYD For: Registrar of Pension Funds