Why you should nominate a beneficiary
A beneficiary is a person you elect to receive all or a percentage of your benefit in your retirement funds. You can only select a natural person as a beneficiary on your retirement fund, not a charity, church, business, trusts, or your estate.
Do these three things now to ease the burden on your loved ones when you pass away:
- Ensure you have a valid will.
- Choose your beneficiaries.
- Let a family member know where to access necessary paperwork and your passwords.
When to update your beneficiary
After every significant life event, such as getting married, the birth of a child, getting divorced, or if one of your chosen beneficiaries passed away, it is essential to update your beneficiary nomination and ensure we have your beneficiaries’ contact details. You should also revisit your chosen beneficiaries on each contract when you update your will.
“Up-to-date beneficiary details help prevent mistakes, make the allocation of your fund benefit easier and support the administration process when you pass away.”
How to update your beneficiaries
When you update your beneficiaries, you must specify the following:
- The full names of the persons.
- Their dates of birth.
- Your relationship with them.
- Any contact details.
- The percentage you would like to leave to each beneficiary.
Momentum Savings (previously Investo) clients can update their beneficiaries on momentum.co.za without contacting the service centre. They can log in, select Investments and Savings on their product, and then select Beneficiaries. Their financial advisers can also update it.
Momentum Wealth clients can update their beneficiaries by contacting their financial advisers.
Momentum Traditional clients can update their beneficiaries by contacting their financial advisers or our service centre directly. They can also submit a service request on momentum.co.za from the Momentum Traditional page.
“You can nominate one or more persons as beneficiaries. Beneficiaries should include your spouse or partner, your children, any person financially dependent on you (a parent or sometimes even your domestic worker) or any person you want to receive a part of your benefit.”
The importance of choosing a beneficiary
The Pension Funds Act states that your financial dependants get preference over non-dependant beneficiaries. This means the death benefit from your retirement fund will not necessarily be paid as you have specified.
Why bother to nominate then, you may ask? It is still important to indicate who you want as your beneficiaries, as the trustees of your fund will place great weight on that. The law is intact to protect vulnerable people who may be overlooked.
Nominations save a lot of time, money, and hassle, and your loved ones will only thank you for your diligence in keeping your beneficiary list updated.
The importance of a complete beneficiary form
It is important to make sure your beneficiary form is completed correctly. An incomplete form will not be accepted as valid. It is also important to note that only an official beneficiary form will be accepted as valid. A last will and testament, or any other type of document, will not be accepted as a valid nomination form.
Get financial advice
We recommend that you get in touch with your financial adviser to plan for your retirement together. South African retirement funds must also give their members access to retirement benefit counselling when they are close to retirement and at retirement.
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