SASOL PENSION FUND
RULES
JANUARY 2006
SASOL PENSION FUND
RULE
DESCRIPTION
1.
INTRODUCTION
1
1.1
Name
1
1.2
Object
1
1.3
Legal Status
1
1.4
Registered Office
1
1.5
Definitions
1
2.
3.
4.
PAGE
FINANCIAL STRUCTURE OF THE FUND
12
2.1
Share Account
12
2.2
Surplus Account
13
2.3
Risk and Expenses Reserve Account
13
2.4
Guarantee Reserve Account
14
2.5
Pensions Account
15
2.6
Employer Surplus Account
16
2.7
Member Surplus Account
17
MEMBERSHIP
18
3.1
Eligibility and Admission
18
3.2
Termination
19
3.3
Temporary Absence
19
RETIREMENT
21
4.1
Normal Retirement
21
4.2
Early Retirement
21
4.3
Early Ill-Health Retirement
22
4.4
Late Retirement
22
4.5
Lump Sum Benefit and Pension Options
22
RULE
DESCRIPTION
PAGE
5.
DEATH
26
5.1
Benefit Payable on Death of a Member
while in Service
26
5.2
Death after retirement
26
5.3
Payment of Pensions to Qualifying Spouses
5.4
and Qualifying Children
28
Payment of Benefit
28
6.
DISABLEMENT
29
7.
WITHDRAWAL FROM SERVICE
30
7.1
Cash Withdrawal Benefit
30
7.2
Deferred Pension
30
7.3
Transfer
32
8.
9.
CONTRIBUTIONS
35
8.1
Member Contributions
35
8.2
Employer Contributions
35
8.3
Payment of Contributions
36
MISCELLANEOUS PROVISIONS REGARDING BENEFITS 38
9.1
Payment of Benefits
38
9.2
Payment other than Specified
40
9.3
Limitation
41
9.4
Benefits Inalienable
42
9.5
Lien over Benefits
43
9.6
Unclaimed Benefits
45
9.7
Greater Benefits and Escalation of Benefits
46
9.8
Transfers from or to other Funds
46
9.9
Currency
50
9.10
Moneys not to revert to Employer
50
RULE
DESCRIPTION
PAGE
9.11
Interpretation of Rules and Disputes
50
9.12
Special Provisions applicable with effect from
9.13
10.
11.
2 October 2000
51
Tracing Costs
52
MANAGEMENT OF THE FUND
53
10.1
Board of Trustees
53
10.2
Meetings of the Board of Trustees
56
10.3
Powers of the Board of Trustees
57
10.4
Principal Officer
61
10.5
Auditor
62
10.6
Books of Account
62
10.7
Actuary
63
10.8
Actuarial Valuations
63
10.9
Bank Account
65
10.10 Records and Safe Custody of Securities
65
10.11 Signing of Documents
65
10.12 Indemnification
66
10.13 Fidelity Insurance
66
10.14 Expenses
66
GENERAL
68
11.1
Proof of Age and Particulars
68
11.2
Beneficiaries are Deferred Creditors
68
11.3
Conditions of Service Unchanged
68
11.4
Registration and Approval
69
11.5
Amendments to the Rules
69
11.6
Members may obtain Copies of Documents
70
11.7
Binding Power of Rules
70
11.8
Admission of Additional Employers
70
RULE
DESCRIPTION
PAGE
11.9
Dissolution of Fund
70
11.10 Withdrawal of an Employer
74
11.11 Transfer or Amalgamation
75
11.12 New Fund or Scheme
76
11.13 Transfer to another Fund in which the Employer
participates
77
ANNEXURE A :
SECTION 37C OF THE ACT
78
ANNEXURE B :
SECTION 19(5) OF THE ACT
81
ANNEXURE C :
SPECIAL PROVISIONS APPLICABLE
TO DEFINED BENEFIT MEMBERS
ANNEXURE D :
85
SPECIAL PROVISIONS APPLICABLE
TO CATEGORY B MEMBERS
102
-11.
INTRODUCTION
1.1
NAME
The SASOL PENSION FUND (hereinafter referred to as "the
FUND") was established with effect from 1 July 1969. These Rules
are the RULES of the FUND including the amendments up to
31 December 2005 and are effective from 1 January 2006.
1.2
OBJECT
The object of the FUND is, in terms of these RULES, to provide
retirement and other benefits for EMPLOYEES and former
EMPLOYEES of the EMPLOYERS, and benefits in the event of their
death.
1.3
LEGAL STATUS
The FUND is a separate legal entity, distinct from its MEMBERS and
shall be capable in law, in its own name, of suing and of being sued,
and of acquiring, holding and alienating property, movable and
immovable.
1.4
REGISTERED OFFICE
The registered office of the FUND is at 1 Sturdee Ave, Rosebank,
Johannesburg.
The
postal
address
Johannesburg, 2000.
1.5
DEFINITIONS
In the RULES where the context so requires:
is
P.O.
Box
5486,
-2words and expressions defined in the ACT and not in the RULES
shall bear the meanings assigned to them in the ACT;
words and expressions importing one gender shall include the other
gender;
words and expressions denoting the singular shall include the plural
and vice versa; and
the following words and expressions shall bear the meanings
assigned to them below:
ACT : the Pension Funds Act, 1956 (Act No. 24 of 1956), as
amended, and the regulations framed thereunder;
ACTUARY : the ACTUARY of the FUND appointed in terms of
Rule 10.7;
ADJUDICATOR : the Pension Funds Adjudicator appointed in terms
of Section 30C(1) of the ACT;
ADJUSTED MEMBER’S SHARE in respect of a MEMBER : his
MEMBER’S SHARE increased by a percentage (if any) as
determined by the TRUSTEES from time to time after consultation
with the ACTUARY, being an apportionment from the investment
reserves;
APPROVED PENSION FUND : a pension fund, other than a
PRESERVATION PENSION FUND, approved as such by the
REVENUE AUTHORITIES for the purposes of these RULES;
APPROVED PROVIDENT FUND : a provident fund, other than a
PRESERVATION PROVIDENT FUND, approved as such by the
REVENUE AUTHORITIES for the purposes of these RULES;
-3-
APPROVED RETIREMENT ANNUITY FUND : a retirement annuity
fund approved as such by the REVENUE AUTHORITIES for the
purposes of these RULES;
AUDITOR : an AUDITOR registered in terms of the Public
Accountants’ and Auditors’ Act, 1991 and appointed by the
TRUSTEES in terms of Rule 10.5;
BENEFICIARY : any person who is entitled to benefits in terms of
these RULES;
BENEFIT POLICY : a separate arrangement providing benefits on
disablement for a MEMBER referred to in Rule 6;
CALCULATION DATE : the date, in terms of the agreed practice of
the FUND, on which the MEMBER’S benefit is calculated on his
retirement, death or leaving SERVICE in terms of Rule 7 or in order
to transfer the MEMBER’S benefit from the FUND in any of the
circumstances contemplated in these RULES;
CATEGORY B MEMBER : a MEMBER other than a DEFINED
BENEFIT MEMBER, who became a MEMBER of the FUND before
1 January 1998; provided that
(a)
the TRUSTEES at the request of the EMPLOYER may decide
that a MEMBER shall be a CATEGORY B MEMBER
notwithstanding the fact that such MEMBER may have joined
the FUND after 1 January 1998;
(b)
a MEMBER who became a MEMBER in terms of Rule 3.1(4)
shall be classified as a CATEGORY B MEMBER; and
-4(c)
the special provisions applicable to CATEGORY B MEMBERS
are set out in Annexure D;
CONVERSION DATE : 1 April 1994;
DEFERRED PENSIONER : a person who in terms of Rule 7.2 or
Rule 7.2 of Annexure C exercised an option to preserve his benefit in
the FUND until payment of his benefit commences;
DEFINED BENEFIT MEMBER : a MEMBER who irrevocably elected
before 30 September 1994 to receive benefits in terms of the RULES
in force immediately prior to 1 April 1994, as set out in Annexure C;
DEPENDANT : a person in respect of whom a MEMBER,
PENSIONER or DEFERRED PENSIONER:
(a)
is legally liable for maintenance;
(b)
is not legally liable for maintenance if such a person is (i)
considered by the TRUSTEES as having been in fact
dependent
on
the
MEMBER,
PENSIONER
or
DEFERRED PENSIONER for maintenance at the time
of the death of the MEMBER, PENSIONER or
DEFERRED PENSIONER;
(ii)
the
spouse
of
the
MEMBER,
PENSIONER
or
DEFERRED PENSIONER, including a party to a
customary union according to Black law and custom or
to a union recognised as a marriage under the tenets
of any Asiatic religion;
(iii)
the child of a MEMBER, PENSIONER or DEFERRED
PENSIONER, including a posthumous child, an
adopted child and an illegitimate child;
-5-
(c)
would have become legally liable for maintenance, had the
MEMBER, PENSIONER or DEFERRED PENSIONER not
died;
EMPLOYEE : an employee of any of the EMPLOYERS, including a
full-time working director who is in receipt of emoluments in addition
to director's fees, but excluding any employee whose employment is
temporary or casual or subject to a limited period;
EMPLOYER : the MAIN EMPLOYER and such participating
employers as may be admitted to the FUND from time to time with
the
consent of
the MAIN EMPLOYER;
provided that any
EMPLOYER who withdraws from the FUND in terms of Rule 11.10
shall simultaneously cease to be an EMPLOYER for the purposes of
the
RULES; in
relation to any EMPLOYEE
or MEMBER,
"EMPLOYER" shall mean the EMPLOYER by whom that person is,
or was last, employed;
FULL-TIME STUDENT : a QUALIFYING CHILD who:
(a)
is between the ages of 18 and 23 years;
(b)
is registered as a student at a recognised secondary or tertiary
educational institution; and
(c)
in the case of a student at a recognised tertiary educational
institution, is registered so as to be able to complete his course
of study within the minimum period prescribed by such
institution;
provided that
-6(i)
the TRUSTEES reserve the right to suspend or stop the
PENSION to the QUALIFYING CHILD if the QUALIFYING
CHILD fails to provide satisfactory proof of attendance at such
institution and progress with their course of study when so
requested by the TRUSTEES;
(ii)
the TRUSTEES, at their discretion and having regard to the
circumstances of a particular case, may continue to pay the
PENSION to a QUALIFYING CHILD after the expiry of the
minimum period referred to in (c) above, subject to the
maximum age of 23 years specified in (a) above continuing to
apply;
FUND ANNIVERSARY : the 31st of December in each year until
31 December 2002. The FUND ANNIVERSARY shall change to the
31st of March in each year after 31 December 2002;
INSURER : an insurer registered in terms of the Long-term
Insurance Act, 1998 to transact life business;
INVESTMENT RETURN : any income (received or accrued)
including, if applicable, interest payable by the EMPLOYER in terms
of Rule 8.3 and capital gains and losses (realised and unrealised) of
the FUND, less an allowance for any tax and such expenses (paid or
accrued) as may be determined by the TRUSTEES; provided that
(a)
such INVESTMENT RETURN may be positive or negative;
(b)
the INVESTMENT RETURN shall be allocated to each
MEMBER’S SHARE on such equitable basis as the
TRUSTEES in their absolute discretion, in consultation with
the ACTUARY and in accordance with the agreed practice of
the FUND, may determine from time to time; and
-7-
(c)
where a MEMBER’S SHARE is, and/or contributions paid by
or in respect of a MEMBER are, invested in a selected
portfolio or portfolios, the INVESTMENT RETURN relating to
such MEMBER’S investment within each portfolio shall be
allocated to such MEMBER’S benefit within the portfolio;
MAIN EMPLOYER : Sasol Limited;
MEMBER : a person who has been admitted to membership in terms
of Rule 3 as long as he remains a MEMBER in terms of these
RULES;
MEMBER'S SHARE in respect of a MEMBER : an amount determined
in accordance with Rule 2.1, increased or decreased by the
INVESTMENT RETURN until the CALCULATION DATE;
MINIMUM INDIVIDUAL RESERVE : the Minimum Individual
Reserve for a MEMBER as defined in the ACT and as determined by
the ACTUARY using methods and assumptions prescribed by the
REGISTRAR by notice in the Government Gazette;
NOMINEE : a person, other than a DEPENDANT, who has been
nominated in writing by a MEMBER, PENSIONER or DEFERRED
PENSIONER as entitled to receive all or part of the death benefits
provided by the FUND in terms of Rule 5;
NORMAL RETIREMENT AGE : the age of 60 years for all group
management staff as determined by the EMPLOYER and age 65
years for all other MEMBERS;
NORMAL RETIREMENT DATE : the first day of the month
succeeding the month in which the MEMBER attains his NORMAL
RETIREMENT AGE;
-8-
PENSION : an annual PENSION payable for the lifetime of the
BENEFICIARY or, in the case of a PENSION payable in respect of a
child, the annual PENSION payable for as long as such child
remains a QUALIFYING CHILD;
PENSIONABLE EMOLUMENTS : the MEMBER'S basic annual
salary or wages and any other regular amounts which are regarded
as pensionable by the TRUSTEES at the request of the
EMPLOYER, subject to Rule 8.1(4);
PENSIONABLE SERVICE :
(a)
the uninterrupted SERVICE with an EMPLOYER as a
MEMBER of the FUND or as a member of a PREVIOUS
FUND; plus
(b)
any period in which the MEMBER worked for the EMPLOYER
or elsewhere and which the EMPLOYER recognises for
pension
purposes
and
in
respect
of
which
pension
contributions are or were made to the FUND.
For the purposes of the FUND the transfer of an EMPLOYEE from
one EMPLOYER to another who participates in the FUND shall not
be regarded as a break in PENSIONABLE SERVICE;
PENSIONER : a MEMBER who has retired and who is in receipt of a
PENSION payable from the FUND in accordance with Rule 4, Rule 6
or Rule 7.2(3);
PRESERVATION PENSION FUND : an APPROVED PENSION
FUND recognised as a preservation fund, subject to the conditions
set out by the REVENUE AUTHORITIES from time to time;
-9-
PRESERVATION
PROVIDENT
FUND
:
an
APPROVED
PROVIDENT FUND recognised as a preservation fund, subject to
the conditions set out by the REVENUE AUTHORITIES from time to
time;
PREVIOUS FUND : the Sasol Group Management Pension Fund
and the Sasol Pension Fund 1980;
QUALIFYING CHILD of a MEMBER or PENSIONER : the child
(including an adopted child, an illegitimate child, a step-child or a
posthumous child) who was financially dependent on the MEMBER
or PENSIONER immediately before his death (or in the case of a
posthumous child would have become financially dependent on the
MEMBER or PENSIONER but for the death of such person);
provided that such child is the product of a relationship recognised
by the TRUSTEES and specifically excluding a child who would
otherwise qualify in terms of the description set out above if such
child:
(a)
was born more than nine months after the PENSIONER
retired; or
(b)
was adopted or became a step-child after the MEMBER’S
NORMAL RETIREMENT DATE or the date of the MEMBER’S
actual retirement, if earlier;
and provided further that such child is
(i)
unmarried; and
(ii)
under the age of
- 10 (aa)
18 years; or
(bb)
21 years if physically or mentally disabled; or
(cc)
23 years if a FULL-TIME STUDENT;
QUALIFYING SPOUSE : a person who, at the date of the MEMBER’S
death or the PENSIONER’S retirement, was either
(a)
the legal spouse of the MEMBER or the PENSIONER; or
(b)
the MEMBER’S or PENSIONER’S partner,
(i)
in a union according to customary law or in a union
recognised as a marriage under any religion; or
(ii)
in a relationship in respect of which the TRUSTEES, in
their sole discretion, is satisfied that the partners, who
may be persons of the same or the opposite sex, have
co-habited and have shared a reciprocal duty of
support as if they were married and where the
MEMBER
or
PENSIONER
has
provided
the
TRUSTEES, in their sole discretion, with proof thereof;
provided that
(aa)
the MEMBER or PENSIONER has notified the FUND of the
existence of such a QUALIFYING SPOUSE prior to the date
upon which a benefit becomes due from the FUND;
(bb)
the MEMBER or the PENSIONER supplies the FUND with
sufficient proof of the continued existence of the relationship on
a yearly basis;
- 11 -
(cc)
the TRUSTEES may direct that more than one person may be
regarded as a QUALIFYING SPOUSE. In such case, the total
benefits payable to such persons shall be equal to the benefit
which would have been payable to one QUALIFYING
SPOUSE; and
(dd)
in the case of a MEMBER who died or a PENSIONER who
retired prior to 1 November 2001, “QUALIFYING SPOUSE”
shall mean a “Qualifying Spouse” as defined in terms of the
RULES as they applied prior to 1 November 2001.
Notwithstanding any other provision contained in this definition, the
TRUSTEES may, in their sole discretion, accept proof of a
relationship referred to in (i) and (ii) above, after the date on which
the benefit becomes due from the FUND from a person other than
the MEMBER or PENSIONER;
REGISTRAR : the Registrar of Pension Funds appointed in terms of
the Financial Services Board Act, 1990 (Act No. 97 of 1990);
REVENUE AUTHORITIES : the South African Revenue Service and
any other statutory revenue authority whose approval of the FUND
has been obtained;
RULES : these RULES as amended from time to time;
SERVICE : SERVICE as an EMPLOYEE of one or more of the
EMPLOYERS;
SURPLUS APPORTIONMENT DATE : 31 December 2002.
TRUSTEES : the Board of TRUSTEES constituted in terms of
Rule 10.1 to control the FUND.
- 12 2.
