LIKE any other sector, the pensions industry is constantly affected by changes in the legal environment.
The new marriages law, the Marriages Act (Chapter 5:17), which came into operation last September, outlines several types of unions, including a civil partnership and a qualified civil marriage that previously did not exist in a legal sense.
The legal recognition of these unions may have caused disquiet in some conservative circles, especially on the issue of civil partnerships.
Other people were not sure how the new marriages legislation would affect the distribution of pension benefits in the case of a deceased principal member. The sector regulator, the Insurance and Pensions Commission (IPEC), has made clarification on the matter.
IPEC director, pensions and life assurance, Mr Cuthbert Munjoma, said the implementation of the new marriages law has no major effect on pension benefits because they are guided by another law.
“Although there are unions that the new Act recognises that were not previously recognised, it is critical to note that the recognition of the new unions serves mainly to define the responsibilities and obligations of the parties concerned in the event that the unions are dissolved.
“Pension benefits normally become due and payable to a spouse upon the death of a principal member, so the dissolution of a union has no impact on the pension benefits given that the principal pension scheme member is still alive,” he said.
The handling of pension benefits, in the event that the principal fund member has passed away, is guided by the Pension and Provident Funds Act (Chapter 24:32), and attendant regulations. Added Mr Munjoma: “In terms of pensions law, pension benefits are ring-fenced and by operation of law, the benefits do not form part of the deceased’s estate.
“It must be noted that when a member joins a fund, they are required to furnish a list of beneficiaries who will receive their pension benefits upon death.
“In the event that there is a dispute regarding who should be recognised as the spouse, then recourse will be found in terms of the Marriages Act to determine whether there is a legal marriage or not.
“Legal marriage in this context refers to civil marriage, registered customary law union or unregistered customary law union.”
According to IPEC, the pensions regulations provide a hierarchy that is used to determine which beneficiary ranks high.
At the top of that hierarchy is the surviving spouse and dependent minor children.
If the deceased leaves no surviving spouse, the pension benefits go to his or her dependent minor children and his or her dependent children.
If the deceased leaves no surviving spouse or dependent children, the pension benefit can go to any dependent.
If the deceased leaves no surviving spouse, dependent children or other dependent, the pension benefit can go to his or her stated beneficiary.
And if the deceased leaves no surviving spouse, dependent children, dependent or beneficiary, then the pension benefit goes to his or her estate.
Lawyer Nobert Phiri says a party to a civil partnership has no legal right to receive their deceased partner’s pension benefit.
“There are no regulations presenting themselves for examination as regards the position of parties in a civil partnership.
“The civil partnership being a ‘living-in’ arrangement, which is factual, is given legal status at the time of dissolution.
“The relationship is not recognised as a marriage and the word spouse cannot be interpreted to mean a partner in a union not recognised by the law.”
Zimbabwe has a dual pension system, which consists of private occupational pension schemes and a statutory pension fund, the National Social Security Authority (NSSA).
Zimbabwe Association of Pension Funds (ZAPF) director-general Sandra Musevenzo said: “The payment of pension benefits is governed by the Pensions and Provident Fund Act, which stipulates the order of payment of benefits.”
With regard to NSSA, a surviving spouse claiming the survivor’s benefit is required to produce a certified photocopy of the marriage certificate or original affidavit.
This is in terms of the NSSA Act (Chapter 17:04) and Statutory Instrument 393 of 1993.
NSSA deputy director, marketing and communications, Mr Tendai Mutseyekwa, said they pay benefits to a beneficiary in a reduced amount, which is in line with the traditional defined benefit (DB) pension model.
“We pay 40 percent of what the retiree pensioner was earning.
“They would have to prove they were married to the deceased, and this can be done through credible witnesses.”
Many private occupational pension funds are, however, shifting from the DB model to the defined contribution (DC) model.
In terms of the DC model, the beneficiary of a deceased’s pension fund can access the balance of the funds in the retirement account through a gradual drawdown, or a lump sum payment.
Mr Phiri said to properly administer benefits, pension funds, board members, principal officers and employers should fully understand the rights and responsibilities of spouses and other dependants. – Sunday Mail