25 August 2025
The Constitutional Court has ruled for the first time on how the law should determine who is entitled to benefit from the pension of a person who has died. Illustration: Lisa Nelson
The Constitutional Court has ruled for the first time on how the law should determine who is entitled to benefit from the pension of a dead person.
On 15 December 2012, Takalani Mutsila, an employee of the Ba-Phalaborwa Municipality, died in a workplace accident. His death set off a dispute that has been ongoing for nearly 13 years.
Two women claimed they were Mutsila’s surviving spouse. Each woman claimed that she and her children were dependent on him at the time of his death, so they were entitled to his pension benefits.
The first woman, Tshifhiwa Shembry Mutsila, married in terms of civil law, said she and her five children were dependent on him at the time of his death.
The second woman, Dipuo Masete, said she had had a customary law marriage and had two children for whom he was responsible at the time of his death. She and her children were listed as beneficiaries of his life insurance policy, and this was offered as proof that he considered them his dependents.
In its decision, the Municipal Gratuity Fund decided that both women as well as their children were dependents of the man so they both qualified to benefit from his pension. It awarded 22.5% to Mutsila and 27.5% to Masete. The Fund awarded more to Masete and her children because Masete earned much less than Mutsila. It reasoned that Mutsila, unlike Masete, was financially independent.
Unhappy with this outcome, Mutsila hired a private investigator. The investigator found that Masete was married under customary law to another man, Malema Joseph Mphafudi, and that he was the biological father of Masete’s two children. Based on this, Mutsila appealed the fund’s decision.
An adjudicator found that the Fund had failed to conduct a proper investigation and directed the Fund to conduct a proper investigation and make an equitable distribution.
The Fund, in 2014, approached the high court to set aside the decision of the adjudicator.
The high court, and then a full bench of the high court both dismissed the fund’s application.
But the Supreme Court of Appeal (SCA) set aside the adjudicator’s decision.
The SCA said the essential issue in this case was whether Masete and her two children were dependent on the man as a matter of fact. In the SCA’s view this had never been challenged. The SCA also found that the adjudicator failed to give the Fund an opportunity to be heard.
Finally, the Constitutional Court ruled that the Fund had failed to correctly determine who was the beneficiary. The court sent the matter back to the fund to make a fresh decision on who the beneficiaries should be.
The court did not rule in favour of either woman. But it did explain the correct approach to decide who qualifies as a beneficiary of a pension when someone dies. This is governed by the Pension Funds Act.
Under the Pension Fund Act, when someone dies their pension does not fall into their estate. Instead, the distribution and allocation of their pension benefits goes to their dependents.
The Act recognises two categories of dependents: legal dependents and factual dependents.
Legal dependents are people you were legally married to you, or your children. In other words, people who you are legally obliged to maintain even after your death.
But the Act also creates the concept of factual dependents – people who at the time of your death were dependent on you. This means that even if you weren’t legally married to someone or someone was not your biological child but you looked after them, they could qualify as dependents.
The court said the Act aims to give effect to the right to social security in the Constitution by ensuring that people receive financial assistance through pension benefits and do not become reliant on the state.
The Act sets out three core functions for a pension fund: it must actively investigate in order to find and trace all the dependents of the deceased and the extent of their dependency; it must make an equitable distribution of the pension benefit; it must determine how to make payment.
The court found that the fund had failed to conduct a proper investigation and failed to verify the claim by Masete that she was married to the deceased in terms of customary law. It had relied on a lobola letter and affidavit from the deceased’s brother. And when the fund was confronted with contradictory evidence, it treated Masete and her children as factual dependents.
This was the wrong approach, the court said. The fund had failed to establish the nature of the relationship between the deceased and Masete or her children. The court concluded that the allocation and distribution were tainted by this failure.
The court said that for legal dependents, such as a spouse, once it is established that they were married, then the person qualifies even if they were estranged at the time of death.
The court said the fund has no discretion to decide if someone is a legal dependent. Dependent children include biological children, adopted children and children born out of wedlock.
For factual dependents, the decision must be made based on the circumstances at the time of the person’s death.
The court set aside the decisions of both the fund and adjudicator and sent the matter back to the fund to make a fresh decision taking its guidance into account.
The fund will have to make a decision within three months of the court’s decision.