FINANCIAL STRUCTURE OF THE FUND: FUND ACCOUNTS
The TRUSTEES shall establish such accounts as are allowed by
legislation, including the following:
2.1
Share Account
(1)
The Share Account shall comprise all the MEMBERS'
SHARES and the following credits shall be recorded in this
account:
(a)
an opening balance comprising the MEMBER’S
actuarial interest in the FUND at the CONVERSION
DATE, if any, as determined by the ACTUARY after
taking into account the benefit structure and the
funding method of the FUND as it applied prior to that
date
and
taking
into
account
the
limit
on
PENSIONABLE EMOLUMENTS;
(b)
the MEMBER’S contributions received by the FUND
after the CONVERSION DATE in terms of Rule 8.1;
(c)
the
EMPLOYER'S
contributions
made
after
the
CONVERSION DATE on behalf of the MEMBER in
terms of Rule 8.2(1)(a);
(d)
transfer values received after the CONVERSION DATE
in respect of a MEMBER in terms of Rule 9.8(1)(a).
(2)
The Share Account shall be debited with:
(a)
any lump sum benefit paid to the MEMBER in terms of
Rule 4.5(1) and any transfers to the Pensions Account
and/or to an INSURER of the balance of the
MEMBER’S SHARE on his retirement in terms of
Rule 4;
- 13 -
(b)
2.2
benefit payments in terms of Rule 5 or Rule 7.
Surplus Account
(1)
The Surplus Account shall be credited with the actuarial
surplus of the FUND as at the SURPLUS APPORTIONMENT
DATE.
(2)
The Surplus Account shall be increased or decreased by the
INVESTMENT RETURN earned on the assets in this account.
(3)
The assets in the Surplus Reserve Account, less any costs
and expenses specifically arising as a result of the FUND’S
compliance with the Pension Funds Second Amendment Act,
Act No. 39 of 2001, shall be apportioned in terms of
Section 15B of the ACT.
2.3
Risk and Expenses Reserve Account
(1)
The Risk and Expenses Reserve Account shall be credited
with
(a)
the amount recommended by the ACTUARY as the
amount required in order to meet the ongoing cost of
providing the risk benefits payable in terms of these
RULES;
(b)
any EMPLOYER contributions in terms of Rule 8.3 of
Annexure C and Rule 8.2(1)(b) of Annexure D which
are allocated towards the cost of risk benefits;
(c)
any reinsurance payment made to the FUND by the
INSURER;
- 14 -
(d)
contributions
by
the
EMPLOYER
in
terms
of
Rule 10.14(1).
(2)
The Risk and Expenses Reserve Account shall be increased
or decreased by the INVESTMENT RETURN earned on the
assets in this account.
(3)
The Risk and Expenses Reserve Account shall be used
(a)
to
meet
any premiums
payable
in
respect
of
reinsurance in terms of Rule 9.3;
(b)
to meet the cost of any payment made by the
TRUSTEES in terms of Rule 9.3;
(c)
towards meeting the expenses of the FUND referred to
in Rule 10.14.
2.4
Guarantee Reserve Account
(1)
The Guarantee Reserve Account shall be credited with
(a)
the amount recommended by the ACTUARY as the
amount required to meet the FUND’S liability to pay
benefits to the DEFINED BENEFIT MEMBERS in
terms of Annexure C;
(b)
any amount transferred from the Employer Surplus
Account in terms of Rule 2.6(3)(a).
(2)
The Guarantee Reserve Account shall be increased or
decreased by the INVESTMENT RETURN earned on the
assets in this account.
- 15 -
(3)
The Guarantee Reserve Account shall be debited with
(a)
the amount needed to provide the benefits promised to
DEFINED BENEFIT MEMBERS in terms of these
RULES;
(b)
any amount transferred to the Employer Surplus
Account on the recommendation of the ACTUARY.
2.5
Pensions Account
(1)
The Pensions Account shall be credited with
(a)
the amount recommended by the ACTUARY as the
amount required to meet the liability of the FUND in
respect of PENSIONS in payment from the FUND as at
the SURPLUS APPORTIONMENT DATE, taking into
consideration increases in PENSIONS in terms of
Rule 9.7(2);
(b)
any amount required to be credited in terms of
Rule 4.5(2)(b)(ii),
Rule 4.5(2)(c)(ii)(bb)
or
Rule
4.4(1)(b)(ii) of Annexure C;
(c)
any contributions by the EMPLOYER in terms of
Rule 8.2(2);
(d)
any amount transferred from the Employer Surplus
Account in terms of Rule 2.6(3)(a).
(2)
The Pensions Account shall be increased or decreased by the
INVESTMENT RETURN earned on the assets in this account.
- 16 -
(3)
The Pensions Account shall be debited with PENSIONS
payable to PENSIONERS and other BENEFICIARIES in
terms of the RULES.
2.6
Employer Surplus Account
(1)
The Employer Surplus Account shall be credited with
(a)
the amount, if any, apportioned to the EMPLOYER in
terms of a surplus apportionment scheme approved by
the REGISTRAR in terms of Section 15B of the ACT;
(b)
any amount which is required to be transferred to such
an account in terms of an application made in
accordance with Section 15F of the ACT and approved
by the REGISTRAR;
(c)
any amount transferred from the Guarantee Reserve
Account in terms of Rule 2.4(3)(b);
(d)
(2)
any amount credited in terms of Rule 10.8(3).
The amount standing to the credit of the Employer Surplus
Account
shall
be
increased
or
decreased
by
the
INVESTMENT RETURN earned by the assets within this
account.
(3)
The amount standing to the credit of the Employer Surplus
Account
(a)
shall be transferred to the Guarantee Reserve Account
and if necessary to the Pensions Account from time to
time as recommended by the ACTUARY;
- 17 -
(b)
may be used in the manner and for any of the
purposes set out in Section 15E of the ACT.
2.7
Member Surplus Account
(1)
The Member Surplus Account shall be credited with
(a)
any amount allocated in terms of Section 15B of the
ACT to be used for the benefit of MEMBERS in terms
of a surplus apportionment scheme approved by the
REGISTRAR;
(b)
any amount allocated to be used for the benefit of
MEMBERS in terms of Section 15C of the ACT.
(2)
The amount standing to the credit of the Member Surplus
Account
shall
be
increased
or
decreased
by
the
INVESTMENT RETURN earned by the assets within this
account.
(3)
The amount standing to the credit of the Member Surplus
Account may be used in the manner and for any of the
purposes set out in Section 15D of the ACT.
- 18 3.
MEMBERSHIP
3.1
Eligibility and Admission
(1)
Each person who was a MEMBER of the FUND immediately
prior to 1 January 2006 shall, subject to the provisions of the
RULES, remain a MEMBER of the FUND.
(2)
Each EMPLOYEE who is not referred to in (1) above shall
qualify for membership of the FUND except where otherwise
determined in terms of an industrial or similar agreement and
shall, as a condition of employment, become a MEMBER of
the FUND from the day on which he becomes an
EMPLOYEE.
(3)
An EMPLOYEE who becomes a MEMBER in terms of (2)
above shall produce such evidence as to the state of his
health as the TRUSTEES may require, at the expense of the
FUND. Such MEMBER shall, if in the TRUSTEES' opinion he
is not in good health, be subject to such restrictions in his
benefits as the TRUSTEES, acting on the advice of the
ACTUARY, shall determine.
(4)
On 1 April 2001 each EMPLOYEE who:
(a)
was a member of the Polifin Retirement Fund; and
(b)
was in receipt of a disablement income benefit from a
separate
disability
arrangement
set
EMPLOYER; and
(c)
was eligible for membership of the FUND;
up
by
the
- 19 became a MEMBER of the FUND at that date. Each such
MEMBER’S full benefit entitlement at the date of transfer was
transferred to the FUND and applied under his MEMBER’S
SHARE. MEMBERS who became MEMBERS in accordance
with the provisions of this Rule 3.1(4) shall not be eligible for the
benefits set out in Rule 6 of the main body of the RULES or in
Section 2 of Annexure D.
(5)
If a MEMBER transfers to another APPROVED PENSION
FUND or APPROVED PROVIDENT FUND in any of the
circumstances envisaged in these RULES and such transfer is
subject to the provisions of Section 14 of the ACT, then it is
specifically provided that with effect from the date on which he
becomes a member of such fund, contributions in terms of
Rule 8 shall cease and in the event of his death or disablement,
prior to transfer of his benefit in terms of these RULES from the
FUND to such other fund, the risk benefits provided in terms of
these RULES shall not be payable.
3.2
3.3
Termination
(1)
Unless otherwise provided for in the RULES, a MEMBER
shall not be permitted to withdraw from membership while he
remains in SERVICE.
(2)
A Member who has left SERVICE for any reason and has
received all the benefits which may be due to him in terms of
these RULES shall cease to be a MEMBER.
Temporary Absence
(1)
With full remuneration
Membership of the FUND and the benefits and contributions
payable shall not be affected by a MEMBER'S absence from
SERVICE while he is in receipt of his full normal remuneration
from the EMPLOYER.
- 20 (2)
Approved temporary absence
(a)
When a MEMBER is on leave with less than full normal
remuneration,
his
MEMBER'S
SHARE
shall
be
credited with any contributions actually paid by the
MEMBER in terms of Rule 8.1(1) and/or by the
EMPLOYER in terms of Rule 8.2(1)(a) during such
period of absence.
(b)
If a MEMBER who is on approved temporary leave,
becomes disabled or dies during such period, the
death benefits referred to in Rule 5.1 and the disability
benefit referred to in Rule 6 of Annexure D shall
become payable. The benefit shall be calculated as if
the death or disability occurred immediately prior to the
date on which the temporary absence commenced.
(3)
Reinstatement of membership upon return to Service
If a MEMBER leaves SERVICE and within twelve months
returns to SERVICE and before any benefit has been paid to
or in respect of him by the FUND, or if a benefit has been paid
to him and it is paid back to the FUND together with interest at
a rate determined by the TRUSTEES, he shall immediately
become a MEMBER again and his MEMBER’S SHARE shall
be reinstated.
- 21 4.
RETIREMENT
4.1
Normal Retirement
(1)
If a MEMBER retires from SERVICE on his NORMAL
RETIREMENT DATE he shall receive a PENSION vesting on
his NORMAL RETIREMENT DATE, secured by utilising his
ADJUSTED MEMBER'S SHARE, less the amount of any
lump sum benefit paid in terms of Rule 4.5(1), based on a
conversion factor applicable to his NORMAL RETIREMENT
AGE, as decided by the TRUSTEES acting on the advice of
the ACTUARY and subject to the provisions of Rule 4.5(2).
(2)
The PENSION shall be deemed to commence on the
MEMBER'S NORMAL RETIREMENT DATE and the first
payment of the PENSION shall be due at the end of such
month.
4.2
Early Retirement
(1)
If a MEMBER retires from SERVICE in the ten years prior to
his NORMAL RETIREMENT DATE, or 15 years in the case of
a
female
MEMBER
who
entered
SERVICE
prior
to
3 March 1985 and whose NORMAL RETIREMENT AGE prior
to 1 July 2001 was age 60 years, such MEMBER shall receive
a PENSION vesting on the first day of the following month
secured by utilising his ADJUSTED MEMBER'S SHARE, less
the amount of any lump sum benefit paid in terms of
Rule 4.5(1), based on a conversion factor applicable to his
age at the actual date of such early retirement, as decided by
the TRUSTEES acting on the advice of the ACTUARY,
subject to the provisions of Rule 4.5(2).
- 22 (2)
The PENSION shall commence on the first day of the month
following the MEMBER’S actual retirement and the first
payment of the PENSION shall be due at the end of such
month.
4.3
Early Ill-Health Retirement
A MEMBER who leaves SERVICE due to ill-health but who is not
entitled to benefits in terms of Rule 6 shall be entitled to benefits in
terms of Rule 7.
4.4
Late Retirement
(1)
Subject to the consent of the EMPLOYER, a MEMBER who
has reached his NORMAL RETIREMENT DATE may remain in
SERVICE, but no further contributions by or on behalf of the
MEMBER shall be made.
(2)
Upon retirement after his NORMAL RETIREMENT DATE a
MEMBER shall receive a PENSION vesting on the first day of
the following month secured by utilising his ADJUSTED
MEMBER'S SHARE, less the amount of any lump sum benefit
paid in terms of Rule 4.5(1), based on a conversion factor
applicable to his age at the actual date of such late retirement
as determined by the TRUSTEES acting on the advice of the
ACTUARY, subject to the provisions of Rule 4.5(2). The first
payment of the PENSION shall be due at the end of the
month following the MEMBER’S actual retirement.
4.5
Lump Sum Benefit and Pension Options
(1)
At the request of a retiring MEMBER made at the time of
retirement, the TRUSTEES shall commute for a MEMBER up
- 23 to one-third of his ADJUSTED MEMBER’S SHARE (or up to
the whole thereof if allowed by income tax legislation) as a
lump sum, payable on the first day of the month immediately
following the MEMBER'S retirement from SERVICE.
The
balance of the ADJUSTED MEMBER'S SHARE, if any, shall
be made available to secure a PENSION in terms of the
relevant provisions of the RULES.
(2)
A retiring MEMBER who becomes eligible in terms of these
RULES to receive a PENSION, may elect either
(a)
that his PENSION be purchased as an annuity or
annuities from an INSURER in terms of Rule 4.5(3);
or
(b)
that his PENSION be paid from the FUND, in which
case
(i)
the terms and conditions of these RULES shall
apply unaltered;
and
(ii)
the PENSION payable from the FUND in
respect of him, shall be allocated to the
Pensions Account in terms of Rule 2.5(1)(b) and
shall be applied in terms of Rule 2.5(3);
or
(c)
that
- 24 (i)
a portion of his PENSION be purchased as an
annuity or annuities from an INSURER and that
the provisions of Rule 4.5(3) shall apply mutatis
mutandis to that portion of the PENSION;
and
(ii)
the remaining portion of his PENSION be paid
from the FUND and that accordingly
(aa)
the terms and conditions of these RULES
shall apply unaltered;
and
(bb)
the portion of his PENSION to be paid
from the FUND shall be allocated to the
Pensions
Account
in
terms
of
Rule 2.5(1)(b) and shall be applied in
terms of Rule 2.5(3).
It is specifically provided that the provisions of this Rule are
subject to the requirements of the REVENUE AUTHORITIES.
(3)
If a retiring MEMBER elects the option provided for in
Rule 4.5(2)(a) or Rule 4.5(2)(c)(i), such PENSION shall be
purchased as an annuity or annuities in his name from an
INSURER chosen by him.
The terms and conditions
applicable to such annuity or annuities, including options
elected by the MEMBER and the determination of any
benefits arising on his death, shall be agreed between the
MEMBER and the INSURER and shall be set out in writing by
the INSURER; provided that:
- 25 -
(a)
the annuity or annuities so purchased shall be
compulsory, non-commutable, non-assignable and
payable for life;
(b)
the purchase of more than one annuity shall be subject
to
any
further
requirements
of
the
REVENUE
AUTHORITIES; and
(c)
on the purchase of an annuity or annuities in terms of
this Rule, the FUND shall have no further liability in
respect of the MEMBER, such liability resting with the
INSURER from whom the annuity or annuities are
purchased; provided that in the case of a MEMBER
who elects the option provided for in Rule 4.5(2)(c), the
FUND shall have no further liability in respect of that
part
of
the
PENSION
Rule 4.5(2)(c)(i).
purchased
in
terms
of
- 26 5.
DEATH
5.1
Benefit Payable on Death of a Member while in Service
(1)
Upon the death of a MEMBER while in SERVICE, subject to
the provisions of Rule 10.3(f), his ADJUSTED MEMBER’S
SHARE shall become payable to his BENEFICIARIES as an
annuity or annuities; provided that the person or persons
entitled to the benefit may commute the whole or a part of
such benefit for a lump sum.
(2)
An annuity which becomes payable in terms of Rule 5.1(1)
shall be purchased by the FUND in the name of the person
entitled to the benefit from an INSURER, and thereafter the
FUND shall have no further liability in respect of the benefit
payable to such person, such liability resting with the
INSURER from whom such annuity or annuities are
purchased. The annuity or annuities so purchased shall be
compulsory, non-commutable and non-assignable, payable
for life and the purchase shall be subject to any further
requirements of the REVENUE AUTHORITIES if more than
one annuity is purchased.
5.2
Death after retirement
On the death of a PENSIONER who retired in terms of the provisions
of Rules 4.1 to 4.4, 6 or 7.2(3), his PENSION shall cease as
provided for in Rule 9.1(3). The following benefits shall be payable:
(a)
a lump sum of R2 000, or such other amount as decided by
the TRUSTEES from time to time, subject to the maximum
amount permitted in terms of income tax legislation;
- 27 (b)
a PENSION to his QUALIFYING SPOUSE, equal to 75% of
the
PENSION
payable
immediately
prior
to
the
commencement of the PENSION to the QUALIFYING
SPOUSE;
(c)
a PENSION to the QUALIFYING CHILDREN of the
PENSIONER, equal to a percentage of the PENSIONER'S
PENSION as described in (b) above, in accordance with the
following table:
Number of
Percentage of
QUALIFYING
PENSIONER'S PENSION
CHILDREN
described in (b) above
1
10,0%
2
15,0%
3
20,0%
4 or more
25,0%
If there is no QUALIFYING SPOUSE, the PENSION to the
QUALIFYING CHILDREN shall be double the PENSION that
would have been payable if there had been a QUALIFYING
SPOUSE;
(d)
after the last payment of a PENSION to a PENSIONER,
QUALIFYING SPOUSE and/or QUALIFYING CHILDREN has
been made, the TRUSTEES shall deduct the total amount
paid to the PENSIONER, his QUALIFYING SPOUSE and
QUALIFYING CHILDREN, including any amount which may
have been paid in a lump sum and, if applicable, that part of
the PENSION purchased as an annuity or annuities in terms
of Rule 4.5(2)(c)(i), from the amount of the ADJUSTED
MEMBER’S SHARE. Should there be any positive difference,
such positive difference shall be paid in accordance with
Rule 5.4.
