THE NGK OFFICIALS PENSION FUND INTERIM RULING IN TERMS OF SECTION 30J OF THE PENSION FUNDS ACT OF 1956

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Mary Bridges
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1 IN THE TRIBUNAL OF THE PENSION FUNDS ADJUDICATOR In the complaint between: CASE NO: PFA/KZN/398/99/KM A.M.E. STEYN Complainant and THE NGK OFFICIALS PENSION FUND Respondent INTERIM RULING IN TERMS OF SECTION 30J OF THE PENSION FUNDS ACT OF This is a complaint brought in terms of section 30A of the Pension Funds Act 24 of 1956 hereafter referred to as the Act concerning a dispute over the rule under which the complainant is entitled to take a withdrawal benefit. 2. The complainant is Dr A.M.E. Steyn, a member of the respondent and formerly employed by the Christelike Maatskaplike Raad as a social worker from 1 February The respondent is the Nederduitse Gereformeerde Kerk Officials Pension Fund (hereafter referred to as the fund ), a pension fund duly registered under the Act. 4. The complainant is represented by Lifetime Financial Enterprises, while the fund is represented by Sanlam Employee Benefits. 5. No hearing has been held in this matter. An investigation under my supervision was conducted by my assistant adjudicator, Karin Mackenzie. Accordingly, in determining this matter, I have relied exclusively on the documentary evidence and written submissions gathered during the course of our investigations.

2 Page 2 6. The complainant resigned from her employment on 15 March 2000 due to dissatisfaction with leave calculations and payments and the apparent lack of cooperation in addressing these problems on the part of management. As a result of her resignation she became entitled to a withdrawal benefit from the fund. The present dispute centers around which rule is of application. 7. The fund contends that resignation is governed by rule 9 which states that a member who resigns prior to retirement and who is not entitled to any other benefit under the rules of the fund will be entitled to one of the benefit options set out in rule The express provisions of rule 9 are as follows: Wanneer n Lid voor sy Normale Aftreedatum die diens van die Werkgewer verlaat en nie op enige ander voordeel kragtens die Fonds geregtig is nie, sal hy geregtig wees op een van die volgende opsies in artikel 9.1 en 9.2 hieronder uiteengesit; met dien verstande dat die opsie onder artikel 9.2 slegs beskikbaar is aan n Lid wat reeds tien jaar Pensioengewende Diens voltooi het: 9.1 Kontantvoordeel: Indien n Lid die diens van die Werkgewer uit sy eie vrye wil verlaat of vir redes anders as die wat in artikel genoem is deur die Werkgewer ontslaan word, word hy geregtig op n kontantvoordeel wat as volg bepaal word: (i) In die geval van n Lid wat onmiddellik voor die Aanvangsdatum n lid van n Voormalige Pensionfonds was, n bedrag gelyk aan A+C+D met Rente plus B, met Rente; (ii) In die geval van n Lid wat op of na 1 Januarie 1988 en na bereiking van ouderdom 55 n Lid van die Fonds word, n bedrag gelyk aan A+D, met Rente plus B+E, met Rente; (iii) In die geval van enige ander Lid, n bedrag gelyk aan A+D, met Rente plus B, met Rente Indien n Lid se diens by die Werkgewer, volgens die uitsluitlike oordeel van die Werkgewer, beëinding word as gevolg van personeelbesnoeiing, herorganisasie

3 Page 3 van die Werkgewer se bedrywighede of die afskaffing van die Lid se pos, word sodanige Lid geregtig op n kontantvoordeel gelyk aan: (i) (ii) die reserwewaarde van die Lid se opgelope voordeel in die Fonds, soos deur die Aktuaris bepaal, in die geval van n Lid wat minstens 15 jaar Pensioengewende diens voltooi het, of 200% van A+C+E, met Rente plus B, met Rente, in die geval van enige ander Lid Vir doeleindes van hierdie artikel 9.1 beteken: A, die Lid se eie bydraes tot die Fonds ooreenkomstig artikel 5.1.1, plus in die geval van n Lid wat te eniger tyd voor sy uitdienstrede n ongeskiktheidsinkomste kragtens die Sinodale Bystandsfonds ontvang het, die bydraes ooreenkomstig artikel wat die Lid tydens sy ongeskiktheid tot die Fonds sou gemaak het indien hy nie sodanige ongeskiktheidsvoordele ontvang het nie; B, die Lid se eie bydraes tot die Fonds ooreenkomstig artikel C, die Lid se Oordragkrediet; D, 10% van A vir elke voltooide jaar meer as vyf waartydens die Lid tot die Fonds bygedra het, met n maksimum van 100% van A; E, die gedeelte van die Reserwewaarde wat deur die Lid se eie bydraes verteenwoordig word. 9.2 Uitgestelde Pensioen: n Pensioen betaalbaar vanaf die Normale Aftreedatum en gelyk aan die pensioenekwivalent, soos deur die Aktuaris bepaal, van die Kontantvoordeel soos omskryf in artikel Betaling van die uitgestelde pensioen: Indien die Lid die opsie wat in terme van artikel 9.2 hierbo beskikbaar is uitoefen, sal die volgende van toepassing wees: Indien die Lid voor die Normale Aftreedatum te sterwe kom sal die kontantvoordeel ingevolge artikel 9.1 met Rente saamgestel tot die datum van afsterwe, betaalbaar wees;

