Have you appointed a 'Beneficiary' for your EOSB at your company ?

The appointment of 'Benficiary' applies to payments made in respect of EOSB – End of Service Benefits, other emoluments due to the employee, unpaid salaries, employee insurance claim benefits, and all other cash and /or asset benefits due to the employee. Thereby by executing a 'Beneficiary Form' an employee  permits , the employer, to make decisions on,  to whom the EOSB/ accrued emoluments,benefits that may be encashed,  can be disbursed ,incase of untimely death of an employee during the course of his/her employment.

An employee may appoint a beneficiary or beneficiaries to receive the sum assured as a right payable on the death of employee from the employer. The appointment applies to payments made in respect of EOSB – End of Service Benefits, other emoluments due to the employee, unpaid salaries, employee insurance claim benefits, and all other cash and /or asset benefits due to the employee. Thereby by executing a 'Beneficiary Form' an employee permits , the employer, to make decisions on, to whom the EOSB/ accrued emoluments,benefits that may be encashed, can be disbursed ,incase of untimely death of an employee during the course of his/her employment.

Appointing a beneficiary by the employee reduces the burden of the employer to discern the rightful beneficiary , or even to obtain probate in the event of a valid death claim. Thereby if the company has the provision for signing of the beneficiary form , such a beneficiary form ensures that the company pays the employee dues/emoluments/ proceeds accrued to the appointed beneficiary without delay.

Appointing a beneficiary is optional. In the absence of this appointment the proceeds may be disbursed entirely at the discretion of the court upon a presentation of claim to the court of competent jurisdiction. Incase of conflict , such a arrangement can even serve as a documentary aid for judicial dispensation of a claim.

In case the employee chooses to appoint multiple beneficiaries, it is necessary that the employee understands the implications of appointing more than one beneficiary and the effect it will have in the event of a valid death claim. If an employee is unsure whether or not he/she should appoint a beneficiary, or unsure of the effect of appointing a beneficiary, please consult your financial /legal adviser. An employee can revoke a beneficiary appointment at any time before death.

A beneficiary form cannot be used to make a gift but is solely for the usage of the company to disburse the amount due to the duly appointed beneficiary of the deceased employee.

Should there be any loan with the bank or any financial institutions, this form may be ignored and the EOSB /emoluments may be first transferred to the bank/ Financial institution if any and as the case may be , to pay off the liability and should any balance remain then the balance may be disbursed to the beneficiary/ies. Even Trusts can be designated as beneficiary/ies.

As a guideline, in the event of the death of an employee, the Company may agree to pay the emoluments / proceeds to the appointed beneficiary(ies), subject to the following: i. Where the beneficiary is a minor, the company shall pay to their legal guardian. ii. Where one or some of the primary beneficiaries predecease the employee but other primary beneficiaries remain, the proceeds / emoluments attributable to the deceased primary beneficiary will be shared equally amongst the remaining primary beneficiaries. iii. Contingent beneficiaries will only benefit if no primary beneficiaries remain. In this case, where one or some of the contingent beneficiaries predecease the employee but other contingent beneficiaries remain, the emoluments/proceeds attributable to the deceased contingent beneficiary will be shared equally amongst the remaining contingent beneficiaries. iv. If all beneficiaries pre-decease the employee and no new beneficiary appointment is made, the salary/emolument/ EOSB proceeds may be left until claim is made in the court of competent jurisdiction for disbursement of EOSB claim of the deceased.

If there is an assignment or will executed then the contents of the will with regards to disbursement of the emoluments shall gain precedence over such a beneficiary form. Incase of any conflict between the beneficiary form and the will, the will shall prevail. 

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©Henrietta Newton Martin 2020

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