- 28 -
5.3
Payment of Pensions to Qualifying Spouses and Qualifying
Children
(1)
If the deceased PENSIONER leaves more than one
QUALIFYING SPOUSE, the TRUSTEES shall decide to
which of them and in what proportion the benefits shall be
paid; provided that the total QUALIFYING SPOUSES'
PENSIONS payable shall not be more than the PENSION that
would have been payable had there only been one
QUALIFYING SPOUSE.
(2)
PENSIONS in respect of the QUALIFYING CHILDREN of a
PENSIONER shall be paid to or for the benefit of such
QUALIFYING
CHILDREN in
such
proportions as the
TRUSTEES may decide.
5.4
Payment of Benefit
Payment of any death benefit which is not expressed to be paid to a
particular person shall be made in terms of Section 37C of the ACT.
(The contents of Section 37C of the ACT are contained in
Annexure A to the RULES).
- 29 6.
DISABLEMENT
Should a MEMBER leave SERVICE as a result of injury or illness and
receive a disability benefit from the BENEFIT POLICY, such MEMBER shall
receive a PENSION vesting on the first day of the following month. Such
PENSION shall be secured by utilising his ADJUSTED MEMBER’S
SHARE, based on a conversion factor applicable to his age at the date of
such early retirement, as decided by the TRUSTEES acting on the advice
of the ACTUARY and subject to the provisions of Rules 4.5(2) and 9.5. If
such PENSION does not exceed the amount which, in terms of income tax
legislation, may be commuted in full, the MEMBER shall not receive the
PENSION but shall have paid to him an amount equal to his ADJUSTED
MEMBER’S SHARE.
- 30 7.
WITHDRAWAL FROM SERVICE
7.1
Cash Withdrawal Benefit
(1)
If a MEMBER leaves SERVICE prior to his NORMAL
RETIREMENT DATE in circumstances which are not
specifically provided for elsewhere in these RULES, an
amount equal to the ADJUSTED MEMBERS' SHARE shall
become payable, subject to the conditions of Rule 9.5.
(2)
The benefit in terms of this Rule shall be paid to the MEMBER
as a lump sum. Subject to the provisions of Rule 9.5(3)(a),
payment shall be made as soon as possible after the date of
his leaving SERVICE.
(3)
Instead of receiving the benefit entirely as a lump sum, the
MEMBER may transfer all or, subject to (b) below, part of the
benefit
to
another
PRESERVATION
APPROVED
PENSION
PENSION
FUND,
FUND,
APPROVED
PROVIDENT FUND or APPROVED RETIREMENT ANNUITY
FUND; provided that
(a)
in the case of transfer to an APPROVED PROVIDENT
FUND, the amount so transferred shall be less any tax
payable thereon; and
(b)
transfer to a PRESERVATION PENSION FUND is
subject
to
the
requirements
of
the
REVENUE
AUTHORITIES as specified from time to time.
7.2
Deferred Pension
(1)
If a MEMBER leaves SERVICE after at least 10 years of
FUND membership under the conditions described in
- 31 Rule 7.1(1) and he prefers not to take a part of his benefit in
cash, he will become entitled to a benefit equal to his
ADJUSTED MEMBER'S SHARE, which will be preserved in
terms of the provisions below.
(2)
Where a MEMBER preserves his benefit in terms of (1)
above,
such
MEMBER
will
become
a
DEFERRED
PENSIONER and his benefits shall be determined as follows:
(a)
the ADJUSTED MEMBER'S SHARE shall form the
opening balance of his Share Account at the date of
withdrawal from SERVICE;
(b)
no further contributions will be payable by or on behalf
of the DEFERRED PENSIONER after the date of his
withdrawal from SERVICE;
(c)
the
ADJUSTED
increased
or
MEMBER’S
decreased
by
SHARE
the
shall
be
INVESTMENT
RETURN until the CALCULATION DATE;
(d)
the DEFERRED PENSIONER shall only be entitled to
benefits provided for under this Rule 7.2.
(3)
Upon the DEFERRED PENSIONER’S attainment of a
retirement age in terms of Rule 4, he shall receive a
PENSION vesting on the first day of the following month.
Such DEFERRED PENSIONER shall be entitled to retirement
benefits in terms of Rule 4 and shall, subject to the provisions
of Rule 4.5(2), become a PENSIONER in terms of the RULES
of the FUND.
- 32 (4)
On the death of a DEFERRED PENSIONER before the
PENSION in terms of (3) above becomes payable, his
ADJUSTED MEMBER'S SHARE, increased or decreased by
the INVESTMENT RETURN until the CALCULATION DATE,
shall be payable.
7.3
Transfer
(1)
If a MEMBER is transferred abroad he shall remain a
MEMBER of the FUND for the first three years or the
initial period of transfer and contributions by both the
MEMBER and the EMPLOYER as set out in Rule 8 of the
main body of the RULES or, in the case of a DEFINED
BENEFIT MEMBER, as set out in Rule 8.1 of Annexure C
shall be payable; provided that:
(a)
if such MEMBER’S transfer is lengthened for a
further period or to a period of longer than three
years and the MEMBER starts to contribute to
an
overseas
arrangement
for
retirement
funding; or
(b)
if such MEMBER is compelled to contribute
towards
an
overseas
arrangement
for
retirement funding;
the contributions by and in respect of the MEMBER shall
cease and the MEMBER shall be regarded as being a
DEFERRED PENSIONER on the date on which
contributions to the FUND cease.
(2)
If a MEMBER referred to in Rule 7.3(1) returns to South
Africa, the MEMBER shall rejoin the FUND as a
- 33 contributing MEMBER of the FUND. In the case of a
MEMBER other than a DEFINED BENEFIT MEMBER,
his ADJUSTED MEMBER’S SHARE shall be reinstated
as his MEMBER’S SHARE and in the case of a DEFINED
BENEFIT MEMBER his PENSIONABLE SERVICE shall
be reinstated at the date of return; provided that any
period for which no contributions were made shall not be
regarded as PENSIONABLE SERVICE.
(3)
If such MEMBER’S service is terminated during his
overseas transfer, he shall be entitled to
(a)
in the case of a MEMBER who is not a
DEFINED BENEFIT MEMBER, the benefit
referred to in Rule 7.1 of the main body of the
RULES, or if he qualifies, in terms of Rule 7.2 of
the main body of the RULES;
or
(b)
in the case of a DEFINED BENEFIT MEMBER,
the
benefit
referred
to
in
Rule 7.1
of
Annexure C, or if he qualifies, in terms of
Rule 7.2 of Annexure C;
and the provisions of Rule 7 of the main body of the
RULES or Rule 7 of Annexure C, as applicable, shall
apply to the payment of his benefit.
(4)
If such MEMBER dies during his overseas transfer, a
benefit shall be payable equal to:
- 34 (a)
in the case of a MEMBER by whom and in
respect of whom contributions are made in
accordance with Rule 8 of the main body of the
RULES or who contributes in terms of Rule 8 of
Annexure C, the benefit referred to
(i)
in the case of a MEMBER who is not
a DEFINED BENEFIT MEMBER, in
Rule 5.1 of the main body of the
RULES; or
(ii)
in the case of a MEMBER who is a
DEFINED BENEFIT MEMBER, in
terms of Rule 5.1 of Annexure C;
or
(b)
in the case of a MEMBER who is not a
DEFINED BENEFIT MEMBER and is regarded
as a DEFERRED PENSIONER, his ADJUSTED
MEMBER’S SHARE;
or
(c)
in the case of a DEFINED BENEFIT MEMBER
who
is
regarded
as
a
DEFERRED
PENSIONER, the benefit in accordance with
Rule 7.2.4 of Annexure C.
- 35 8.
CONTRIBUTIONS
8.1
Member Contributions
(1)
Each
MEMBER
RETIREMENT
who
DATE
has
shall
not
reached
contribute
NORMAL
throughout
his
SERVICE an amount equal to 7,5% of his PENSIONABLE
EMOLUMENTS to the FUND.
(2)
Contributions are deducted monthly from the MEMBER'S
remuneration.
(3)
A MEMBER may make additional contributions to the FUND
on an annual or monthly basis, at a rate and frequency
agreed to with the TRUSTEES in order to secure greater
benefits or in respect of a period of past service.
The
additional contributions shall be credited to his MEMBER’S
SHARE.
(4)
If a MEMBER'S PENSIONABLE EMOLUMENTS are reduced
for reasons other than a change in his work status from fulltime to part-time service, he may choose to continue
contributions based on his PENSIONABLE EMOLUMENTS
immediately prior to such reduction; provided that the
MEMBER notifies the TRUSTEES in writing of his intention
within one month of the date on which the MEMBER is
informed of such reduction. In this case such PENSIONABLE
EMOLUMENTS shall be regarded as the MEMBER'S
PENSIONABLE EMOLUMENTS for the purposes of the
RULES.
8.2
Employer Contributions
(1)
The EMPLOYER shall contribute the following amounts to the
FUND in respect of each MEMBER in its SERVICE who has
not reached NORMAL RETIREMENT DATE:
- 36 -
(a)
7,5%
of
each
MEMBER'S
PENSIONABLE
EMOLUMENTS which shall be applied towards the
MEMBER’S SHARE;
(b)
2% of the lesser of each MEMBER’S PENSIONABLE
EMOLUMENTS and an amount determined in respect
of the MEMBER by the EMPLOYER from time to time
and notified in writing to the TRUSTEES; and
(c)
the balance of the contribution of 2,1% of each
MEMBER’S PENSIONABLE EMOLUMENTS which is
not applied to provide additional death benefits.
(2)
The
EMPLOYER
shall
contribute
such
amounts
as
determined by the TRUSTEES from time to time, as may be
necessary to eliminate an actuarial shortfall in the Pensions
Account which is not met from the Employer Surplus Account
in terms of Rule 2.6(3)(a), the amount of which shall be
calculated by the ACTUARY.
8.3
Payment of Contributions
Contributions are payable to the FUND monthly, in arrears.
The EMPLOYER shall deduct the MEMBER’S contributions in terms
of Rule 8.1 from the MEMBER’S remuneration at the end of each
pay-period. The first deduction shall be that at the end of the payperiod during which the MEMBER became a MEMBER in terms of
the
RULES.
These
contributions
and
the
EMPLOYER'S
contributions in terms of Rule 8.2 shall be paid over to the FUND
within seven days of the end of the calendar month to which such
contributions relate, subject to the provisions of Section 13A of the
- 37 ACT. If contributions are not paid to the FUND as required in terms
of the ACT, the EMPLOYER shall be required to pay late payment
interest at the rate prescribed by legislation. Any such interest shall
be included in the INVESTMENT RETURN.
- 38 9.
MISCELLANEOUS PROVISIONS REGARDING BENEFITS
9.1
Payment of Benefits
(1)
Amounts payable in respect of a MEMBER or PENSIONER
during his lifetime shall be paid to such MEMBER or
PENSIONER.
(2)
PENSIONS are payable monthly.
(3)
The first PENSION payment shall be due at the end of the
month in which:
(a)
a MEMBER retires or dies; or
(b)
a PENSIONER dies; and
the last payment shall be that due at the end of the month
preceding the month in which:
(a)
a PENSIONER dies;
(b)
the QUALIFYING SPOUSE dies in the case of a
QUALIFYING SPOUSE'S PENSION;
(c)
a QUALIFYING CHILD ceases to be a QUALIFYING
CHILD.
(4)
Whenever
a
PENSION
commences,
is
changed
or
terminates, payments due at the end of the month concerned
will be made based on the circumstances which are
applicable at that date.
- 39 (5)
The TRUSTEES shall be entitled to request proof to their
satisfaction as to the identity and right of any BENEFICIARY
to any benefit before payment of any benefit is made to such
BENEFICIARY. Each person in receipt of a PENSION from
the FUND shall provide such evidence of his survival or
continued eligibility as the TRUSTEES may require. If such
evidence is not produced, the TRUSTEES may direct that
payment of the PENSION be suspended until such evidence
is produced.
(6)
When a benefit is payable to any BENEFICIARY, such benefit
shall be paid over by means of electronic transfer to the bank
account of the BENEFICIARY held at a banking institution
registered in terms of the Banks Act, 1990 (Act No. 94 of
1990), as amended, or, if such account does not exist, or if
the BENEFICIARY neglected to provide the FUND with the
particulars thereof, such benefit shall be paid by means of a
cheque
or
cheques
which
shall
be
sent
to
the
BENEFICIARY’S postal address by means of registered mail,
or by such other method of payment as the TRUSTEES at the
request
of
the
BENEFICIARY
may
approve.
The
BENEFICIARY shall notify the FUND in writing of the
particulars of his bank account and/or his postal address.
(7)
Late payment interest may be payable on any benefit due to a
MEMBER or other BENEFICIARY on such MEMBER’S
retirement, leaving SERVICE in terms of Rule 7 or death, or,
subject to the provisions of the ACT, on any amount
transferred for his benefit to another APPROVED PENSION
FUND, APPROVED PROVIDENT FUND or APPROVED
RETIREMENT
requirements
ANNUITY
of
the
FUND
REVENUE
or,
subject
AUTHORITIES,
to
the
to
a
PRESERVATION PENSION FUND. Any such interest shall
- 40 be paid in accordance with the practice of the FUND. It is
specifically provided that if a MEMBER who has left SERVICE
in terms of Rule 7 elects to transfer his benefit to another
APPROVED PENSION FUND, APPROVED PROVIDENT
FUND, APPROVED RETIREMENT ANNUITY FUND or
PRESERVATION PENSION FUND in terms of that Rule, any
interest payable on such benefit shall be paid at a rate that is
not less than the rate prescribed by legislation.
9.2
Payment other than Specified
Notwithstanding a contrary provision contained in the RULES, if the
TRUSTEES, in their absolute discretion, for some good and
sufficient reason deem it not advisable to make payment of a benefit
in the manner elsewhere provided for in these RULES, they may pay
the benefit in one of the following ways:
(a)
to a trustee contemplated in the Trust Property Control Act,
1988 (Act No. 57 of 1988), for the benefit of the
BENEFICIARY; and/or
(b)
where any BENEFICIARY is a minor, to the curator or
guardian of such BENEFICIARY, for the benefit of such
BENEFICIARY; and/or
(c)
where a BENEFICIARY is contractually incapacitated, to the
curator of such BENEFICIARY, for the benefit of the
BENEFICIARY.
Any decision of the TRUSTEES in terms of this Rule may be varied
by them from time to time in their discretion.
Any lump sum payable in terms of Rule 5.1 may be paid in
instalments subject to the provisions of Section 37C of the ACT.
- 41 -
Any payment made in terms hereof shall not be made in a manner
which is in conflict with the provisions of the ACT or the requirements
of the REVENUE AUTHORITIES.
9.3
Limitation
This Rule shall apply notwithstanding anything to the contrary
contained in Rules 5 and 6:
(1)
The TRUSTEES may after consultation with the ACTUARY
reinsure the death benefits referred to in Rule 5.1 of
Annexure C and Rule 5.1 of Annexure D with an INSURER.
Such benefits shall be subject to the conditions imposed by
the INSURER concerned and each MEMBER shall only be
entitled to such benefits to the extent that the claim is
accepted by the INSURER; provided that the TRUSTEES
may, in their absolute discretion and after consultation with
the ACTUARY, make provision for payment out of the Risk
and Expenses Reserve Account of part of any benefit which
has been reduced or for payment of the whole benefit, where
the INSURER has refused to admit a claim in respect of any
benefit.
(2)
Any MEMBER whose benefit or any part thereof is restricted
in terms of this Rule shall be informed of the extent of such
restriction by the TRUSTEES.
(3)
If the contributions in terms of Rule 8.2(1)(b) of Annexure D,
together with any provision made for this purpose in the Risk
and Expenses Reserve Account are not sufficient to provide
the death benefits set out in Rule 5.1 and Rule 6 of
Annexure D such benefits may be reduced to avoid a loss.
- 42 Such reduction shall be determined by the TRUSTEES after
consultation with the ACTUARY.
(4)
If any part of the death benefits referred to in Rule 5.1 of
Annexure C and Rule 5.1 of Annexure D is insured with an
INSURER and the cover provided in terms of the policy
issued by the INSURER is suspended or cancelled for
reasons beyond the control of the TRUSTEES then that part
of the death benefits in Rule 5.1 of Annexure C and Rule 5.1
of Annexure D which was so insured shall not be payable by
the FUND.
9.4
Benefits Inalienable
(1)
Save to the extent permitted by the ACT, the Income Tax Act,
1962, the Maintenance Act, 1998 and the Divorce Act, 1979,
no benefit or right thereto provided for in the RULES, or right
in respect of contributions made by or on behalf of a
MEMBER or DEFERRED PENSIONER shall be capable of
being reduced, transferred, ceded, pledged or hypothecated
or be liable to attachment or subject to any form of execution
under a judgement or order of court, or to the extent of not
more than R3 000 per annum, be capable of being taken into
account in the determination of a judgement debtor's financial
position in terms of the Magistrates' Courts Act, 1944.
(2)
If a person attempts to transfer, cede, pledge or hypothecate
a benefit or right, the benefit shall, as the TRUSTEES may
direct,
be
withheld
or
suspended;
provided
that
the
TRUSTEES may direct that the benefit or part thereof be paid
to one or more of the BENEFICIARY'S DEPENDANTS or to a
guardian or trustee for the benefit of such DEPENDANT(S)
during such period as they may determine.
