When Can a Pension Fund Challenge a Death Benefit Ruling? The High Court Says: Almost Never
The Pretoria High Court recently confirmed that a pension fund lacks the standing to seek reconsideration of the Pension Funds Adjudicator’s death benefit determinations before the Financial Services Tribunal, unless the fund’s own legal rights have been infringed. For most funds, in most section 37C disputes, they will not have been.
The case in brief
In Discovery Life Provident Umbrella Fund and Another v Financial Services Tribunal and Others (132345/2023) [2025] ZAGPPHC 1118 (10 October 2025), a fund member died unmarried. His mother claimed factual dependency. The fund’s section 37C investigation identified a minor child on the deceased’s medical aid, with the mother reporting R800 in monthly support for the child. The fund allocated 60% of the death benefit to the mother and 40% to the child.
The mother disputed the child’s dependency, alleging non-paternity. The Adjudicator found the fund’s investigation inadequate, set aside the allocation, and directed the fund to take further steps including paternity testing or a fresh dependency assessment.
The fund applied to the Financial Services Tribunal (FST) for reconsideration under section 230 of the Financial Sector Regulation Act 9 of 2017 (“FSR Act”). The FST dismissed the application for lack of locus standi (Discovery Life Provident Umbrella Fund and Another v Pension Funds Adjudicator and Another (PFA25/2023) [2023] ZAFST 110 (1 September 2023)). The fund then brought the matter to the Pretoria High Court under section 235 of the FSR Act, seeking judicial review of the FST’s order. The Court upheld the FST’s ruling.
Why the fund lost
The Court’s reasoning turned on the meaning of “person aggrieved” in section 230 of the FSR Act. Following the test in Francis George Hill Family Trust v South African Reserve Bank and Others 1992 (3) SA 91 (A), it held that a “person aggrieved” is someone whose legal rights have been infringed, not someone with a financial, reputational or administrative interest in the outcome.
A fund’s role under section 37C is administrative. It investigates, identifies dependants and beneficiaries and distributes. The death benefit itself never belongs to the fund. So when the Adjudicator directs the fund to redo its investigation or adjust its allocation, the fund’s legal rights are not affected. The fund is being told to do its job differently, not being deprived of something it is entitled to.
The Court was also clear that the right to seek judicial review of an FST order under section 235 cannot be used to widen the gateway under section 230. If a fund does not qualify as a “person aggrieved” at the reconsideration stage, it cannot bootstrap its way into standing at the review stage.
The Court rejected the argument that administrative inconvenience, reopening investigations, allocating resources, dealing with reputational fallout, gives the fund standing. Inconvenience is not the same as legal prejudice.
What this means in practice
Trustees cannot rely on reconsideration or review as a backstop. If the Adjudicator directs the fund to redo a section 37C investigation, the fund must comply. It cannot escalate through the FST to resist that direction, unless its own legal rights not merely its administrative interests are at stake.
The pressure on thorough first-round investigations increases significantly. Funds that conduct superficial dependency inquiries relying on incomplete affidavits, skipping tracing, or failing to interrogate conflicting claims are exposed. Once the Adjudicator intervenes, the fund’s ability to shape the outcome is limited to compliance with whatever the Adjudicator directs.
Payments already made create a particular difficulty. Where benefits have been distributed and the Adjudicator subsequently sets aside the allocation, recovering overpayments from beneficiaries is practically difficult and legally uncertain. This makes the case for withholding distribution until investigations are genuinely complete but that, in turn, risks delaying payments to beneficiaries who are not in dispute.
The judgment leaves unresolved a practical tension. Funds are typically closest to the facts. They hold the membership records, they conduct the tracing, they receive the dependency claims. If the Adjudicator or FST makes a determination that benefits an individual the fund knows (or suspects) is not entitled, the fund has no mechanism to challenge that outcome. The ruling raises the question of how the broader interests of justice are to be protected in circumstances where the only parties with locus standi are the competing beneficiaries themselves.
The takeaway for trustees
This ruling is a clear signal to invest in the quality of section 37C processes. That means proper tracing, thorough dependency investigations, documented reasoning for allocations, and a willingness to delay distribution (within the statutory timeframe) when the facts are genuinely contested. The alternative, a superficial process followed by an Adjudicator determination that the fund cannot challenge, is worse for everyone involved.
How Spencer West can assist
Spencer West advises pension funds, boards of trustees, employers and administrators on pension fund law, governance, regulatory compliance and fund-related disputes. We assist with trustee governance, death benefit distributions, section 13A compliance, fund rule interpretation, complaints before the Pension Funds Adjudicator and related litigation and Tribunal proceedings.
