Tag archives: Pension funds

Jurisdiction of Pension Funds Adjudicator and Financial Services Tribunal over non-participating employers

Photo of Ntokozo NgubanePhoto of Michelle DavidBy Ntokozo Ngubane and Michelle David on Posted in General
On 23 February 2022, the Financial Services Tribunal (FST) reinforced that an employee who does not have a “complaint” as provided for, in section 30A of the Pension Funds Act,1956 (PFA) cannot have recourse under the PFA. The fact of the case are: The applicant was employed as a truck driver by during the period … Continue reading

“Misconduct is tantamount to dishonest conduct,” says the Financial Services Tribunal

Photo of Amina YudaBy Amina Yuda on Posted in General
On 21 September 2021, the Financial Services Tribunal (“Tribunal”) in Royal Bafokeng Platinum Limited & Others v Pension Funds Adjudicator & Others, considered what constitutes “misconduct” as contemplated  in section 37D of the Pension Funds Act, 1956  (“PFA”) and in which instances a member’s benefit may be reduced. In this case, the holding over by … Continue reading

There is no direct access to the Pension Funds Adjudicator

Photo of Ntokozo NgubaneBy Ntokozo Ngubane on Posted in General
The Pension Funds Act, 1956 (“PFA”) is the primary legislation regulating retirement funds. Section 30A of the PFA provides that any person who has a complaint as defined in section 1 “may lodge a written complaint with the retirement fund for consideration by the board, which must be properly considered and responded to within 30 … Continue reading

A pension fund cannot challenge the Pension Fund Adjudicator’s section 37C decision

Photo of Michelle DavidBy Michelle David on Posted in Insurance
A pension fund failed in its application for reconsideration of the Pension Fund Adjudicator’s (PFA) decision to refer the matter back to the fund for reconsideration because, according to the Financial Services Tribunal the fund is not a ‘person aggrieved’ as required by section 230 of the Financial Sector Regulation Act of 2017. The fund … Continue reading

Pension Funds: Section 37D(1)(b)(ii) and Employer requests to withhold member benefits

Photo of Ntokozo NgubanePhoto of Michelle DavidBy Ntokozo Ngubane and Michelle David on Posted in General
In February 2021, the Financial Services Tribunal (“FST”) in L.S Ngqengelele v Afrisam South Africa (Pty) Ltd considered the question of when a fund may withhold and deduct money from a member’s benefit in accordance with section 37D(1)(b)(ii) of the Pension Funds Act (“PFA”). Section 37D(1)(b)(ii) of the PFA, allows a fund to deduct from … Continue reading

Principle of equity cannot override the provisions of the Pension Funds Act

Photo of Michelle DavidBy Michelle David on Posted in General
The principles of equity, despite the equitable jurisdiction of the Pension Funds Adjudicator, cannot override the provisions of the Pension Funds Act (PFA) by permitting a fund to act in contravention of the PFA. The Financial Services Tribunal (Tribunal) has reaffirmed this position. The applicant had been a municipal councillor since 5 August 2016 but … Continue reading

‘De bloedige hand’ principle and its application in s37C pension fund distributions

Photo of Amina YudaPhoto of Michelle DavidBy Amina Yuda and Michelle David on Posted in General
The Pretoria High Court has refused to extend the ‘bloedige hand’ principle in instances where the beneficiary of a death benefit was the child of the deceased’s killer. The ‘bloedige hand’ principle holds that no person who unlawfully causes the death of another may inherit from the deceased. The deceased and his wife were killed … Continue reading

Trustees’ duty to exercise independent discretion on withholding pension benefits

Photo of Michelle DavidBy Michelle David on Posted in General
If an employer requests that provident fund benefits be withheld from an employee due to misconduct, the trustees of the fund must still independently exercise their discretion to satisfy themselves that a sufficient case against the employee has been established, in order to withhold the benefit. The Financial Services Tribunal has again considered the withholding … Continue reading

Skills and training Conduct Standard for pension fund trustees

Photo of Amina YudaBy Amina Yuda on Posted in General
On 10 July 2020, the Financial Sector Conduct Authority (FSCA) published the awaited Conduct Standard prescribing the minimum skills and training requirements for members of the board of trustees of pension funds as contemplated in section 7A(3)(a) of the Pension Funds Act 1956, effective from date of publication. Section 7A(3)(a) requires the trustees of pension … Continue reading

Progressive changes for the retirement fund industry in FSCA draft Conduct Standards

Photo of Amina YudaBy Amina Yuda on Posted in General
On 8 June 2020, the Financial Sector Conduct Authority published three draft conduct standards for public comment to be made by 31 July 2020. The purpose of the draft conduct standards is to regulate the: conditions for living annuities in an annuity strategy; communication of benefit projections to members of pension funds; and conditions for … Continue reading

Equitable Jurisdiction: The Pension Funds Adjudicator cannot make orders disregarding statutory provisions

Photo of Amina YudaPhoto of Michelle DavidBy Amina Yuda and Michelle David on Posted in General
Since 1 April 2019, the Pension Funds Adjudicator has been empowered to apply the principles of equity in dealing with complaints. The concept of an equity jurisdiction has raised concerns in the industry due to its discretionary nature. The concept of ‘equitable jurisdiction’ has been the subject of a recent determination by the Financial Services … Continue reading

Economic relief measures for members of pension funds

Photo of Michelle DavidPhoto of Roxanne van RooyenBy Michelle David and Roxanne van Rooyen on Posted in General
People unable to work due to the pandemic may be looking to access their pension credits in this time of financial hardship. The position in South Africa remains that a member cannot access their pension benefits while they are still in service. Several other countries have however included, as part of their economic relief packages, … Continue reading

Coronavirus and pension funds – South Africa

Photo of Michelle DavidBy Michelle David on Posted in General
In the wake of coronavirus and the possibility of negative impacts on the economy, trustees of pension funds need to focus on their fiduciary duties. Trustees must ensure that they are well-advised on the possible impact of COVID-19 on their investments and seek to mitigate any loss to assets under investment. The mitigation must include … Continue reading

Grace period for pension funds with no remaining members to comply with the Pension Funds Act

Photo of Amina YudaBy Amina Yuda on Posted in General
The Financial Sector Conduct Authority published a communication on 6 March 2020 aimed at pension funds who have no remaining members and still have historical outstanding actuarial valuation report submissions and outstanding annual financial statement submissions. The purpose of the communication is to set out the process to be followed by these pension funds in … Continue reading

PAJA applies to s37C Pension Funds Act decisions

Photo of Amina YudaBy Amina Yuda on Posted in General
In February the high court confirmed that the Promotion of Administrative Justice Act (PAJA) applies to section 37C decisions on the distribution of death benefits made by the boards of retirement funds under the Pension Funds Act. In Mbatha v Transport Sector Retirement Fund and Salt Employee Benefits the court also confirmed the accepted principles … Continue reading

Review of pension fund trustee decisions

Photo of Gennel ChettiarBy Gennel Chettiar on Posted in General
The role of a board of trustees is inextricably linked to the exercise of discretion. The ability to review a decision is rarely considered by a board until a situation arises where a decision they have passed is challenged. The objects and duties of a trustee of a pension fund are contained in sections 7C … Continue reading

FSB can’t challenge the decision of appeal board

Photo of Michelle DavidBy Michelle David on Posted in General
The appeal board established under the Financial Services Board Act overturned a decision made under section 14 of the Pension Fund Act by the Registrar of Pension Funds to permit a transfer of business by a pension fund. The court held that the registrar does not have legal standing to take the appeal board decision on … Continue reading
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