- 43 -
(3)
If the estate of any person entitled to a benefit in terms of the
RULES is sequestrated or surrendered, the benefit shall,
subject to the provisions of the ACT, not be deemed to form
part of the assets of the insolvent estate of such person and
may not in any way be attached or appropriated by the trustee
of such person's insolvent estate or by his creditors,
notwithstanding anything to the contrary in any law relating to
insolvency.
9.5
Lien over Benefits
(1)
Any benefit payable in respect of a BENEFICIARY in terms of
the RULES on a MEMBER'S retirement or termination of
membership for any reason may be subject to a deduction by
the TRUSTEES in respect of the following:
(a)
any housing loan granted to the MEMBER by the
EMPLOYER for any purpose referred to in Section
19(5)(a) of the ACT;
(b)
any amount for which the FUND or the EMPLOYER is
liable under a guarantee furnished in respect of any
loan granted by some other person or body to the
MEMBER for any purpose referred to in Section
19(5)(a) of the ACT;
(c)
compensation (including any legal costs recoverable
from the MEMBER) in respect of any damage caused
to the EMPLOYER as a result of any theft, dishonesty,
fraud or misconduct by the MEMBER and in respect of
which the MEMBER has in writing admitted liability to
the EMPLOYER, or judgement has been obtained
against the MEMBER in any court.
- 44 -
(2)
The TRUSTEES shall pay any amount so deducted to the
EMPLOYER or such other person or body; provided that the
total amount deducted in terms of (1)(a) and (b) above shall
not exceed the amount which may be taken as a lump sum by
a BENEFICIARY in terms of the Income Tax Act, 1962.
It is further provided that the amount deducted in terms of
(1)(c) above is not subject to any restriction other than as
stipulated in the ACT.
(3)
Notwithstanding any other provisions of the RULES, in order to
give effect to the provisions of this Rule:
(a)
the TRUSTEES may where an EMPLOYER has
instituted legal proceedings in a court of law and/or laid a
criminal charge against the MEMBER concerned for
compensation in respect of damage caused to the
EMPLOYER as contemplated in Section 37D of the
ACT, withhold payment of the benefit until such time as
the matter has been finally determined by a competent
court of law or has been settled or formally withdrawn;
provided that
(i)
the amount withheld shall not exceed the amount
that may be deducted in terms of Section
37D(b)(ii) of the ACT;
(ii)
the TRUSTEES in their reasonable discretion are
satisfied that the EMPLOYER has made out a
prima facie case against the MEMBER concerned
and
there
is
reason
to
believe
that
the
EMPLOYER has a reasonable chance of success
in the proceedings that have been instituted;
- 45 -
(iii)
the
TRUSTEES
are
EMPLOYER is not at
satisfied
that
any stage
the
of the
proceedings responsible for any undue delay in
the prosecution of the proceedings;
(iv)
once the proceedings have been determined,
settled or withdrawn, any benefit to which the
MEMBER is entitled is paid forthwith; and
(v)
the TRUSTEES, at the express written request of
a MEMBER whose benefit is withheld, may, if
applicable and practical, permit the value of the
MEMBER’S benefit as at the time of such request
to
be
isolated,
TRUSTEES
in
believe
whatever
manner
appropriate,
from
the
the
possibility of a decrease therein as a result of
poor investment performance.
(b)
if a MEMBER is retiring on PENSION, the TRUSTEES
shall have the right to commute for a lump sum an
amount of the PENSION up to the maximum amount
which may be commuted in terms of Rule 4.5(1) or
Rule 4.3 of Annexure C and to make the deduction from
such lump sum.
9.6
Unclaimed Benefits
If a benefit due under the FUND, other than a benefit payable in terms
of Section 37C of the ACT, is not claimed within three years after the
date on which it became due for payment, the benefit shall revert to
the FUND; provided that if a potential BENEFICIARY approaches the
FUND at any stage thereafter, the TRUSTEES shall consider his claim
- 46 and if the circumstances so warrant, shall pay to the BENEFICIARY
that part of the benefit, increased by such interest as they may allow,
that as at the date of payment to the BENEFICIARY is in excess of
any costs incurred by the FUND in the administration of such benefit
and any amount referred to in Rule 9.13.
9.7
Greater Benefits and Escalation of Benefits
(1)
The TRUSTEES shall, at the request of the EMPLOYER,
increase any benefit payable to or in respect of any MEMBER
on such basis as shall be determined after consultation with
the ACTUARY, subject to such conditions as they may
impose and subject to the approval of the REVENUE
AUTHORITIES where necessary. The cost of such greater
benefit shall be payable by the EMPLOYER.
(2)
The TRUSTEES shall review the level of PENSIONS being
paid from the FUND and may direct that PENSIONS and
deferred PENSIONS be increased.
Any increase in
PENSIONS and deferred PENSIONS shall be paid in terms of
the pension increase policy adopted by the TRUSTEES in
consultation with the ACTUARY from time to time, and shall
be payable from the date set out in the pension increase
policy and subject to the minimum pension increase in terms
of the ACT.
9.8
Transfers from or to other Funds
(1)
The TRUSTEES may, after consultation with the ACTUARY
and on conditions determined by them, approve special
arrangements for the preservation of pension rights, which
make provision, inter alia, for the following:
- 47 (a)
In respect of persons who were members of another
APPROVED PENSION FUND or an APPROVED
PROVIDENT FUND and who become MEMBERS of
the FUND:
(i)
for the amendment of the conditions of the
FUND in respect of such MEMBERS, having
regard to the conditions that applied to such
MEMBERS under such other fund;
(ii)
in the case of DEFINED BENEFIT MEMBERS,
for the recognition of certain periods of former
service as PENSIONABLE SERVICE or for
additional PENSIONS in recognition of any
former service;
(iii)
for the payment by such persons or such other
fund of contributions in respect of recognition of
such
former
service
or
such
MEMBER’S
benefits.
(b)
In respect of a person who was a MEMBER of the
FUND and within six months of his withdrawal from the
FUND becomes a member of
an APPROVED
PENSION FUND, APPROVED PROVIDENT FUND or
APPROVED RETIREMENT ANNUITY FUND:
(i)
that no withdrawal benefit shall be paid by the
FUND
under
Rule 7
in
respect
of
such
MEMBER;
(ii)
for the payment to such other fund of an amount
not less than the value of the withdrawal benefit
- 48 that the MEMBER would otherwise have been
entitled to in terms of Rule 7.1 and not greater
than the ADJUSTED MEMBER'S SHARE in the
case of a MEMBER other than a DEFINED
BENEFIT MEMBER; provided that in the case of
transfer to an APPROVED PROVIDENT FUND,
the amount so transferred shall be less any tax
payable thereon.
(2)
Notwithstanding any other provisions of these RULES, in the
event of a transfer of an EMPLOYER’S business in terms of
Section 197 of the Labour Relations Act, the following shall
apply:
(a)
if a MEMBER affected by such transfer becomes a
member of an APPROVED PENSION FUND or an
APPROVED PROVIDENT FUND established for the
benefit of the employees of the organisation into which
the business of his EMPLOYER has been transferred,
the TRUSTEES shall pay to such APPROVED
PENSION FUND or APPROVED PROVIDENT FUND
an amount equal to:
(i)
in the case of a MEMBER who is not a
DEFINED BENEFIT MEMBER, his ADJUSTED
MEMBER’S SHARE (less, in the case of
transfer to an APPROVED PROVIDENT FUND,
any tax payable thereon);
or
(ii)
in the case of a DEFINED BENEFIT MEMBER,
his actuarial reserve (less, in the case of transfer
- 49 to an APPROVED PROVIDENT FUND, any tax
payable
thereon),
as
determined
by
the
ACTUARY at the date on which the MEMBER
becomes a member of such APPROVED
PENSION FUND or APPROVED PROVIDENT
FUND, increased until the date of transfer by
interest at a rate determined by the TRUSTEES,
after consulting the ACTUARY;
or
(b)
if the circumstances contemplated in (a) above do not
exist, the TRUSTEES shall arrange for an amount to
be transferred to an APPROVED RETIREMENT
ANNUITY FUND for the benefit of the MEMBER, such
amount being equal to:
(i)
in the case of a MEMBER who is not a
DEFINED BENEFIT MEMBER, his ADJUSTED
MEMBER’S SHARE;
or
(ii)
in the case of a DEFINED BENEFIT MEMBER,
his actuarial reserve, as determined by the
ACTUARY at the date on which the MEMBER
becomes a member of such APPROVED
RETIREMENT ANNUITY FUND, increased until
the date of transfer by interest at a rate
determined by the TRUSTEES, after consulting
the ACTUARY.
On finalisation of the transfer of his benefit in terms of (a) or
(b) above, the MEMBER shall cease to be a MEMBER of the
FUND.
- 50 -
9.9
Currency
Contributions and benefits are payable in the currency of the
Republic of South Africa.
9.10
Moneys not to revert to Employer
The EMPLOYER shall not derive any monetary advantage from
moneys paid into or out of the FUND and no moneys shall become
the property of the EMPLOYER other than expressly provided for in
these RULES.
9.11
Interpretation of Rules and Disputes
(1)
The decision of the TRUSTEES as to the meaning of or
interpretation of these RULES or of any particular Rule or part
of a Rule shall be final and binding on the EMPLOYERS,
MEMBERS and every person claiming to be entitled to a
benefit under these RULES, subject to the provisions of
Section 30A of the ACT.
(2)
Any question which may arise with regard to a claim by any
person under these RULES shall be decided by the
TRUSTEES, subject to the provisions of Section 30A of the
ACT.
(3)
If any person affected by a decision of the TRUSTEES in
terms of (1) or (2) above is dissatisfied with the decision, he
shall have the right to lodge a written complaint as envisaged
in Section 30A of the ACT.
dissatisfied
he
may
lodge
If such person remains
his
complaint
with
the
ADJUDICATOR which shall be dealt with in accordance with
Sections 30D to 30P of the ACT.
- 51 -
(4)
The EMPLOYER, the TRUSTEES (or one or more of their
number), or any other person having a complaint or dispute of
fact or law shall, notwithstanding anything to the contrary in
these RULES, have the right to invoke the complaint
procedures in accordance with the ACT.
9.12
Special Provisions applicable with effect from 2 October 2000
(1)
If the PENSION payable to a QUALIFYING SPOUSE who is in
receipt of a PENSION on 2 October 2000 had previously been
reduced as a result of
the QUALIFYING SPOUSE’S
remarriage, in terms of the RULES as they applied prior to
1 December
1997,
the
PENSION
payable
to
such
QUALIFYING SPOUSE shall be increased to the level which
would have been payable on 2 October 2000, if such reduction
had not been applied; provided that such revised PENSION
shall only be payable with effect from 2 October 2000 and no
adjustment shall be made to the PENSION which was paid to a
QUALIFYING SPOUSE prior to this date.
(2)
If the PENSION payable to a QUALIFYING CHILD who is in
receipt of a PENSION on 2 October 2000 had previously been
increased as a result of the remarriage of a QUALIFYING
SPOUSE, in terms of the RULES as they applied prior to
1 December
1997,
the
PENSION
payable
to
such
QUALIFYING CHILD shall be reduced to the level which would
have been payable on 2 October 2000, if such increase had not
been applied; provided that such revised PENSION shall only
be payable with effect from 2 October 2000 and no adjustment
shall be made to the PENSION which was paid to a
QUALIFYING CHILD prior to this date.
- 52 (3)
This Rule shall not be applied retrospectively and no person
who qualifies for benefits in terms of this Rule shall have any
claim
whatsoever
for
benefits
hereunder,
prior
to
2 October 2000.
9.13
Tracing Costs
If any costs are incurred as a consequence of the TRUSTEES tracing
any potential BENEFICIARIES whose benefits due under the FUND
are unclaimed, such reasonable costs may be recovered from the
benefits payable to such BENEFICIARIES.
- 53 10.
MANAGEMENT OF THE FUND
10.1
Board of Trustees
(1)
The control, management and administration of the FUND
shall vest in a Board of TRUSTEES consisting of fourteen
persons,
of
which
seven
(hereinafter
referred
to
as
representatives of the EMPLOYER) shall be appointed by the
MAIN
EMPLOYER,
six
(hereinafter
referred
to
as
representatives of the MEMBERS) shall be elected by the
MEMBERS,
and
one
(hereinafter
referred
to
as
a
representative of the PENSIONERS) shall be elected by the
PENSIONERS.
(2)
An alternate for each TRUSTEE may be appointed by the
MAIN
EMPLOYER or elected by the MEMBERS or
PENSIONERS depending on whether the TRUSTEE is a
representative of the EMPLOYER, the MEMBERS or the
PENSIONERS. Each such alternate shall act on behalf of the
TRUSTEE in respect of whom he has been appointed or
elected during the latter’s absence or inability to act as
TRUSTEE.
(3)
The representatives of the MEMBERS and PENSIONERS
and their alternates shall be elected by ballot.
The six
candidates receiving the highest number of votes from the
MEMBERS shall be regarded as representatives of the
MEMBERS while the next six candidates shall serve as
alternatives. The candidate receiving the highest number of
votes from the PENSIONERS shall be regarded as the
PENSIONERS’ representative and the candidate receiving
the second highest number votes shall be his alternate.
- 54 Where two or more MEMBERS have the same number of
votes, the election, in respect of those MEMBERS shall be
determined
by
a
draw.
When
a
MEMBERS'
or
PENSIONERS' representative or alternate is elected, he shall
remain, subject to the provisions of Rules 10.1(5) and 10.1(6)
and his right to resign, a TRUSTEE or alternate for a period of
three years, whereafter he shall retire from his position. A
TRUSTEE or alternate who has retired in accordance
herewith may be re-elected.
(4)
A casual vacancy on the Board of TRUSTEES in respect of a
TRUSTEE or alternate appointed by the MAIN EMPLOYER,
shall be filled by the MAIN EMPLOYER. A casual vacancy on
the Board of TRUSTEES in respect of a TRUSTEE or
alternate elected by the MEMBERS or the PENSIONERS,
shall be filled by the Board of TRUSTEES after consultation
with
the
representatives
of
the
MEMBERS
and
PENSIONERS; provided that the person thus appointed shall
retire at the same time as the TRUSTEE or alternate in whose
place he was appointed, would have retired.
(5)
The MAIN EMPLOYER has the right at any time to remove
one or more of his representatives on the Board of
TRUSTEES and/or their alternates from office and to appoint
new representatives and/or alternates in their place.
The
MEMBERS have the right to remove one or more of their
representatives on the Board of TRUSTEES and/or their
alternates by way of a resolution made at a general meeting
of MEMBERS called for this purpose by the Board of
TRUSTEES at the request of at least one-third of the
MEMBERS,
and
to
alternates in their place.
elect
new representatives
and/or
- 55 The PENSIONERS may remove their representative on the
Board of TRUSTEES and/or his alternate by way of a
resolution made at a general meeting of PENSIONERS called
for this purpose by the Board of TRUSTEES at the request of
at least one-third of the PENSIONERS, and to elect a new
representative and/or alternate in his place.
(6)
Any TRUSTEE or any alternate shall cease to act as such if:
(i)
he ceases to be a TRUSTEE in terms of Rules 10.1(3)
or 10.1(5); or
(ii)
he becomes mentally or physically incapable of acting;
or
(iii)
his estate is sequestrated or surrendered or assigned
in favour of his creditors; or
(iv)
he is convicted by a competent court of theft, fraud,
forgery or any similar offence; or
(v)
he is discharged by a competent court from any office
of trust on account of misconduct; or
(vi)
he is convicted by a competent court on any charge
and sentenced to a prison term without the option of a
fine.
(7)
A chairman shall be elected by the TRUSTEES from
nominations which they have submitted.
The outgoing chairman shall not have a vote during such
election and, should the votes be equal, the matter shall be
referred to the president of the Institute of Retirement Funds
for a final decision.
- 56 -
The following provisions shall apply to the chairman:
(i)
he may not be a MEMBER or a TRUSTEE of the
FUND;
(ii)
he must be younger than 70 years of age;
(iii)
he shall be appointed for a period of 3 years; and
(iv)
an outgoing chairman may present himself for reelection but may not hold this office for more than three
terms.
(8)
The quorum of the Board of TRUSTEES shall comprise six
TRUSTEES of which three shall be representatives of the
EMPLOYER. Such quorum shall be authorised to carry out
any of the obligations of the Board of TRUSTEES in spite of
any vacancy which may arise on the Board of TRUSTEES. In
the case of absence of the chairman at any meeting, an
acting chairman shall be elected by the TRUSTEES present.
10.2
Meetings of the Board of Trustees
(1)
The chairman shall, when he deems it necessary, but at least
once a year, convene a meeting of the Board of TRUSTEES
in order to address the matters pertaining to the FUND.
At all such meetings the decision of the majority shall be
binding. The chairman of the meeting shall not have a normal
vote but, should the votes be equal, he shall have a casting
vote.
- 57 (2)
Any TRUSTEE may direct a written request to the chairman to
convene a meeting of the Board of TRUSTEES in order to
address matters set out in the request. If the chairman deems
the request to be reasonable, he shall convene a meeting of
the TRUSTEES as soon as possible, but in any event not
more than 30 days after the request was received; provided
that if the request enjoys the support of the majority of
TRUSTEES and the chairman does not convene a meeting,
the TRUSTEES may themselves convene a meeting after
having informed the chairman of their intention to do so, and if
a quorum is present the decision of the meeting shall be
binding. At least 15 days’ notice of each ordinary meeting
shall be given to each TRUSTEE; provided that at the
discretion of the Board of TRUSTEES this notice period may
be waived or reduced.
(3)
Minutes of the meeting of the Board of TRUSTEES must be
kept. At each meeting the minutes of the previous meeting
must be signed by the chairman of the meeting after being
approved by the meeting.
