Presentation on theme: "PENSION LAWYERS ASSOCIATION Recent Decisions of Interest"— Presentation transcript:
1PENSION LAWYERS ASSOCIATION Recent Decisions of Interest Prepared by Hunter Thynedirector ofHunter Employee Benefits Law (Pty) Ltd18 April 2006
2Government Employees Pension Fund v Francina Herculina Bezuidenhout / Phillip Johan Bezuidenhout Transvaal Provincial DivisionQuestions RaisedCan a maintenance court issue anti-dissipation interdicts?Mngadi v Beacon Sweets & Chocolates Provident FundMagewu v ZozoSoller v The Maintenance Magistrate of WynbergHeld: Fund can be interdicted against payingbenefit to member in favour of minorchild in respect of maintenance
3Government 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
4Government 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.
5Government Employees Pension Fund v Francina Herculina Bezuidenhout / Phillip Johan Bezuidenhout Final OrderGEPF calculate benefitPay amount to Guardians FundMaster High Court authorised to receive moneyMaster ordered make payments to minors guardians ofArrear maintenanceMonthly maintenanceWhen duty to support ceases, balance to be paid member.
6Government Employees Pension Fund v Francina Herculina Bezuidenhout / Phillip Johan Bezuidenhout CommentsIncrease legal fees for funds in attending to rule nisi issuesTime spent by Fund officials and maintenance courtQ: What happens when fund member leaves the fund and there is a court order against the fund?Tax issues?
7Kramer v Pension Funds Adjudicator and Another (WLD) Witwatersrand Local DivisionFactsIssuesTermination of membershipLook at rulesIn this instance, membership dependant on:Member “in receipt” of PH benefit, andFund receiving contributions, andMember not attaining retirement age
8Kramer 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”.
9Kramer v Pension Funds Adjudicator and Another (WLD) (cont) CommentsTermination membership importantS14 delays and termination?Logical and pragmatic approach
10AM Mahlati v Metropolitan Preservation Provident fund (PFA) Pension Funds AdjudicatorFactsWithdrew from Fund.Small amount paid to member, balance to a preservation fundPreservation fund member later requested further withdrawal (the one withdrawal) from the preservation fundPres fund did not allow withdrawalPres fund rules made no reference to “one withdrawal” rule or SARS circulars or practices.
11AM 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 andrules 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
12AM Mahlati v Metropolitan Preservation Provident fund (PFA) (cont) CommentsAudit 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.
13N B Mentz v Investec Investment Linked Retirement Annuity Fund Pension Fund AdjudicatorFactsM invested R177K into fundGot investment acceptance letter on 22 July 200510 August 2005 want to cancel.Advised, by broker, that he had “30 day cooling off period”Fund refused to repay money
1430 day “cooling off period” applies to LTA N B Mentz v Investec Investment Linked Retirement Annuity Fund (Pension Fund Adjudicator)Held30 day “cooling off period” applies to LTANo Fund rule giving “30 days cooling off period”Fund correct in not paying money back
15N B Mentz v Investec Investment Linked Retirement Annuity Fund (Pension Fund Adjudicator) CommentsCooling off w.r.t GN18 annuities.Payment to annuitant less market movements.Wrong. If “cooling off period apply” monies back to fund.Tax issues ???