INTERPRETATION RULING: APPLICATION
OF SECTION 37C OF THE PENSION FUNDS
ACT.
In this edition we take a look at the interpretation ruling.
Firstly, the Interpretation Ruling is issued in terms of section
142(1) of the FSR Act to provide clarity, consistency and
certainty on the interpretation and application of section
37C of the Act.
Section 37C applies despite anything to the contrary
contained in any law or the rules of a registered fund.
Therefore, in the event that a registered set of rules or a rule
is in conflict with section 37C, section 37C prevails.
The following benefits are excluded from “any
benefit” contemplated in section 37C (1):
(a) A benefit payable as a pension to the spouse or child of
the member in terms of the rules of a registered fund.):
(b) A benefit which is a subject matter of a pledge under
section 19(5)(b)(i) of the Act.):
(c) A benefit which is subject to lawful reduction under
section 37A (3) or a lawful deduction under section 37D
of the Act.
Apart from the exclusions alluded to above, the
reference to “any benefit” in the context of Section
37C does not contain any further restrictions and
would therefore include:
(a) A benefit due to a paid-up member.
(b) A benefit due to be paid out or transferred in accordance
with a written instruction received by the fund from a
paid-up member prior to the paid-up member’s death,
but which has not been paid out or transferred prior to
such paid up member’s death.
(c) A retirement benefit that is due and payable to a
member, but has not been paid to the member prior to
such member’s death.
If the deceased person was, at the date of his or her
demise, a member of the fund, as defined in the Act, any
benefit payable upon the death of such member is subject
to section 37C of the Act and must be dealt with in the
manner and circumstances provided for in section 37C.
The provisions of section 37C must be applied irrespective
of whether the benefit is as a result of a policy purchased
by the fund.
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