(4)
A decision signed by more than half the Board of TRUSTEES,
shall be as valid and binding as a decision taken at a meeting
of the Board of TRUSTEES and must be noted as such. Any
decision taken in terms of this provision must be ratified at the
next TRUSTEES’ meeting.
10.3
Powers of the Board of Trustees
Subject to the provisions of the ACT, the TRUSTEES shall be
authorised to carry out the objects and purposes of the FUND in
accordance with the RULES and, without prejudice to the general
purport of this provision, shall have the following powers:
- 58 -
(a)
to receive, administer and apply the moneys of the FUND;
(b)
to enter into contracts in the name of the FUND and to sign
such contracts or other documents on behalf of the FUND, to
institute any legal action and to conduct, process, defend,
settle or abandon any legal action or process instituted by or
against the FUND;
(c)
to raise, borrow or lend moneys, at interest or otherwise, for
the purposes of the FUND; provided that borrowing shall be
limited to temporary loans for bridging unforeseen cash
shortages or for taking advantage of attractive investment
opportunities; provided further that the total amount of such
loans shall be limited to 50% of the gross income of the FUND
from all sources in the preceding financial year;
(d)
to acquire, hold, alienate or otherwise deal with any movable
or immovable property for the use of the FUND; provided that
any property in excess of the FUND'S own requirements at
any stage may be let;
(e)
subject to the provisions of Section 19 of the ACT, to invest in
immovable property and otherwise to invest, lend, put out at
interest, place on deposit, make advances of, or otherwise
deal with all moneys of the FUND upon such securities and in
such manner as they may determine from time to time, and, in
particular, to invest the whole or part of the moneys of the
FUND, for such period and on such terms as they may
determine, in an investment policy issued by an INSURER;
provided that the TRUSTEES may delegate their powers to
make investments of any nature to any person or persons, or
to a financial institution as defined in the Financial Institutions
- 59 (Protection of Funds) Act, 2001, or to a person approved in
terms of Section 4(1)(a) of the Stock Exchanges Control Act,
1985, and may defray expenses incurred as a result of such
delegation out of the moneys of the FUND;
(f)
to provide a guarantee in respect of a loan granted to a
MEMBER by another person, for a purpose envisaged in
Section 19(5)(a) of the ACT; provided that such guarantee
shall be subject to the requirements of the REGISTRAR;
provided further that a MEMBER who is in receipt of a loan
from the FUND on 1 November 1996, as envisaged in Section
19(5) of the ACT, may elect to leave such loan with the FUND
or to apply for a loan from another person as determined by
the TRUSTEES and to settle the loan with the FUND, in which
case the provisions of the first paragraph above shall apply.
A loan granted to a MEMBER by the FUND or a loan granted
to the MEMBER by another person and in respect of which
the FUND has provided a guarantee, shall be repaid
immediately on termination of the MEMBER'S SERVICE, and
may in accordance with Rule 9.5 of the RULES and
Section 37D of the ACT, be deducted from any benefit
payable to which the MEMBER or his BENEFICIARY may be
entitled, and paid to the FUND or the other person who
granted the loan, as the case may be. If the MEMBER is in
receipt of a PENSION, the TRUSTEES may commute part of
the PENSION for a lump sum in accordance with Rule 9.5, on
the advice of the ACTUARY, to settle the loan.
(g)
to reinsure with an INSURER any benefit provided by the
FUND to its MEMBERS and/or PENSIONERS and to act on
behalf of the FUND and the MEMBERS in all negotiations
with such INSURER;
- 60 -
(h)
to delegate any of their powers and obligations to a subcommittee or any other person or persons, subject to such
conditions they may determine;
(i)
to make, amend and rescind regulations in respect of any
matter concerning the FUND, provided that such regulations
are compatible with the RULES;
(j)
in general to take such steps as are, in their discretion,
conducive to the attainment of the objects of the FUND.
(k)
(aa)
Notwithstanding the provisions of Rule 10.3(e), the
investment powers of
the TRUSTEES may be
delegated by the TRUSTEES to each MEMBER of the
FUND on such terms and conditions and in accordance
with such procedures as the TRUSTEES may
prescribe from time to time. These terms, conditions
and procedures include but are not limited to:
(i)
the right of the TRUSTEES to determine, and
change from time to time, the number, range
and composition of any investment portfolios
from which a MEMBER may elect to invest all or
part
of
his
MEMBER'S
SHARE
and/or
contributions paid by and in respect of him;
(ii)
the right of the TRUSTEES, in their sole
discretion, to take into account any charges
incurred in connection with any investment
choice made by a MEMBER when determining
the INVESTMENT RETURN in respect of that
MEMBER;
- 61 -
(iii)
in the case of a MEMBER who does not elect
within
such
timeframe
specified
by
the
TRUSTEES, an investment portfolio in respect
of all or part of his MEMBER'S SHARE and/or
contributions paid by and in respect of him, the
right of the TRUSTEES to invest the assets
relating
to
his
MEMBER’S
SHARE
in
a
moderate balanced portfolio which continues to
operate on the smoothed bonus principle.
(bb)
The TRUSTEES shall take reasonable steps to ensure
that MEMBERS are adequately informed of their
investment
choices
available
to
consequences of their decisions.
them
and
the
The TRUSTEES
shall in no way advise, influence or assist MEMBERS
in making their choices, such advice to be obtained by
MEMBERS from their personal financial planners or
such other financial advisors as the TRUSTEES may
from time to time arrange for the benefit of MEMBERS.
(cc)
Whilst the TRUSTEES shall take reasonable steps to
ensure that the interests of all MEMBERS are
protected, the TRUSTEES and the FUND shall not be
liable for any loss, damage or prejudice suffered, or
alleged to be suffered, by any MEMBER or other
person claiming to be entitled to a benefit or any other
amount under the FUND, as a result of or in connection
with any investment choice made by a MEMBER.
10.4
Principal Officer
(1)
The TRUSTEES shall appoint a principal officer and, if
deemed necessary, any other staff subject to such terms and
- 62 conditions as they may determine.
Any such appointment
may be changed by the TRUSTEES in their sole discretion.
The TRUSTEES shall inform the REGISTRAR of the name of
the principal officer.
If the principal officer is absent from the Republic of South
Africa for a period exceeding 30 days or is otherwise unable
to perform his duties, the TRUSTEES must appoint another
person to act as principal officer during the period of his
absence or disability and must advise the REGISTRAR
accordingly.
(2)
The TRUSTEES may from time to time appoint a suitable
person or body to attend to the day-to-day operation of the
FUND.
Any such appointment may be changed by the
TRUSTEES in their sole discretion.
10.5
Auditor
(1)
The TRUSTEES shall appoint an AUDITOR, subject to the
provisions of the ACT, and each such appointment shall
remain in force for a period of twelve months unless the
AUDITOR is discharged by the TRUSTEES or the AUDITOR
withdraws the appointment prior to the expiry of such period
of twelve months.
(2)
The AUDITOR shall have access to all books, vouchers,
accounts and other documents pertaining to the FUND and
shall certify in writing the result of each audit.
10.6
Books of Account
(1)
The TRUSTEES shall ensure that such accounts, entries,
registers and records as are necessary for the proper
- 63 management of the FUND are kept. The books of account
shall be closed off as at the FUND ANNIVERSARY and be
audited by the AUDITOR of the FUND.
(2)
The accounts shall be approved by the TRUSTEES and a
copy thereof shall be available for inspection by MEMBERS of
the FUND and any other person having an interest in the
FUND.
10.7
Actuary
The TRUSTEES shall appoint an ACTUARY as the valuator of the
FUND in terms of the ACT, subject to the consent of the
REGISTRAR, and such appointment shall remain in force until
rescinded by the TRUSTEES or withdrawn by the ACTUARY.
10.8
Actuarial Valuations
(1)
The TRUSTEES shall keep such registers and records as will
enable the ACTUARY to undertake an actuarial valuation of
the FUND at any time.
(2)
The financial condition of the FUND shall be investigated and
reported on by the ACTUARY at intervals not exceeding three
years. The TRUSTEES shall forward a copy of such report to
the REGISTRAR and shall cause a copy of such report or a
summary thereof to be sent to every EMPLOYER participating
in the FUND.
(3)
If the valuation discloses that there is a deficit, the manner of
funding the deficit shall be considered by the TRUSTEES and
the MAIN EMPLOYER in consultation with the ACTUARY.
The decision on how the deficit is to be funded shall be taken
- 64 by the TRUSTEES on the advice of the ACTUARY and
subject to the agreement of the MAIN EMPLOYER; provided
that any deficit in respect of DEFINED BENEFIT MEMBERS
and persons in receipt of PENSIONS from the FUND shall be
met by the EMPLOYER and/or the Employer Surplus
Account. If the valuation discloses that there is an actuarial
surplus, the provisions of (4) or (5) below, as applicable, shall
apply.
(4)
If a valuation as at the SURPLUS APPORTIONMENT DATE
discloses that there is an actuarial surplus, such surplus shall,
after meeting the costs of apportioning surplus in accordance
with the ACT, be equitably apportioned between the
stakeholders contemplated in the ACT in accordance with a
scheme
for
REGISTRAR
apportionment
within
18
to
months
be
submitted
after
the
to
the
SURPLUS
APPORTIONMENT DATE, or such later date as approved by
the REGISTRAR. Any amounts allocated to the MEMBERS
and/or the EMPLOYER in terms of the surplus apportionment
scheme shall be credited to the Employer Surplus Account
and the Member Surplus Account established in terms of
Rule 2.6 and Rule 2.7.
(5)
If a valuation after the implementation of a scheme for surplus
apportionment in terms of (4) above discloses surplus, such
amount shall be credited to the Employer Surplus Account
and to the Member Surplus Account in terms of Section 15C
of the ACT; provided that any surplus in respect of DEFINED
BENEFIT MEMBERS and persons in receipt of PENSIONS
from the FUND shall be credited to the Employer Surplus
Account.
- 65 10.9
Bank Account
The TRUSTEES shall cause accounts to be opened in the name of
the FUND at any registered banking institution and may from time to
time authorise cheques, bills or other documents relating to such
accounts and pertaining to the FUND to be signed or endorsed by
any person as they deem fit.
All moneys received by or on behalf of the FUND shall be paid into
one of these accounts.
10.10
Records and Safe Custody of Securities
(1)
The TRUSTEES shall ensure that complete records are kept
of all the necessary particulars of the MEMBERS and any
other persons entitled to benefits and of all other matters
essential to the efficient administration of the FUND.
(2)
All mortgage bonds, title deeds and other securities belonging
to or held by the FUND shall, unless temporarily held in
custody by others for the purposes of the FUND, be kept in
safe custody in the safe or strongroom at the registered office
of the FUND or at any registered financial institution approved
by the REGISTRAR.
(3)
All assets and securities belonging to or held by the FUND
shall be registered in the name of the FUND or in the name of
a nominee company approved by the REGISTRAR.
10.11
Signing of Documents
The principal officer, and one other TRUSTEE so authorised by the
TRUSTEES shall sign any agreement or document which is binding
- 66 on the FUND or which authorises action on behalf of the FUND;
provided that documents to be deposited with the REGISTRAR shall
be signed as prescribed in the ACT.
10.12
Indemnification
In the interpretation of the RULES or in the execution of any duty
entrusted to them in terms of the RULES, the TRUSTEES or any
person to whom they have delegated any of their powers are not
responsible for any consequence of their actions, except for a
premeditated or intentional breach of trust.
10.13
Fidelity Insurance
The TRUSTEES shall:
(a)
insure the FUND against losses resulting from negligence,
dishonesty or fraud of any of its officers (including the
TRUSTEES) having the receipt or charge of moneys or other
assets belonging to the FUND;
(b)
obtain a written undertaking that any other person or party
including the MAIN EMPLOYER has taken out insurance
against losses resulting from the negligence, dishonesty or
fraud of any other person having the receipt or charge of
moneys or other assets belonging to the FUND.
10.14 Expenses
(1)
The costs incidental to the management and administration of
the Fund, including the cost of audits, actuarial valuations and
investment charges, shall be borne by the FUND.
For this
purpose the EMPLOYERS shall make an additional monthly
- 67 contribution
to
the
FUND,
currently
0,6 per
cent
of
PENSIONABLE EMOLUMENTS or as agreed between the
MAIN EMPLOYER and the Board of TRUSTEES from time to
time.
(2)
In case where actions by the EMPLOYERS give rise to
substantial, non-recurrent increases or decreases in cost (e.g.
staff
reductions,
withdrawal
of
an
EMPLOYER),
the
EMPLOYERS and the FUND shall compensate each other for
additional costs or savings. Where FUND costs increase or
decrease for other reasons, the MAIN EMPLOYER and the
FUND may negotiate an adjustment in the percentage referred
to in (1).
(3)
Expenses such as stamp duties, brokers’ commissions and
other costs which arise directly from the investments of the
FUND are excluded from any costs in terms of this Rule 10.14
and shall continue to be borne by the FUND.
- 68 11.
GENERAL
11.1
Proof of Age and Particulars
Every MEMBER must submit proof of age satisfactory to the
TRUSTEES and furnish such other information as is required by the
TRUSTEES. No benefits, other than benefits in terms of Rule 7.1,
shall be paid in respect of any MEMBER until such proof of age has
been submitted and such other information furnished.
11.2
Beneficiaries are Deferred Creditors
The BENEFICIARIES in terms of the RULES are deferred creditors
of the FUND and their claim in their capacity as BENEFICIARIES
shall not be met until the claims of ordinary creditors have been paid.
11.3
Conditions of Service Unchanged
(1)
Nothing contained in the RULES shall restrict the right of the
EMPLOYER to dismiss any EMPLOYEE, or the right of any
EMPLOYEE to leave the SERVICE of his EMPLOYER,
provided he fulfils the conditions of his service.
(2)
No benefit, right or interest to which a MEMBER is or may
have been entitled in terms of the RULES shall be grounds for
a claim for damages in any action brought by such MEMBER
against the EMPLOYER or the FUND.
(3)
Nothing contained in the RULES shall in any way affect the
right
of
a
MEMBER
or
his
DEPENDANT
to
claim
compensation or damages in terms of Common Law or any
law governing workman's compensation, and the benefits
payable in terms of the RULES shall not be reduced by any
payment made under any such law.
- 69 -
11.4
Registration and Approval
The TRUSTEES shall apply for registration of the FUND in
accordance with the provisions of the ACT and shall apply to the
REVENUE AUTHORITIES for the approval of the FUND as a
pension fund in terms of the Income Tax Act, 1962.
11.5
Amendments to the Rules
(1)
The TRUSTEES may at any time amend the RULES by a
majority of votes; provided that:
(a)
the value of a MEMBER'S SHARE and the vested
benefits in respect of accumulated PENSIONABLE
SERVICE of DEFINED BENEFIT MEMBERS prior to
such amendment shall not be reduced;
(b)
the amendment is approved by the MAIN EMPLOYER
should the amendment affect the MAIN EMPLOYER’S
financial obligation to the FUND;
(c)
the amendment is not inconsistent with the provisions
of the ACT or of the Income Tax Act, 1962;
provided that the limitations in (a) and (b) above shall not
apply to amendments required to ensure that the FUND will
be able to meet its obligations in terms of a certificate issued
by the ACTUARY; and provided further that any amendment
to the RULES affecting the financial basis of the FUND shall
be referred to the ACTUARY before being adopted.
(2)
The TRUSTEES shall submit all amendments to the RULES
to the REGISTRAR and the REVENUE AUTHORITIES.
- 70 -
(3)
Within six months after the FUND ANNIVERSARY the
principal officer shall notify the MEMBERS of all amendments
to the RULES registered during the latest financial year of the
FUND.
11.6
Members may obtain Copies of Documents
Every MEMBER shall on admission to membership be entitled to a
copy of the RULES or to a summary thereof supplied at his request.
Every MEMBER shall also be entitled on demand to inspect and
make copies of the current RULES of the FUND, the latest accounts
of the FUND and the latest valuation report by the ACTUARY.
11.7
Binding Power of Rules
The provisions of the RULES and any regulation made thereunder
by the TRUSTEES shall be binding on the EMPLOYER, the
MEMBERS, the FUND and its officials, and any person who
institutes a claim against the FUND.
11.8
Admission of Additional Employers
Any organisation, company or body directly or indirectly related to
the MAIN EMPLOYER which applies to participate in the FUND may
be admitted as an EMPLOYER for the purposes of the RULES,
subject to the approval of the MAIN EMPLOYER and the
TRUSTEES on such conditions as they may determine.
11.9
Dissolution of Fund
(1)
The FUND may be dissolved by the TRUSTEES, in which
case the TRUSTEES shall appoint a liquidator, subject to the
approval of the REGISTRAR.
- 71 -
The liquidator shall allocate the balance in the Pensions
Account
to
the
PENSIONERS
and
the
QUALIFYING
SPOUSES and QUALIFYING CHILDREN in receipt of
PENSIONS from the FUND, on a basis recommended by the
ACTUARY and approved by the liquidator, and use each such
PENSIONER'S, QUALIFYING SPOUSE’S and QUALIFYING
CHILD’S allocation to purchase a pension from an INSURER.
The conditions determined in respect of such pension shall as
far as possible be equal to the PENSIONER'S, QUALIFYING
SPOUSE’S or QUALIFYING CHILD’S PENSION.
The
liquidator shall allocate the balance of the assets of the FUND
in an equitable manner, as recommended by the ACTUARY,
amongst the MEMBERS participating in the FUND and the
DEFERRED PENSIONERS, and each MEMBER'S and
DEFERRED PENSIONER'S interest in the FUND shall be
invested
in
such
person's
name
in
an
APPROVED
RETIREMENT ANNUITY FUND of his choice, or in a
PRESERVATION PENSION FUND; provided that transfer to
a PRESERVATION PENSION FUND is subject to the
requirements of the REVENUE AUTHORITIES as specified
from time to time.
