A beneficiary fund is a legal entity that is created when money is placed in the “trust” with trustees. The trustees are there to ensure that the money is administered with the necessary care for the benefit of the beneficiaries. It is an efficient and flexible way to ensure that assets are looked after. It also ensures that assets are objectively managed and controlled by appointed trustees in the best interest of the beneficiaries.
A beneficiary fund is set up when a member of a pension/provident fund passes away. The death benefits are then paid over by the Pension / Provident Fund to a Beneficiary Fund Administrator with the instruction that a beneficiary fund be setup. The fund is setup for the benefit of the beneficiaries of the fund; usually the minor children of the deceased and/or children that are still attending school/tertiary institutions.
- The lump sum amount received from the Pension / Provident Fund is invested by Investment Consultants of the Fund.
- Interest is then earned on this investment.
- A monthly income is credited in the accounts of the beneficiaries.
- Certain expenses can be claimed from the fund.
Please note that this amount is not intended as a substitute for the late member’s salary, but to assist the guardian.
- School requirements
- Living expenses
- Major Medical Expenses
All payments are subject to the administrator’s discretion
A claim takes at most five working days to be processed once all the relevant documentation is received. The following documentation is required:
- A certified copy of the guardian’s ID or Passport.
- An affidavit if there is any difference in your name i.e. a difference between your maiden name and married name. (An affidavit can be obtained from your Local Police or Commissioner of Oaths.)
- Requests for school fees should be on a school letterhead, stamped and signed by the principal.
- Requests for uniform should be on the supplier’s letterhead, stamped and signed by an authorized person.
- Medical claims should be on either the institutions and/or the doctors’ letterhead and signed by the responsible registered physician.
- Proof of mental / terminal illness should be signed by a registered physician.
- All requests payable to the supplier must be accompanied by the supplier’s banking details. (E.g. school, doctor, uniform supplier). The name of the beneficiary should appear on the request.
- Please note that requests must show how much each child requires.
- If a new guardian has been appointed, then the following is required:
- A proof of guardianship letter authorized and signed by Trustees of the relevant Fund.
- Certified copies of the children’s ID/Birth
- Certified copy of appointed guardian’s ID /Passport.
- Certified copy the deceased death certificate.
Where there is incomplete or conflicting information the administrator reserves the right to ask for more information. This will impact on the turnaround time to pay the claim.
The aim of the beneficiary fund is for the guardian to receive monthly income until the children reach majority age; however, depending on the circumstances, all the money in the fund could be finished before the children reach years of age or complete their education e.g. due to claims paid for school requirements and medical bills. It is therefore important that the guardian carefully consider the claims that he/she makes. This should be based on the available funds, and the duration of the beneficiary fund.
Any lump sum withdrawal / payments will reduce the capital amount and monthly income.
The guardian should ensure that any changes in personal information (e.g. banking, address etc.) should be communicated in writing to Likhwane Beneficiary Services. A copy of the guardian’s ID should accompany the change request.
This report is sent out once a year and gives a general overview of the beneficiary fund, including its current value, termination date and monthly payment details.
Certificate of Existence
This certificate is sent out once a year. The purpose of this certificate is to ensure that Likhwane Beneficiary Services (Pty) Ltd has the correct beneficiary on record (who is still alive) that the monthly income is paid for the correct person.
NB: The Certificate of Existence must be completed, signed by a Commissioner of Oaths, and returned within 3 weeks of the date issued. Failing to do so will result in the monthly income being stopped.
A beneficiary fund will be terminated when a beneficiary has completed his/her education, or the beneficiary has reached 21 years of age. This assuming that there is still money left in the beneficiary fund.