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Explore critical decisions in pension law curated by Hunter Thyne of Hunter Employee Benefits Law. Learn about court cases and implications for members and beneficiaries.
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PENSION LAWYERS ASSOCIATIONRecent Decisions of Interest Prepared by Hunter Thyne director of Hunter Employee Benefits Law (Pty) Ltd
Government Employees Pension Fund v Francina Herculina Bezuidenhout / Phillip Johan Bezuidenhout • Transvaal Provincial Division • Questions Raised • Can a maintenance court issue anti-dissipation interdicts? • Mngadi v Beacon Sweets & Chocolates Provident Fund • Magewu v Zozo • Soller v The Maintenance Magistrate of Wynberg Held: Fund can be interdicted against paying benefit to member in favour of minor child in respect of maintenance
Government Employees Pension Fund v Francina Herculina Bezuidenhout / Phillip Johan Bezuidenhout • Can a retirement fund be ordered to administer the payment of maintenance? • There is no legal principle in terms of which “an outsider” can be ordered to perform some duty for the benefit of someone else. • Fund NOT a party to the Maintenance Court proceedings therefore it could not indicate whether able and willing to do administration
Government Employees Pension Fund v Francina Herculina Bezuidenhout / Phillip Johan Bezuidenhout • Maintenance Court to therefore issue rule nisi calling on fund to give reasons why it cannot do administration. • If fund contend unable to do administration the Maintenance Court compelled to take this into account.
Government Employees Pension Fund v Francina Herculina Bezuidenhout / Phillip Johan Bezuidenhout • Final Order • GEPF calculate benefit • Pay amount to Guardians Fund • Master High Court authorised to receive money • Master ordered make payments to minors guardians of • Arrear maintenance • Monthly maintenance • When duty to support ceases, balance to be paid member.
Government Employees Pension Fund v Francina Herculina Bezuidenhout / Phillip Johan Bezuidenhout • Comments • Increase legal fees for funds in attending to rule nisi issues • Time spent by Fund officials and maintenance court • Q: What happens when fund member leaves the fund and there is a court order against the fund? • Tax issues?
Kramer v Pension Funds Adjudicator and Another (WLD) Witwatersrand Local Division • Facts • Issues • Termination of membership • Look at rules • In this instance, membership dependant on: • Member “in receipt” of PH benefit, and • Fund receiving contributions, and • Member not attaining retirement age
Kramer v Pension Funds Adjudicator and Another (WLD) (cont) • Held that “in receipt of” meant actual receipt. • Why? • Rules govern the Fund’s liability to member at a specific point in time : retirement, withdrawal, death…..transfer ??? • “(t)here is a need for certainty; certainty through verification, which, in turn, is achieved through ease the simplicity of the checking procedure”.
Kramer v Pension Funds Adjudicator and Another (WLD) (cont) Comments • Termination membership important • S14 delays and termination? • Logical and pragmatic approach
AM Mahlati v Metropolitan Preservation Provident fund (PFA) • Pension Funds Adjudicator Facts • Withdrew from Fund. • Small amount paid to member, balance to a preservation fund • Preservation fund member later requested further withdrawal (the one withdrawal) from the preservation fund • Pres fund did not allow withdrawal • Pres fund rules made no reference to “one withdrawal” rule or SARS circulars or practices.
AM Mahlati v Metropolitan Preservation Provident fund (PFA) (cont) • Fund argued that refusal of withdrawal in accordance with Retirement Fund Practice Note RF 1/98. • Held : • rules made no reference to RF 1/98 and • rules did not limit withdrawals. • RF 1/98 by itself cannot stop member from asking for withdrawal RF notes “merely set out the requirements to be complied with by the fund for its approved tax status. • Practice notes do not affect the fund’s obligations, these are set out in the fund rules
AM Mahlati v Metropolitan Preservation Provident fund (PFA) (cont) Comments • Audit rules IOT ensure continued tax approval. • Have general clause that states that any payment subject to the requirements of the South African Revenue Services, as issued from time to time.
N B Mentz v Investec Investment Linked Retirement Annuity Fund • Pension Fund Adjudicator • Facts • M invested R177K into fund • Got investment acceptance letter on 22 July 2005 • 10 August 2005 want to cancel. • Advised, by broker, that he had “30 day cooling off period” • Fund refused to repay money
N B Mentz v Investec Investment Linked Retirement Annuity Fund (Pension Fund Adjudicator) Held • 30 day “cooling off period” applies to LTA • No Fund rule giving “30 days cooling off period” • Fund correct in not paying money back
N B Mentz v Investec Investment Linked Retirement Annuity Fund (Pension Fund Adjudicator) Comments • Cooling off w.r.t GN18 annuities. • Payment to annuitant less market movements. • Wrong. If “cooling off period apply” monies back to fund. • Tax issues ???
Pension Lawyers April 2006 • Questions ? • Thank you.