(2)
The liquidator may determine another method of allocating the
assets of the FUND for the benefit of the MEMBERS,
PENSIONERS, DEFERRED PENSIONERS, QUALIFYING
SPOUSES and QUALIFYING CHILDREN, subject to the
approval
of
the
REGISTRAR
AUTHORITIES.
(3)
The FUND may further be dissolved:
(a)
in terms of an order of a court;
and
the
REVENUE
- 72 -
or
(b)
if the EMPLOYERS unanimously decide that the FUND
should be dissolved, subject to giving six months’
notice to the TRUSTEES and MEMBERS;
or
(c)
if the MAIN EMPLOYER ceases to do business for any
reason; provided that if the MAIN EMPLOYER ceases
to do business due to reconstruction or amalgamation,
such reconstructed or amalgamated organisation shall
have the right to take the place of the MAIN
EMPLOYER in the FUND, in which case the FUND
shall not otherwise be affected.
(4)
If the FUND is dissolved in terms of (3) above, the
TRUSTEES shall appoint a liquidator, subject to the approval
of the REGISTRAR.
(5)
Subject to the provisions of the ACT and the provisions of
Rule 9.5, the liquidator shall decide in which manner the
assets of the FUND shall be realised and, after consultation
with the ACTUARY, in which manner the obligations of the
FUND, including obligations and conditional obligations in
respect
of
MEMBERS,
PENSIONERS,
DEFERRED
PENSIONERS, QUALIFYING SPOUSES and QUALIFYING
CHILDREN, shall be met.
The ACTUARY shall take the
following into consideration:
(a)
any PENSIONS or increases in PENSIONS payable to
PENSIONERS,
QUALIFYING
SPOUSES
and
- 73 QUALIFYING CHILDREN in terms of the RULES as
well as any future QUALIFYING SPOUSE’S and
QUALIFYING CHILDREN'S PENSIONS which may
become payable at a later date due to the death of a
PENSIONER;
(b)
the interest of each MEMBER and DEFERRED
PENSIONER as at the date of dissolution as well as
any additional contributions transferred to the FUND by
or on behalf of an EMPLOYER or assets to the FUND
contributed by an EMPLOYER on the date on which he
was admitted to the FUND as such; and
(c)
any other obligations and liabilities.
The liquidator shall arrange, where necessary, for the
purchase of annuities from an INSURER in respect of the
PENSIONS referred to in (a) above.
(6)
Any assets remaining in the FUND after the obligations
referred to in (5) above have been met, shall be equitably
divided amongst the MEMBERS, PENSIONERS, DEFERRED
PENSIONERS, QUALIFYING SPOUSES and QUALIFYING
CHILDREN by the liquidator and at his discretion; provided
that all EMPLOYEES who left the SERVICE in the
immediately preceding twelve months shall, for purposes of
this Rule, be considered to be MEMBERS at the date of
dissolution of the FUND; provided further, that benefits
already paid to such EMPLOYEES prior to the dividing of the
remaining assets shall be taken into consideration in
determining the amount payable to such person.
- 74 It is specifically provided that the provisions of the Pension
Funds Second Amendment Act, Act No. 39 of 2001, shall
override any conflicting provisions in this Rule 11.9, in
particular with regard to payment of minimum benefits and the
rights of the stakeholders.
(7)
If the FUND is terminated or dissolved under Section 28 of the
ACT, all moneys remaining unclaimed for a period of six
months from the date on which payment of benefits
commenced after completion of all necessary formalities, shall
be paid into the Guardian's Fund by the liquidator for the
benefit of the BENEFICIARIES concerned, and thereafter
there shall be no claim against the FUND or the EMPLOYER.
The liquidator shall indicate in his final liquidation account the
amount thus paid and shall simultaneously furnish the
REGISTRAR with a certificate to the effect that all reasonable
steps were taken to trace persons entitled to the amount. An
auditor approved by the REGISTRAR shall certify the account
as correct.
(8)
If the FUND is wound up in terms of an order of court as
envisaged in Section 29 of the ACT, and the winding-up order
does not specifically make Section 410 of the Companies Act,
1973, expressly applicable and makes no other prescription
regarding how to deal with unclaimed moneys, the provisions
of (7) above shall apply.
11.10
Withdrawal of an Employer
(1)
Subject to the giving of three months' (or such shorter period
as is accepted by the TRUSTEES) notice by the EMPLOYER
concerned to the TRUSTEES and the MEMBERS employed
by that EMPLOYER, an EMPLOYER may withdraw from the
FUND in which case one of the following provisions shall
apply:
- 75 -
(a)
Subject to the provisions of (b) below, the provisions of
Rule 11.9 shall apply mutatis mutandis in respect of the
MEMBERS in the SERVICE of the EMPLOYER
concerned.
(b)
If such EMPLOYER decides to establish a new fund or
scheme or to participate in another fund or scheme for
the purpose of providing retirement benefits for
EMPLOYEES
who
are
members
thereof,
the
provisions of Rule 11.12 shall apply in respect of such
EMPLOYER.
(2)
With the approval of, or, if requested by the MAIN
EMPLOYER, the TRUSTEES may request an EMPLOYER to
withdraw from the FUND as from a date specified by them in
which case the provisions of (1) above shall apply.
(3)
If an EMPLOYER ceases to do business for any reason, such
cessation shall be deemed a withdrawal from the FUND by
such EMPLOYER for the purposes of this Rule, in which
event (1)(a) above shall apply.
11.11
Transfer or Amalgamation
If an EMPLOYER'S operation is transferred to or amalgamated with
that of any other organisation, one of the following provisions shall
apply:
(1)
If after such transfer or amalgamation there is no EMPLOYER
in terms of the RULES, such other organisation may:
(a)
replace such EMPLOYER in the FUND in which event
the FUND shall not otherwise be affected; or
- 76 -
(b)
decide that the FUND be dissolved in accordance with
Rule 11.9.
(2)
Otherwise such other organisation may:
(a)
continue contributions to the FUND in respect of the
existing MEMBERS at the time of such transfer or
amalgamation, subject to any conditions imposed by
the TRUSTEES after consultation with the ACTUARY;
in which case the FUND shall not be affected except
that "EMPLOYER" shall then include such new
organisation, and the provisions of the RULES shall
thereafter apply to all EMPLOYEES of the new
EMPLOYER who were MEMBERS of the FUND at the
time of such transfer or amalgamation; or
(b)
withdraw from the FUND in which case Rule 11.10
shall, subject to the requirements of the REVENUE
AUTHORITIES, apply.
11.12
New Fund or Scheme
(1)
If the EMPLOYER decides to establish an APPROVED
PENSION FUND or an APPROVED PROVIDENT FUND for
the principal purpose of providing retirement benefits for his
EMPLOYEES or for certain of his EMPLOYEES, or to
participate in another APPROVED PENSION FUND or
APPROVED PROVIDENT FUND for this purpose, the
TRUSTEES may, notwithstanding anything to the contrary in
the RULES, apply each MEMBER'S and DEFERRED
PENSIONER'S share of the FUND, as determined by the
TRUSTEES after consultation with the ACTUARY, to obtain
- 77 benefits for the MEMBERS and DEFERRED PENSIONERS
concerned under the APPROVED PENSION FUND or
APPROVED PROVIDENT FUND, in such manner as the
TRUSTEES, after consultation with the ACTUARY and with
the approval of the REGISTRAR, may decide, subject to the
provisions of Section 14 of the ACT; and provided that
sufficient arrangements are made in respect of PENSIONS
referred to in Rule 11.9(5)(a).
(2)
The EMPLOYER shall have the right to request that the
PENSIONERS who were employed by him prior to their
retirement, be transferred to the APPROVED PENSION
FUND or APPROVED PROVIDENT FUND, in which case the
TRUSTEES shall transfer the appropriate proportion of the
Pensions Account, as determined by the ACTUARY, to such
APPROVED PENSION FUND or APPROVED PROVIDENT
FUND.
11.13 Transfer to another Fund in which the Employer participates
With the agreement of the TRUSTEES, certain groups of MEMBERS
may be allowed to transfer to another APPROVED PENSION FUND
or APPROVED PROVIDENT FUND in which the EMPLOYER
participates. In such case, the TRUSTEES, subject to the provisions
of Section 14 of the ACT, shall transfer each such MEMBER'S share
of the FUND, as determined by the TRUSTEES after consultation
with the ACTUARY, to obtain benefits for the MEMBERS in terms of
the rules of such APPROVED PENSION FUND or APPROVED
PROVIDENT FUND.
- 78 ANNEXURE A
PENSION FUNDS ACT, NO. 24 OF 1956
SECTION 37C
"37C. Disposition of pension benefits upon death of member
(1)
Notwithstanding anything to the contrary contained in any law or in
the rules of a registered fund, any benefit payable by such a fund
upon the death of a member, shall, subject to a pledge in
accordance with section 19(5)(b)(i) and subject to the provisions of
sections 37A(3) and 37D, not form part of the assets in the estate of
such a member, but shall be dealt with in the following manner:
(a)
If the fund within twelve months of the death of the member
becomes aware of or traces a dependant or dependants of
the member, the benefit shall be paid to such dependant or,
as may be deemed equitable by the board, to one of such
dependants or in proportions to some of or all such
dependants.
(b)
If the fund does not become aware of or cannot trace any
dependant of the member within twelve months of the death
of the member, and the member has designated in writing to
the fund a nominee who is not a dependant of the member, to
receive the benefit or such portion of the benefit as is
specified by the member in writing to the fund, the benefit or
such portion of the benefit shall be paid to such nominee:
Provided that where the aggregate amount of the debts in the
estate of the member exceeds the aggregate amount of the
assets in his estate, so much of the benefit as is equal to the
difference between such aggregate amount of debts and such
aggregate amount of assets shall be paid into the estate and
- 79 the balance of such benefit or the balance of such portion of
the benefit as specified by the member in writing to the fund
shall be paid to the nominee.
(bA)
If a member has a dependant and the member has also
designated in writing to the fund a nominee to receive the
benefit or such portion of the benefit as is specified by the
member in writing to the fund, the fund shall within twelve
months of the death of such member pay the benefit or such
portion thereof to such dependant or nominee in such
proportions as the board may deem equitable: Provided that
this paragraph shall only apply to the designation of a
nominee made on or after 30 June 1989: Provided further
that, in respect of a designation made on or after the said
date, this paragraph shall not prohibit a fund from paying the
benefit, either to a dependant or nominee contemplated in this
paragraph or, if there is more than one such dependant or
nominee, in proportions to any or all of those dependants and
nominees.
(c)
If the fund does not become aware of or cannot trace any
dependant of the member within twelve months of the death
of the member and if the member has not designated a
nominee or if the member has designated a nominee to
receive a portion of the benefit in writing to the fund, the
benefit or the remaining portion of the benefit after payment to
the designated nominee, shall be paid into the estate of the
member or, if no inventory in respect of the member has been
received by the Master of the Supreme Court in terms of
section 9 of the Estates Act, 1965 (Act No. 66 of 1965), into
the Guardian's Fund.
- 80 (2)
For the purpose of this section, a payment by a registered fund to a
trustee contemplated in the Trust Property Control Act, 1988 (Act
No. 57 of 1988), for the benefit of a dependant or nominee
contemplated in this section shall be deemed to be a payment to
such dependant or nominee.
(3)
Any benefit dealt with in terms of this section, payable to a minor
dependant or minor nominee, may be paid in more than one
payment in such amounts as the board may from time to time
consider appropriate and in the best interests of such dependant or
nominee: Provided that interest at a reasonable rate, having regard
to the investment return earned by the fund, shall be added to the
outstanding balance at such times as the board may determine:
Provided further that any balance owing to such a dependant or
nominee at the date on which he or she attains majority or dies,
whichever occurs first, shall be paid in full.
(4)
(a)
Any benefit dealt with in terms of this section, payable to a
major dependant or major nominee, may be paid in more than
one payment if the dependant or nominee has consented
thereto in writing: Provided that -
(i)
the amount of the payments, intervals of payment,
interest to be added and other terms and conditions
are disclosed in a written agreement; and
(ii)
the agreement may be cancelled by either party on
written notice not exceeding 90 days.
(b)
If the agreement contemplated in paragraph (a) is cancelled
the balance of the benefit shall be paid to the dependant or
nominee in full."
- 81 ANNEXURE B
PENSION FUNDS ACT, NO. 24 OF 1956
SECTION 19(5)
"19.5 Granting of loans by a registered fund to members by way of
investment of its funds
(a)
A registered fund may, if its rules so permit and subject to the
regulations, grant a loan to a member by way of investment of its
funds or furnish a guarantee in favour of a person other than the
fund in respect of a loan granted or to be granted by such other
person to a member to enable the member –
(i)
to redeem a loan granted to the member against security of,
either a pledge by the member concerned to the fund of the
benefit contemplated in paragraph (c)(ii), or immovable
property which either belongs to the member or his or her
spouse or the member and his or her spouse and on which a
residence has been or will be erected which is occupied or, as
the case may be, will be occupied by the member or a
dependant of the member;
(ii)
to acquire immovable property on which a residence has been
or will be erected, or to erect a residence on immovable
property in respect of which, either the member or his or her
spouse, or the member and his or her spouse has or have
obtained ownership or the right to ownership through a right of
occupation, for occupation by the member or a dependant of
the member; or
(iii)
to make additions or alterations to or to maintain or repair a
residence of which ownership or the right to ownership was
- 82 obtained through a right of occupation by either the member
or his or her spouse or the member and his or her spouse and
which is occupied or will be occupied by the member or a
dependant of the member,
if the right of occupation of the immovable property or residence is
secured by virtue of the operation of any custom or law, other than
an agreement of lease or similar temporary measure, entitling such
member, or his or her dependants, to the right of occupation of such
immovable property or residence or any specified portion thereof.
(b)
A loan or guarantee by a fund, contemplated in paragraph (a), shall
not be granted or furnished, respectively, after the commencement
of the Pension Funds Amendment Act, 2001 –
(i)
unless secured by –
(aa)
a first mortgage on the immovable property in respect
of which the loan is granted; or
(bb)
a pledge by the member concerned to the fund of the
benefits to which the member is entitled in terms of the
rules of the fund; or
(cc)
(ii)
both such mortgage and such pledge;
in respect of immovable property if the member concerned is
liable to the fund in respect of a loan or guarantee granted or
furnished in respect of the member in respect of other
immovable property;
(iii)
unless, in the case of a loan granted by the fund, the rate of
interest on the loan is equal to or exceeds the rate of interest
which may from time to time be prescribed by regulation;
- 83 -
(iv)
in the case of a loan granted to the member by some other
person in respect of which a guarantee has been furnished by
the fund, or in respect of a loan by the fund to the member,
unless the capital sum in respect of any such loan together
with interest thereon, is redeemable over a period not
exceeding 30 years in equal weekly or monthly instalments:
Provided that if such period in a particular case extends
beyond the normal retirement date of the member concerned,
the outstanding balance of the loan on that date must be able
to be repaid out of no more than one third of the total value of
the benefit due to the member at that date.
(c)
A loan or guarantee contemplated in paragraph (a) shall not exceed,
at the time it is granted or furnished, where it is secured in
accordance with –
(i)
paragraph (b)(i)(aa), 90 per cent of the fair value of the
hypothecated immovable property concerned;
(ii)
paragraph (b)(i)(bb), the lesser of the amount of –
(aa)
the lowest benefit in terms of the rules which the
member would receive on termination of his or her
membership of the fund, nett of income tax as
envisaged in section 37D(a); or
(bb)
(iii)
the fair value of the immovable property concerned, or
paragraph (b)(i)(cc), the lesser amount of –
(aa)
the amount equal to the aggregate of 90 per cent of the
fair value of the hypothecated immovable property
- 84 concerned and the amount of the lowest benefit in
terms of the rules which the member would receive on
termination of his or her membership of the fund, nett
of income tax as envisaged in section 37D(a); or
(bb)
the fair value of the hypothecated immovable property
concerned.
(d)
The percentages referred to in subparagraphs (i) and (iii) of
paragraph (c) may be increased to 100 per cent, subject to the
furnishing to the fund by the employer of the member of an
irrevocable guarantee in respect of so much of the loan or the
amount of the guarantee as may exceed 90 per cent.
(e)
For the purposes of this section “immovable property” includes a
land tenure right as defined in section 1 of the Upgrading of Land
Tenure Rights Act, 1991 (Act No. 112 of 1991).”
- 85 ANNEXURE C
SPECIAL PROVISIONS APPLICABLE TO DEFINED BENEFIT MEMBERS
The RULES shall be varied as follows in respect of DEFINED BENEFIT
MEMBERS:
1.
The following definitions shall apply for the purposes of this Annexure:
ACCUMULATED CONTRIBUTIONS of a MEMBER : the sum of the
contributions paid by the MEMBER in terms of the RULES, together with
interest at a rate determined from time to time by the TRUSTEES after
consultation with the ACTUARY;
EXPECTED PENSION : in the case of a MEMBER at any particular date
prior to his NORMAL RETIREMENT DATE, the PENSION calculated in
terms of Rule 4.1 of this Annexure, based on his PENSIONABLE
EMOLUMENTS at that date and the period of PENSIONABLE SERVICE to
the NORMAL RETIREMENT DATE;
FINAL SALARY : the highest average PENSIONABLE EMOLUMENTS
during any continuous two years of PENSIONABLE SERVICE;
2.
Rule 3.3 shall be replaced by the following:
3.3
Temporary Absence
(1)
With full remuneration
Membership of the FUND and the benefits and contributions
payable shall not be affected by a MEMBER'S absence from
SERVICE while he is in receipt of his full normal remuneration
from the EMPLOYER.