4 Page Indien die uitgestelde pensioen minder as R per jaar beloop sal die opsie onder artikel 9.2 nie beskikbaar wees nie; Die bepalings met betrekking tot die betaling van pensioene soos in hierdie reglement vervat is ook van toepassing op die betaling van die uitgestelde pensioen; Die uitgestelde pensioen sal vanaf die Normale Aftreedatum betaal word. 9.4 Betaling van die kontantvoordeel: Indien die Lid die opsie wat ingevolge artikel 9.1 hierbo beskikbaar is uitoefen, mag die Beherende Werkgewer bepaal dat n wagtydperk van hoogstens twaalf maande sal geld ten opsigte van die uitbetaling van die kontantvoordeel; met dien verstande dat Rente vir die wagtydperk bygereken sal word. 9. The complainant contends that she is entitled to a benefit under rule 13 governing transfers. Her contention is that rule provided a benefit equivalent to actuarial value, which would be more favourable. It is further her case that the transfer referred to in rule 13 is one of the other benefits referred to in rule 9, and that if she intends to transfer her benefit into a preservation fund she qualifies under this rule. 10. Rule 13.4 states: Oordragte na of van ander fondse: Die Fonds is by magte om oordragte van gelde te ontvang van ander goedgekeurde fondse of om oordragte van gelde te maak aan ander goedgekeurde pensioen-, voorsorg- of uittredingsannuiteitsfondse op sodanige wyse en onderworpe aan sodanige bepalings as wat die Trustees in oorleg met die Aktuaris mag bepaal, met dien verstande dat in die geval van n persoon wat op of na 1 Januarie 1988 en na bereiking van ouderdom 55 jaar n Lid van die Fonds word en sy Reserwewaarde na die Fonds oorgeplaas het, sodanige Reserwewaarde aangewend sal word om die Lid se Pensioengewende Diens te verleng met sodanige tydperk as wat die Trustees in oorleg met die Aktuaris mag besluit. 11. The fund s response to the contention that the complainant is entitled to elect a benefit under rule 13 is that the transfers referred to are those usually associated

5 Page 5 with a sale of business or an employer or fund restructuring which must be sanctioned by the Registrar of Pensions in terms of section 14 of the Pension Funds Act 24 of According to the fund this rule does not purport to deal with voluntary departures such as resignations which are clearly dealt with in the early withdrawal rule (rule 9). 12. It seems clear to me that the wording of rule 13.4 does not specifically contemplate only group transfers. On a normal grammatical construction the rule empowers the board of management to take receipt of funds from other institutions on behalf of members or to make transfers of funds on behalf of members to other pension, preservation or annuity funds. There is no inherent limitation in the rule that confines it to section 14 transfers. However, I cannot agree with the complainant that this rule confers a specific benefit, much less does it provide that a member is entitled to his or her actuarial reserve value. The rule provides a mode or mechanism for payment and not a substantive benefit entitlement. The complainant s benefit entitlement is spelled out in rule 9 above. 13. As the complainant has been a member of the fund for more than fifteen years she is past the vesting period for the 100% enhancement on her contributions. Her benefit was therefore calculated at R74 075,00 in terms of rule There is, however, a discretion on the part of the board to increase benefits in appropriate circumstances conferred by rule 13.3 which states as follows: 14.3 Groter voordele: In oorleg met die Werkgewer mag die Trustees groter voordele toeken as wat hierin bepaal word, mits die finansiële implikasies van enige sodanige bykomende voordele eers deur die Aktuaris ondersoek is en die koste daaraan verbonde deur die Werkgewer aan die Fonds betaal word op sodanige wyse as wat die Trustees en die Werkgewer mag ooreenkom. Dir Bestuurder moet so gou doenlik besonderhede aangaande enige sodanige toekenning aan die Kommissaris van Binnelandse Inkomste verskaf.

6 Page The fund was asked to revert to my office by the 16 November 2001 in answer to the question whether increased benefits under this rule had been or would be considered. To date I have heard nothing further and therefore it is necessary to issue a directive that the board furnish this office with the requisite details to enable an assessment to be made as to whether that discretion has been properly exercised, or exercised at all. Thereafter I shall make a determination of whether the complainant is entitled to an enhanced benefit. 16. My interim ruling is therefore as follows: The respondent is hereby directed to furnish this office with the following information within two weeks of date of this ruling: 16.1 Whether the board of management considered exercising its discretion in terms of rule 13.3 to increase the complainant s pension benefit; 16.2 If the board did not consider exercise its discretion then the reasons for the failure to do so; 16.3 If the board did consider exercising its discretion then the factors that were taken into account in the exercise of that discretion as well as the outcome of the decision are required. Dated and signed at CAPE TOWN on the 5th DECEMBER 2001 JOHN MURPHY Pension Funds Adjudicator

THE ANDREW MURRAY DUTCH REFORMED CHURCH DETERMINATION IN TERMS OF SECTION 30M OF THE PENSION FUNDS ACT OF 1956

THE ANDREW MURRAY DUTCH REFORMED CHURCH DETERMINATION IN TERMS OF SECTION 30M OF THE PENSION FUNDS ACT OF 1956 IN THE TRIBUNAL OF THE PENSION FUNDS ADJUDICATOR In the complaint between: CASE NO: PFA/GA/53/98/NJ Ds B H S CROSS Complainant and DIE SINODALE FONDS VAN DIE NEDERDUITSE GEREFORMEERDE KERK VAN TRANSVAAL