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18 April 2006 PENSION LAWYERS ASSOCIATION Recent Decisions of Interest Prepared by Hunter Thyne director of Hunter Employee Benefits Law (Pty) Ltd.

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Presentation on theme: "18 April 2006 PENSION LAWYERS ASSOCIATION Recent Decisions of Interest Prepared by Hunter Thyne director of Hunter Employee Benefits Law (Pty) Ltd."— Presentation transcript:

1 18 April 2006 PENSION LAWYERS ASSOCIATION Recent Decisions of Interest Prepared by Hunter Thyne director of Hunter Employee Benefits Law (Pty) Ltd

2 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

3 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

4 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.

5 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.

6 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?

7 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

8 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”.

9 Kramer v Pension Funds Adjudicator and Another (WLD) (cont) Comments  Termination membership important  S14 delays and termination?  Logical and pragmatic approach

10 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.

11 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

12 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.

13 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 August 2005 want to cancel. Advised, by broker, that he had “30 day cooling off period” Fund refused to repay money

14 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

15 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 ???

16 Pension Lawyers April 2006  Questions ?  Thank you.


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