- 86 -
(2)
Approved temporary absence
(a)
A DEFINED BENEFIT MEMBER who is permitted to
be absent with reduced remuneration or without
remuneration, shall make a choice in writing to
continue his contributions during such period of
absence. The choice shall be subject to the approval
of the EMPLOYER. Any period during such absence
for which no contributions are made, shall not be
considered as PENSIONABLE SERVICE.
The MEMBER’S contributions shall be determined in
accordance with his PENSIONABLE EMOLUMENTS
on the date the absence commenced.
(b)
If a DEFINED BENEFIT MEMBER who has made no
contributions, dies or becomes disabled during such
period of absence, the benefits in terms of Rule 5.1 or
Rule 6 of this Annexure as the case requires, shall be
paid. The benefit shall be calculated as if death or
disability occurred on the date that the last MEMBER’S
contribution was received.
3.
Rule 4 shall be replaced by the following:
4.
PENSION BENEFITS
4.1
Retirement on or after Normal Retirement Date
A MEMBER who retires from the full-time, permanent
SERVICE of the EMPLOYER on or after his NORMAL
RETIREMENT DATE shall receive an annual PENSION
- 87 which is equal to 2,25% of his FINAL SALARY for each year
of PENSIONABLE SERVICE calculated in years and
completed months.
4.2
Early Retirement
(1)
If a MEMBER leaves the SERVICE of the EMPLOYER
at his own or the EMPLOYER’S request during the five
year period between the ages of 60 and 65 years, and
the EMPLOYER considers such withdrawal as early
retirement, such MEMBER shall receive a full PENSION
in terms of Rule 4.1; provided that if a MEMBER who
has a NORMAL RETIREMENT AGE of 65 years leaves
the SERVICE of the EMPLOYER at any stage during the
five year period between the ages of 55 and 60 years (or
in the case of a female MEMBER who entered
SERVICE prior to 3 March 1985 and whose NORMAL
RETIREMENT AGE prior to 1 July 2001 was age 60
years, the ten year period between the ages of 50 and
60 years) and the EMPLOYER considers such
withdrawal to be early retirement, the MEMBER shall
receive a PENSION calculated in accordance with
Rule 4.1, reduced by 4 per cent per annum for the
period from the date of retirement to the end of the
month in which the MEMBER attains the age of 60
years, calculated in years and completed months.
(2)
Notwithstanding the provisions of (1) above
(a)
a MEMBER who, on early retirement has
completed 40 years’ PENSIONABLE SERVICE,
shall not be subject to the reduction in
PENSION set out in (1) above;
- 88 -
and
(b)
the
EMPLOYER
may
agree
with
the
TRUSTEES that part of the aforementioned
reduction shall not apply in which event the
costs thereof, determined by the ACTUARY,
shall be paid by the EMPLOYER to the FUND.
4.3
Commutation of Pension
A MEMBER may, prior to his retirement, request that a
maximum amount equal to one-third of the value of the
PENSION to which he is entitled, as determined by the
ACTUARY, be paid to the MEMBER in cash, in which case
the PENSION to which the MEMBER is entitled, shall then be
reduced proportionately.
If the PENSION to which the
MEMBER is entitled is less than the maximum amount of
annual PENSION that may, from time to time, be fully
commuted for cash by an APPROVED PENSION FUND in
terms of income tax legislation, the full value of the PENSION
may be paid in cash, and the FUND shall thereafter have no
further liability in respect of the MEMBER.
4.4
Pension Options
(1)
A retiring MEMBER who becomes eligible in terms of
this Appendix C to receive a PENSION, may elect
either
(a)
that his PENSION be purchased as an annuity
or annuities from an INSURER in terms of
Rule 4.4(2);
- 89 -
or
(b)
that his PENSION be paid from the FUND, in
which case
(i)
the terms and conditions of these RULES
shall apply unaltered;
and
(ii)
the PENSION payable from the FUND in
respect of him, shall be allocated to the
Pensions
Account
in
terms
of
Rule 2.5(1)(b) and shall be applied in
terms of Rule 2.5(3).
(2)
If a retiring MEMBER elects the option provided for in
Rule 4.4(1)(a), such PENSION shall be purchased as
an annuity or annuities in his name from an INSURER
chosen by him. The terms and conditions applicable to
such annuity or annuities, including options elected by
the MEMBER and the determination of any benefits
arising on his death, shall be agreed between the
MEMBER and the INSURER and shall be set out in
writing by the INSURER; provided that:
(a)
the annuity or annuities so purchased shall be of
such amount as can be purchased by the
actuarial reserve of the PENSION, as calculated
by the ACTUARY, such calculation being based
on the general assumptions as set out in the
latest statutory valuation of the FUND but taking
- 90 into account the actual factors applicable to the
MEMBER at the date of purchase including, in
particular, any contingent liability with regard to
payment of any benefit on the death of such
person, but less any amount commuted in terms
of Rule 4.3;
(b)
the annuity or annuities so purchased shall be
compulsory, non-commutable, non-assignable
and payable for life;
(c)
the purchase of more than one annuity shall be
subject to any further requirements of the
REVENUE AUTHORITIES; and
(d)
on the purchase of an annuity or annuities in
terms of this Rule, the FUND shall have no
further liability in respect of the MEMBER, such
liability resting with the INSURER from whom
the annuity or annuities are purchased.
4.
Rule 5 shall be replaced by the following:
5.
DEATH
5.1
Death of a Member in Service before the Normal
Retirement Date
If a MEMBER dies in the SERVICE of the EMPLOYER before
his NORMAL RETIREMENT DATE, the FUND shall pay the
following:
(a)
three
times
the
MEMBER'S
PENSIONABLE
EMOLUMENTS on the day before his death;
- 91 and
(b)
a PENSION in respect of a QUALIFYING SPOUSE
equal to 50% of the EXPECTED PENSION;
and
(c)
a PENSION to the QUALIFYING CHILDREN for as
long as they are QUALIFYING CHILDREN and there is
a QUALIFYING SPOUSE, equal to a percentage of the
EXPECTED PENSION according to the following table:
Number of
Percentage of
QUALIFYING
EXPECTED
CHILDREN
PENSION
1
25%
2
33 1/3%
3
41 2/3%
4 or more
50%
If there is no QUALIFYING SPOUSE, the PENSION to
the QUALIFYING CHILDREN shall be double the
PENSION that would have been payable if there had
been a QUALIFYING SPOUSE.
5.2
Death of a Member in Service on or after the Normal
Retirement Date
If a MEMBER dies in the SERVICE of the EMPLOYER on or
after the NORMAL RETIREMENT DATE and he leaves a
- 92 QUALIFYING SPOUSE and/or QUALIFYING CHILDREN, the
FUND shall pay such benefits as would have been paid if the
MEMBER retired on the day before his death and elected to
commute for a lump sum the maximum amount permissible in
terms of Rule 4.3 of this Annexure.
5.3
Death after retirement
On the death of a PENSIONER, his PENSION shall cease in
accordance with Rule 9.1(3) of the main body of the RULES
and the following benefits shall become payable by the
FUND:
(a)
a lump sum equal to R2 000 or such other amount as
the TRUSTEES may determine from time to time,
subject to the maximum amount allowed in terms of
income tax legislation;
(b)
a PENSION to the QUALIFYING SPOUSE equal to
50% of the PENSION that the PENSIONER was
receiving immediately prior to his death, or if he
commuted a portion of his PENSION, 50% of the
PENSION the PENSIONER would have received if
such commutation had not taken place;
(c)
a PENSION to the QUALIFYING CHILDREN for as
long as they are QUALIFYING CHILDREN, equal to a
percentage of the PENSION the PENSIONER was
receiving immediately prior to his death, or in the
circumstances referred to in (b) above, he would have
received, in accordance with the following table:
- 93 -
(d)
Number of
Percentage of
QUALIFYING CHILDREN
PENSION
1
25%
2
33 1/3%
3
41 2/3%
4 or more
50%
if no PENSION is payable in terms of (b) above, the
PENSION to the QUALIFYING CHILDREN shall be
double the PENSION that would have been payable if
there had been a QUALIFYING SPOUSE;
(e)
if in terms of his conditions of service a MEMBER is
required to retire on reaching age 60 years and if such
MEMBER retires after reaching age 59 years and
6 months and dies before the age of 65 years, a lump
sum
equal
to
three
times
the
PENSIONABLE
EMOLUMENTS which such PENSIONER earned
immediately prior to his retirement shall be utilised to
increase
pension
benefits
to
his
QUALIFYING
SPOUSE and/or QUALIFYING CHILDREN;
(f)
if a PENSIONER, who is in receipt of a disability
benefit in accordance with Rule 6 dies during the
continuance of such disability, and such death occurs
before his NORMAL RETIREMENT DATE, then
(i)
if he leaves a QUALIFYING SPOUSE and/or
QUALIFYING CHILDREN, an amount equal to
three times the PENSIONABLE EMOLUMENTS
immediately prior to the commencement of the
- 94 disability benefits shall be utilised to increase
the
pension
benefits
payable
to
his
QUALIFYING SPOUSE and/or QUALIFYING
CHILDREN;
(ii)
if he does not leave a QUALIFYING SPOUSE
and/or QUALIFYING CHILDREN, an amount
equal
to
three
EMOLUMENTS
times
the
immediately
PENSIONABLE
prior
to
the
commencement of the disability benefits shall be
payable in terms of Section 37C of the ACT;
(iii)
if there is no QUALIFYING SPOUSE but there
are QUALIFYING CHILDREN, the lump sum
payable in terms of (i) above shall not be used to
augment pensions, but shall be placed in a trust
to be paid out to the QUALIFYING CHILDREN
when they attain majority or at such time as the
TRUSTEES may decide;
provided that, at the discretion of the INSURER, the
amount
of
three
EMOLUMENTS
times
immediately
the
PENSIONABLE
prior
to
the
commencement of the disability benefits may become
payable prior to the PENSIONER’S death if his medical
condition is such that the INSURER agrees to this. In
such case, the PENSIONER may elect to commute not
more than one-third of such amount for a lump sum
and the balance shall be applied to increase the
PENSIONER’S PENSION.
5.4
Commutation of Pensions payable to Qualifying Spouses
and Qualifying Children
Up to one-third of a PENSION to a QUALIFYING SPOUSE or a
QUALIFYING CHILD payable in terms of this Rule 5, including
- 95 any PENSION which is increased in terms of Rule 5.3(e) or (f),
may be commuted for a lump sum of such amount as may be
determined by the ACTUARY, in which case the PENSION to
which the QUALIFYING SPOUSE or QUALIFYING CHILD is
entitled shall be reduced proportionately; provided that such
commutation takes place within 6 months after the death of the
MEMBER or PENSIONER.
5.5
Payment of Pensions to Qualifying Spouses and Qualifying
Children
(1)
If the deceased MEMBER or PENSIONER leaves more
than one QUALIFYING SPOUSE, the TRUSTEES shall
decide to which of them and in what proportion the
benefits
shall
be
paid;
provided
that
the
total
QUALIFYING SPOUSES' PENSIONS payable shall not
be more than the PENSION that would have been
payable had there only been one QUALIFYING
SPOUSE.
(2)
PENSIONS in respect of QUALIFYING CHILDREN of a
MEMBER or PENSIONER shall be paid to or for the
benefit of such QUALIFYING CHILDREN in such
proportions as the TRUSTEES may decide.
5.6
Payment of Benefit
Payment of any death benefit which is not expressed to be paid
to a particular person shall be made in terms of Section 37C of
the ACT.
(The contents of Section 37C of the ACT are
contained in Annexure A to the RULES).
4.
Rule 6 shall be replaced by the following:
- 96 6.
DISABILITY
The benefit payable to a MEMBER who, before reaching his
NORMAL RETIREMENT DATE in the opinion of the TRUSTEES,
becomes totally and permanently unable, due to injury or disease, to
pursue any occupation for which, in the opinion of the TRUSTEES,
he would be reasonably qualified by his education, training and
experience shall be equal to his EXPECTED PENSION at the date
of disability.
5.
Rule 7.1 and Rule 7.2 shall be replaced by the following:
7.1
Lump sum
(1)
Resignation or Dismissal
A MEMBER who leaves the SERVICE of the EMPLOYER of
his own free or will who is dismissed by the EMPLOYER for
reasons other than the reasons specified in (2) below and
who is not entitled to any other benefits in terms of the
RULES shall receive from the FUND an amount equal to his
ACCUMULATED CONTRIBUTIONS at the date of leaving
SERVICE.
(2)
Retrenchment or Redundancy
If an MEMBER leaves SERVICE due to a reduction of
reorganisation of staff, then he shall become entitled to a
benefit equal to the greater of
his ACCUMULATED
CONTRIBUTIONS and his actuarial reserve, as determined
by the ACTUARY, at the date of leaving SERVICE.
- 97 (3)
Payment of Benefit
(a)
The benefit in terms of this Rule shall be paid to the
MEMBER as a lump sum. Subject to the provisions of
Rule 9.5(3)(a), payment shall be made as soon as
possible after the date of his leaving SERVICE.
(b)
Instead of receiving the benefit entirely as a lump sum,
the MEMBER may transfer all or, subject to (ii) below,
part of the benefit to another APPROVED PENSION
FUND,
PRESERVATION
PENSION
FUND,
APPROVED PROVIDENT FUND or APPROVED
RETIREMENT ANNUITY FUND; provided that
(i)
in the case of transfer to an APPROVED
PROVIDENT FUND, the amount so
transferred shall be less any tax payable
thereon; and
(ii)
transfer to a PRESERVATION PENSION
FUND is subject to the requirements of
the
REVENUE
AUTHORITIES
as
specified from time to time.
7.2
Deferred Pension
(1)
If a MEMBER leaves the SERVICE for the reasons referred to
in Rule 7.1(2), or if a MEMBER with at least 10 years'
PENSIONABLE SERVICE resigns from SERVICE or is asked
to resign due to unsatisfactory SERVICE and the MEMBER is
not entitled to benefits in terms of any other Rule, the
MEMBER may choose a deferred PENSION payable from his
NORMAL RETIREMENT DATE rather than the benefits in
- 98 terms of Rule 7.1; provided that if the MEMBER has attained
the age of at least 55 years at the date of such dismissal or
resignation he may, notwithstanding the other provisions of
the RULES, choose the deferred PENSION irrespective of
the number of years of PENSIONABLE SERVICE he has
completed.
(2)
The amount of the deferred PENSION shall be equal to the
PENSION calculated in accordance with the formula set out in
Rule 4.1 on the basis of his PENSIONABLE SERVICE and
his FINAL SALARY as at the date on which he became a
DEFERRED PENSIONER. The provisions of Rule 4.2 shall,
mutatis mutandis, apply to a DEFERRED PENSIONER.
(3)
After a deferred PENSION has become payable to a
MEMBER such PENSION shall be subject to the same
conditions which would have applied if the MEMBER had
retired in terms of the provisions of Rule 4.
(4)
If a DEFERRED PENSIONER dies before payment of his
PENSION begins, a lump sum benefit equal to the discounted
value of his deferred PENSION at the date of his death, as
calculated by the ACTUARY, shall be payable.
6.
Rule 8 shall be replaced by the following:
8.
CONTRIBUTIONS
8.1
Member Contributions
(1)
Each MEMBER who has not reached NORMAL
RETIREMENT DATE shall contribute throughout his
SERVICE
an
amount
equal
to
7,5%
PENSIONABLE EMOLUMENTS to the FUND.
of
his
- 99 -
(2)
Contributions
are
deducted
monthly
from
the
MEMBER'S remuneration.
8.2
Additional Member Contributions
(1)
A MEMBER may make additional contributions to the
FUND on an annual or monthly basis, at a rate and
frequency agreed to with the TRUSTEES in order to
secure greater benefits or in respect of a period of past
service. The additional contributions shall be known as
his “ACCUMULATED SPECIAL CONTRIBUTIONS”
and shall be applied in terms of (2), (3), (4) and (5)
below.
(2)
The TRUSTEES shall keep a record of the MEMBER'S
ACCUMULATED SPECIAL CONTRIBUTIONS and
such
contributions
shall
be
debited
with
such
administration expenses as shall be determined by the
TRUSTEES and accumulated with interest at a rate
which shall be determined from time to time by the
TRUSTEES on the advice of the ACTUARY.
(3)
If the MEMBER retires in terms of Rule 4 of this
Annexure, then he shall become entitled to an
additional PENSION in respect of the period referred to
in Rule 8.2(1), which PENSION shall either be
calculated in the same manner as is provided for in this
Annexure or in such other manner as shall be agreed
by the MEMBER and the TRUSTEES on the advice of
the ACTUARY.
(4)
On the death of the MEMBER while in SERVICE, a
lump sum equal to his ACCUMULATED SPECIAL
- 100 CONTRIBUTIONS calculated in terms of Rule 8.2(2) at
the date of his death shall become payable in terms of
Rule 5 of this Annexure; provided that a QUALIFYING
SPOUSE may choose to use part or the whole of the
ACCUMULATED
SPECIAL
CONTRIBUTIONS
to
increase the pension benefits payable to such
QUALIFYING SPOUSE.
(5)
If the MEMBER is not qualified to retire in terms of
Rule 4 of this Annexure but leaves SERVICE for any
reason, then a lump sum equal to his ACCUMULATED
SPECIAL CONTRIBUTIONS calculated in terms of
Rule 8.2(2) at the date of his leaving SERVICE shall
become payable in terms of Rule 7 of the main body of
the RULES.
8.3
Contributions by the Employer
The EMPLOYER shall contribute to the FUND such amounts
as are agreed upon from time to time between the MAIN
EMPLOYER and the TRUSTEES. Such amounts shall not be
less than the amounts determined by the ACTUARY to be
necessary to ensure that the REGISTRAR'S requirements
with regard to the financial soundness of pension funds are
met.
