Death benefits and the impact on members/ participating employers with arrear contributions: Auto Workers Provident Fund and Motor Industry Provident Fund

 Dear Participating Employer

 In terms of the registered Rules of the Fund, if a member dies whilst in the services of his/her employer and contributing to the Fund, prior to reaching his/her normal retirement age, the member qualifies for a lump sum death benefit. The benefit is paid from the Fund and equals to the:

• Member’s Fund Credit, plus
• Three (3) times his/her last determined remuneration (“risk benefit”).

On the death of a deferred retiree or paid-up member, only the member’s fund credit will become payable.

In terms of Section 37 (C) of the Pension Funds Act, the Fund is obliged to award and pay the death benefits firstly to proven dependants of the deceased member. Thereafter, the Fund may give consideration to awarding and paying benefits to persons who are not dependants but who have been nominated by the member to receive a portion of the benefits. For this purpose, an updated record of the member’s wishes (“beneficiary nomination form”) in this regard will be of great assistance to the Trustees in locating both dependants and nominees to ensure they receive any benefits that may be awarded to them.

In terms of the rules of the Fund, participating employers (“Employers”) are required to pay contributions to the Fund under the conditions set out in the Collective Agreement. It is important for all Employers and Employees (“Members”) to understand that if the Fund does not receive contributions from Employers as required by the rules of the Fund and the Collective Agreement, beneficiaries would not receive the member’s risk benefit when the member passes away. Only the, member’s Fund Credit (Accumulated Savings) will be payable by the Fund.

The Fund therefore appeal to Employers to ensure that contributions are paid up to date when submitting death claims for processing.

Yours faithfully

Adam Esat
Principal Officer

Application forms and required documents can be submitted to: query@mifa.org.za

11 August 2023