8.4
Payment of Contributions
Contributions are payable to the FUND monthly, in arrears.
The EMPLOYER shall deduct the MEMBER’S contributions
from the MEMBER’S remuneration at the end of each payperiod. The first deduction shall be at the end of the pay-
- 101 period during which the MEMBER became a MEMBER in
terms of the RULES.
These contributions and the
EMPLOYER'S contributions in terms of Rule 8.3 shall be paid
over to the FUND within seven days of the end of the
calendar month to which such contributions relate, subject to
the provisions of Section 13A of the ACT. If contributions are
not paid to the FUND as required in terms of the ACT, the
EMPLOYER shall be required to pay late payment interest at
the rate prescribed by legislation. Any such interest shall be
included in the investment return on the assets of the FUND.
7.
Rule 12 shall be added to the Rules:
12.
Minimum Benefits
Notwithstanding any other provisions of these RULES, it is
specifically provided that after the SURPLUS APPORTIONMENT
DATE, the benefit paid to or in respect of a DEFINED BENEFIT
MEMBER whose benefits are determined in accordance with the
provisions of this Annexure C who ceases to be a MEMBER of the
FUND prior to retirement shall, subject to the provisions of
Section 14A(1)(b) of the ACT, not be less than his MINIMUM
INDIVIDUAL RESERVE.
- 102 ANNEXURE D
SPECIAL PROVISIONS APPLICABLE TO CATEGORY B MEMBERS
The RULES shall be varied as follows in respect of each CATEGORY B
MEMBER:
1.
Rule 5 shall be replaced by the following:
5.
DEATH
5.1
Death in Service prior to Normal Retirement Date
On the death of a CATEGORY B MEMBER while in SERVICE
prior to his NORMAL RETIREMENT DATE the following shall
be paid, subject to the provisions of Rules 3.1(3) and 9.3 of
the main body of the RULES:
(a)
a lump sum equal to three times the MEMBER'S
PENSIONABLE EMOLUMENTS;
(b)
a PENSION to his QUALIFYING SPOUSE equal to
(50-t)%
of
the
MEMBER'S
PENSIONABLE
EMOLUMENTS immediately before his death; provided
that the TRUSTEES locate the QUALIFYING SPOUSE
within twelve months of the MEMBER'S death, and
where t is equal to the total completed years whereby
the MEMBER'S age when he became a MEMBER of
the FUND or a PREVIOUS FUND is greater than 20
years;
(c)
a PENSION to the QUALIFYING CHILDREN of the
MEMBER equal in total to a percentage of the
PENSION payable in terms of (b) above according to
the following table:
- 103 -
Number of
Percentage of
QUALIFYING
PENSION payable to the
CHILDREN
QUALIFYING SPOUSE
1
50%
2
62,5%
3
75%
4 or more
87,5%
Provided that
(i)
the PENSION payable in respect of the QUALIFYING
CHILDREN of a MEMBER is doubled for any month for
which no PENSION is payable to a QUALIFYING
SPOUSE of the MEMBER in terms of (b) above. If a
PENSION ceases upon the death of a QUALIFYING
SPOUSE in accordance with the provisions of (b)
above, the QUALIFYING CHILDREN’S PENSION will
be doubled;
(ii)
after the last payment of any PENSION to a
QUALIFYING
SPOUSE
and/or
QUALIFYING
CHILD(REN), the TRUSTEES shall deduct the total
amount made up in terms of (a), (b) and (c) above from
the ADJUSTED MEMBER'S SHARE.
Any positive
difference shall be paid in accordance with Rule 5.7;
(iii)
if such MEMBER dies in SERVICE prior to his
NORMAL RETIREMENT DATE without leaving a
QUALIFYING SPOUSE and/or QUALIFYING CHILD,
an amount equal to the greater of his ADJUSTED
MEMBER’S
SHARE
and
three
times
his
PENSIONABLE EMOLUMENTS at the date of his
death shall be payable in terms of Section 37C of the
ACT;
- 104 -
(iv)
subject to the provisions of Section 37C of the ACT,
the QUALIFYING SPOUSE may elect that, instead of
the benefits in terms of Rule 5.1(a), (b) and (c), the
deceased
MEMBER’S
ADJUSTED
MEMBER’S
SHARE shall become payable as an annuity or
annuities and accordingly shall be transferred to an
INSURER, approved by the TRUSTEES; provided that
the QUALIFYING SPOUSE may commute up to onethird of the benefit for a lump sum.
Such annuity or annuities shall be purchased in the
name
of
the
QUALIFYING
QUALIFYING
CHILDREN
as
SPOUSE
decided
and/or
by
the
QUALIFYING SPOUSE from an INSURER, and
thereafter the FUND shall have no further liability in
respect
of
the
QUALIFYING
SPOUSE
and/or
QUALIFYING CHILDREN. Such liability will then rest
with the INSURER from whom such annuity or
annuities are purchased. The annuity or annuities so
purchased shall be compulsory, non-commutable and
non-assignable, payable for, in the case of the
QUALIFYING SPOUSE, life and the purchase shall be
subject to any further requirements of the REVENUE
AUTHORITIES if more than one annuity is purchased.
5.2
Death in Service on or after Normal Retirement Date
If a MEMBER who has deferred his retirement in terms of
Rule 4.4(1) of the main body of the RULES dies while still in
SERVICE, there shall be payable:
(a)
one-third of his ADJUSTED MEMBER'S SHARE at the
date of death; and
- 105 -
(b)
the benefits payable in terms of Rule 5.2 of the main
body of the RULES, calculated as if the MEMBER had
retired from SERVICE on the date on which he died
and had commuted one-third of his ADJUSTED
MEMBER’S SHARE for cash in terms of Rule 4.5(1) of
the main body of the RULES.
5.3
Death of a Pensioner in receipt of a Disability Pension
If a PENSIONER who is in receipt of a disability pension in
accordance with Rule 6 of this Annexure dies during such
period of disability and such death occurs prior to the NORMAL
RETIREMENT DATE, then
(a)
if
he
leaves
a
QUALIFYING
SPOUSE
and/or
QUALIFYING CHILDREN, an amount equal to three
times his PENSIONABLE EMOLUMENTS immediately
prior to the commencement of the disability benefits
shall be applied to increase the pension benefits
payable
to
QUALIFYING
the
QUALIFYING
CHILDREN
as
SPOUSE
decided
and/or
by
the
TRUSTEES;
or
(b)
if he does not leave a QUALIFYING SPOUSE and/or
QUALIFYING CHILDREN, an amount equal to three
times the PENSIONABLE EMOLUMENTS immediately
prior to the commencement of the disability benefits shall
be payable in terms of Section 37C of the ACT;
or
- 106 -
(c)
if there is no QUALIFYING SPOUSE but there are
QUALIFYING CHILDREN, the lump sum payable in
terms of (a) shall not be used to augment pensions, but
shall be placed in a trust to be paid out to the
QUALIFYING CHILDREN when they attain majority or at
such time as may be decided by the TRUSTEES;
provided that, at the discretion of the INSURER, the amount
of
three
times
the
PENSIONABLE
EMOLUMENTS
immediately prior to the commencement of the disability
benefits may become payable prior to the PENSIONER’S
death if his medical condition is such that the INSURER
agrees to this. In such case, the PENSIONER may elect to
commute not more than one-third of such amount for a lump
sum and the balance shall be applied to increase the
PENSIONER’S PENSION.
5.4
Death of a Pensioner required to retire at age 60 years
If the PENSIONER’S conditions of service determine that on
reaching age 60 years he is compelled to retire and he has
retired after reaching age 59 years and 6 months and dies
before the age of 65 years, then
(a)
a lump sum equal to three times the PENSIONABLE
EMOLUMENTS
which
the
PENSIONER
earned
immediately prior to his retirement shall be utilised to
increase
pension
benefits
to
his
QUALIFYING
SPOUSE and/or QUALIFYING CHILDREN;
(b)
if he does not leave a QUALIFYING SPOUSE and/or
QUALIFYING CHILDREN, an amount equal to three
- 107 times the PENSIONABLE EMOLUMENTS which the
PENSIONER
earned
immediately
prior
to
his
retirement shall be payable in terms of Section 37C of
the ACT;
(c)
if there is no QUALIFYING SPOUSE but there are
QUALIFYING CHILDREN, the lump sum payable in
terms of (a) above shall not be used to augment
pensions, but shall be placed in a trust to be paid out to
the QUALIFYING CHILDREN when they attain majority
or at such time as may be decided by the TRUSTEES.
5.5
Death of any other Pensioner
On the death of a PENSIONER who retired in terms of the
provisions of Rules 4.1 to 4.4, 6 or 7.2(3), his PENSION shall
cease as provided for in Rule 9.1(3). The following benefits
shall be payable:
(a)
a lump sum of R2 000, or such other amount as
decided by the TRUSTEES from time to time, subject
to the maximum amount permitted in terms of income
tax legislation;
(b)
a PENSION to his QUALIFYING SPOUSE, equal to
75% of the PENSION payable immediately prior to the
commencement of the PENSION to the QUALIFYING
SPOUSE;
(c)
a PENSION to the QUALIFYING CHILDREN of the
PENSIONER,
equal
to
a
percentage
of
the
PENSIONER'S PENSION as described in (b) above, in
accordance with the following table:
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Number of
Percentage of
QUALIFYING
PENSIONER'S PENSION
CHILDREN
described in (b) above
1
10,0%
2
15,0%
3
20,0%
4 or more
25,0%
If there is no QUALIFYING SPOUSE, the PENSION to
the QUALIFYING CHILDREN shall be double the
PENSION that would have been payable if there had
been a QUALIFYING SPOUSE;
(d)
after
the
last
PENSIONER,
QUALIFYING
payment
of
a
QUALIFYING
CHILDREN
PENSION
SPOUSE
has
been
to
a
and/or
made,
the
TRUSTEES shall deduct the total amount paid to the
PENSIONER,
his
QUALIFYING
SPOUSE
and
QUALIFYING CHILDREN, including any amount which
may have been paid in a lump sum and, if applicable,
that part of the PENSION purchased as an annuity or
annuities in terms of Rule 4.5(2)(c)(i), from the amount
of the ADJUSTED MEMBER'S SHARE. Should there
be any positive difference, such positive difference
shall be paid in accordance with Rule 5.7.
5.6
Payment
of
Pensions
to
Qualifying
Spouses
and
Qualifying Children
(1)
If the deceased MEMBER or PENSIONER leaves
more
than
one
QUALIFYING
SPOUSE,
the
- 109 TRUSTEES shall decide to which of them and in what
proportion the benefits shall be paid; provided that the
total QUALIFYING SPOUSES' PENSIONS payable
shall not be more than the PENSION that would have
been payable had there only been one QUALIFYING
SPOUSE.
(2)
PENSIONS in respect of QUALIFYING CHILDREN of
a MEMBER or PENSIONER shall be paid to or for the
benefit of such QUALIFYING CHILDREN in such
proportions as the TRUSTEES may decide.
(3)
Up to one-third of a PENSION to a QUALIFYING
SPOUSE or a QUALIFYING CHILD payable in terms of
this Rule 5, including any PENSION which is increased
in terms of Rule 5.3(a) or Rule 5.4(a), may be
commuted for a lump sum of such amount as
determined by the ACTUARY, in which case the
PENSION to which the QUALIFYING SPOUSE or
QUALIFYING CHILD is entitled shall be reduced
proportionately; provided that such commutation takes
place within 6 months after the death of the MEMBER
or PENSIONER.
5.7
Payment of Death Benefits
Payment of a death benefit which is not expressed in this Rule 5 to
be paid to a particular person, shall be made in terms of Section 37C
of the ACT. (The contents of Section 37C of the ACT are contained
in Annexure A to the RULES).
2.
Rule 6 shall be replaced by the following:
- 110 6.
DISABLEMENT
6.1
Disability Pension Benefits
If at any time prior to the NORMAL RETIREMENT DATE a
CATEGORY B MEMBER becomes disabled as described in
Rule 6.2 of this Annexure, the FUND shall pay a disability
pension, subject to the provisions of Rule 3.1(3).
The
disability pension shall be determined as:

65%
of
the
MEMBER'S
PENSIONABLE
EMOLUMENTS if payment of the disability pension
commences
more
than
10
years
before
the
MEMBER'S NORMAL RETIREMENT DATE;

A + B if payment of the disability pension commences
within
10
years
of
the
MEMBER'S
NORMAL
RETIREMENT DATE, where
A=
65*
(1-t/120)%
of
the
MEMBER'S
PENSIONABLE EMOLUMENTS;
B=
a PENSION, as calculated by the ACTUARY,
purchased by t/120 times the ADJUSTED
MEMBER'S SHARE;
t=
120 minus the total amount of full months
between the date on which payment of the
disability pension commences and the NORMAL
RETIREMENT DATE.
Payment of such disability pension shall commence after the
MEMBER has been declared disabled and all disability
pension payments which are payable before the MEMBER'S
NORMAL RETIREMENT DATE shall be subject to the
MEMBER'S continued state of disability.
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When a MEMBER in receipt of a disability pension reaches
his NORMAL RETIREMENT DATE, no retirement pensions
shall be paid, but the disability pension shall be continued as
if it were a retirement pension. If a MEMBER in receipt of a
disability pension dies after reaching NORMAL RETIREMENT
DATE, the provisions of Rule 5.2 of the main body of the
RULES shall apply.
6.2
Conditions of Disability
For the purposes of this Rule "disabled" shall mean that the
MEMBER, in the opinion of the TRUSTEES, has become
totally and permanently unable, due to injury or disease, to
pursue any occupation for which, in the opinion of the
TRUSTEES, he would be reasonably qualified by his
education, training and experience.
The Board of TRUSTEES reserves the right to take necessary
steps in respect of the monitoring, follow-up and re-evaluation
of the condition of a MEMBER in receipt of a disability
pension, at its discretion, in order to avoid abuse of such
benefit. Such steps may include the following measures:
(a)
ensuring that the MEMBER undergoes regular medical
treatment by a doctor, or other treatment by a qualified
person, where there may be a reasonable expectation
that such treatment may improve the MEMBER’S
condition;
(b)
making provision that the MEMBER provides proof of
his disability, to the satisfaction of the TRUSTEES and,
if necessary, thereafter regularly provides proof of his
continued disability up to and upon the attainment of
his NORMAL RETIREMENT AGE;
- 112 -
(c)
making provision for the MEMBER to provide proof to
the satisfaction of the TRUSTEES of real and
substantial loss of income from own employment and if
necessary, to provide regular proof thereafter of such
loss.
The provisions of Rule 7 of the main body of the RULES shall
apply to a disabled MEMBER who, before his NORMAL
RETIREMENT DATE, recovers sufficiently that he is no
longer considered to be disabled in terms hereof, and who
does not immediately return to the full-time SERVICE of the
EMPLOYER.
6.3
Death Benefit
A benefit determined in accordance with the provisions of
Rule 5.3 in Section 1 of this Annexure D shall be payable if a
CATEGORY B MEMBER dies while in receipt of a disability
pension benefit in terms of this Rule; provided that such benefit
may be payable prior to the death of such person if the
circumstances set out in the proviso to Rule 5.3 apply.
3.
Rule 8.2(1) shall be replaced by the following:
8.2
(1)
The EMPLOYER shall contribute the following amounts to the
FUND in respect of each MEMBER in its SERVICE who has
not reached NORMAL RETIREMENT DATE:
(a)
7,5%
of
each
MEMBER'S
PENSIONABLE
EMOLUMENTS which shall be credited towards the
MEMBER’S SHARE; and
- 113 (b)
4%
of
each
MEMBER’S
PENSIONABLE
EMOLUMENTS, to be applied to meet the cost of the
death benefits set out in Rule 5.1 and Rule 6 of this
Annexure.
4.
For the purposes of this Annexure D, the definition “Disability Arrangement”
shall be added to Rule 1.5:
DISABILITY ARRANGEMENT : a separate disability arrangement set up by
an EMPLOYER to provide disablement income benefits for EMPLOYEES
who become CATEGORY B MEMBERS in accordance with the provisions of
Rule 3.1(4);
5.
In the case of a CATEGORY B MEMBER who became a MEMBER in
accordance with the provisions of Rule 3.1(4), Rule 6 shall be replaced by the
following:
6.
DISABILITY BENEFITS
In the case of a MEMBER who is in receipt of a disability income
benefit from the DISABILITY ARRANGEMENT, the following
provisions shall apply:
(a)
the MEMBER will remain a MEMBER of the FUND,
contributions by and on behalf of him will continue to be
payable and he will remain entitled to rights and benefits
in terms of the RULES;
(b)
the MEMBER’S PENSIONABLE EMOLUMENTS will, for
the purposes of the RULES, be 100/65 times the amount
of the disability income that he received from the
DISABILITY ARRANGEMENT;
- 114 (c)
the MEMBER will retire in terms of Rule 4.1 of the main
body of the RULES upon his attainment of his NORMAL
RETIREMENT DATE, unless his disability income ceases
prior to that date;
(d)
if the MEMBER’S disability income ceases to be payable
prior to his NORMAL RETIREMENT DATE, one of the
following shall apply, as the case may be:
(i)
the MEMBER shall remain a MEMBER of the
FUND
and,
notwithstanding
any
other
provisions of the RULES, shall be eligible for the
disability benefits set out in Section 2 of this
Annexure; or
(ii)
the MEMBER shall receive a withdrawal benefit
in terms of Rule 7 of the main body of the
RULES; or
(iii)
if the MEMBER qualifies, he shall receive a
retirement benefit in terms of Rule 4 of the main
body of the RULES; or
(iv)
benefits in terms of Rule 5.1 of this Annexure
shall be payable, if applicable.