Schedule 1 (Regulation 29)
Board of Trustees and administrative matters
All structures established as contemplated in these Regulations, government institutions, organs of state, public entities and the employees of the aforementioned who are involved in the subject matter concerned, in the Province, must comply with the provisions of this Schedule.Part 1 – General provisions
1. Duty of Principal Officer
(1)The Principal Officer is responsible for-(a)ensuring-(i)compliance with all provisions relating to appointment and election contemplated in the Regulations and this Schedule; and(ii)that the internal auditors undertake an audit of the election process contemplated in Part 2 and submit a report to him or her; and(b)submitting the internal auditor’s report as contemplated in paragraph (a)(ii) -(i)to the audit sub-committee of the Board of Trustees for consideration; and(ii)thereafter to the Board of Trustees for consideration and approval.(2)The Principal Officer may draft and approve internal policies relating to the administration and management of the Fund or the Board of Trustees: Provided that such internal policies must be-(a)aligned to, and consistent with, any guidelines that may be issued by the Financial Sector Conduct Authority from time to time; and(b)approved by the Board of Trustees if such internal policies relate to the administration and management of the Board of Trustees.2. Annual Information Meetings
(1)An Annual Information Meeting of the Fund, which all members, pensioners and councillors from associated municipalities are eligible to attend, may be held at such place and on such date as the Board of Trustees determine from time to time: Provided that, in the event that an Annual Information Meeting is not held in a particular year, the Board of Trustees must utilise another form of communication with members, pensioners and councillors of associated municipalities.(2)At every Annual Information Meeting, the Chairperson must-(a)provide the-(ii)statutory or interim valuation reports, as the case may be; and(iii)financial statements,as presented by the Board of Trustees, for consideration and noting; and(b)conduct any other business relating to the management and operation of the Fund.(3)The Principal Officer must transmit a copy of the English text of the annual report and the financial statements of the Fund to the responsible Member of the Executive Council and to each associated municipality at least 45 days prior to the Annual Information Meeting.(4)Each member of the Fund is, upon written request to the Principal Officer, entitled to receive a copy of the annual report and the financial statements of the Fund in either the English or isiZulu text.Part 2 – Board of Trustees
3. Continuation of Board of Trustees
Subject to the provisions of section 8(1) of the Act and regulation 21, the members of the Board of Trustees of the Fund on the date of commencement of these Regulations constitute the Board of Trustees of the Fund.4. Appointment and election of municipal representatives and alternates to Board of Trustees
The municipal representatives elected as contemplated in item 4 of Schedule 1 to the Superannuation Fund Regulations, are the municipal representatives of the Fund.5. Appointment and election of member representatives and alternates to Board of Trustees
(1)Four member representatives must be elected to the Board of Trustees in the first year of every five year cycle, with the first five year cycle to commence in 2021.(2)(a)The Principal Officer must invite members of the Fund, without limitation of the number of nominees, to nominate member representative nominees for election to the Board of Trustees on the same date in each five-year cycle as contemplated in sub-item (1).(b)Every nominee-(i)must-(aa)be a South African resident;(bb)be in a financially sound position;(cc)indicate his or her willingness to act as a representative by accepting the nomination on the nomination form;(dd)indicate that he or she is prepared to travel and able to attend meetings of the Board of Trustees and sub-committees;(ee)indicate that he or she is prepared and able to attend training;(ff)be accessible by telephone, fax and e-mail;(gg)authorise the Fund to investigate his or her eligibility; and(hh)attach his or her curriculum vitae to the nomination form; and(ii)may not-(aa)be an unrehabilitated insolvent; or(bb)within the previous 10 years, have been convicted in the Republic of South Africa or elsewhere of theft, fraud, forgery or uttering a forged document, perjury, an offence under the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004), an offence under the Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001), or any offence involving dishonesty.(3)The Principal Officer must-(a)by not later than three months after the commencement date of the Act, the promulgation and commencement dates of these Regulations, and the date of approval of these Regulations by the Financial Sector Conduct Authority, whichever occurs the last, and thereafter on the same date in the first year of each five-year cycle as contemplated in sub-item (1), circulate the-(i)member representative nominations received in accordance with sub-item (2); and(ii)curricula vitae of the persons nominated in accordance with sub-item (2),to all members of the Fund together with ballot papers containing the names of all member representative nominees to enable a ballot; and(b)conduct the ballot in a fair and impartial manner.(4)A member may not vote for more than four members.(5)Not more than two members may be elected from any one municipality, irrespective of the number of vacancies on the Board of Trustees.(6)(a)The four member representative nominees of the Fund who receive the-(i)highest number of votes, numerically, are deemed to be duly elected as the member representatives and declared as such; and(ii)second highest number of votes, numerically, are deemed to be the alternates.(b)Any ballot paper containing more names than the stipulated number of votes for the member representatives and the alternates, is-(i)deemed to be a spoilt paper; and(ii)not taken into account in determining the results of the ballot.(7)In the event of an equality of votes, the Principal Officer must determine the result by lot in the following manner:(a)the Principal Officer, after the other members of the Board of Trustees have been appointed in accordance with this Schedule, must forthwith proceed, in an open and transparent manner, to determine by lot, which of the four member representatives who received an equality of votes must be elected; and(b)the Principal Officer must conduct the lot by-(i)ensuring that the name of each one of the member representative nominees in respect of whom there is an equality of votes as contemplated in this sub-item, is written on a separate piece of paper of equal size in identical shape and colour;(ii)displaying the pieces of paper contemplated in sub-paragraph (i) to every member of the Board of Trustees who is present at the place where the lot is being conducted who is desirous of inspecting any such piece of paper;(iii)folding every such piece of paper in such a manner that the name thereon is not visible, and placing all such pieces of paper in an empty container;(iv)appointing an impartial person as the drawer to draw the number of pieces of paper from such container, equal to the number of vacancies of member representatives on the Board of Trustees;(v)shaking the container in such a manner as to thoroughly mix the pieces of paper therein, and holding such container in such a position that the drawer is unable to see the pieces of paper inside, whereafter the drawer must draw the number of pieces of paper as contemplated in sub-paragraph (iv) from the container and hand them to the Principal Officer without unfolding any of them; and(vi)unfolding each of the pieces of paper handed to him or her as contemplated in sub-paragraph (v), reading out the name or names, as the case may be, written thereon and displaying every such piece of paper to every member of the Board of Trustees who is present at the place where the lot is being conducted and who is desirous of inspecting the same.(8)In the event that-(a)a member representative vacancy arises on the Board of Trustees, it has the power to appoint an alternate member representative, according to the number of vacancies, from the respective alternates elected in accordance with sub-item (6)(a)(ii): Provided that the appointed alternate member representative must be from the alternates elected at elections held in accordance with this item immediately preceding the date upon which such vacancy arises;(b)there is no alternate to fill such vacancy as contemplated in paragraph (a), the vacancy must be filled by the appointment of the member representative nominee receiving the-(i)next highest number of votes after the member representative and the alternate who had previously been appointed to the Board of Trustees, as the member representative to the Board of Trustees; and(ii)next highest number of votes after the member representative nominee contemplated in sub-paragraph (i), as the alternate of the member representative to the Board of Trustees; and(c)there is no member representative alternate or nominee contemplated in paragraph (a) or (b), as the case may be, the Board of Trustees is entitled, at its discretion, to appoint an independent trustee to fill such vacancy: Provided that, for purposes of this sub-item, an independent trustee means a person who is not one of the following:(ii)a municipal representative; or(iii)a pensioner representative,of the Fund.6. Appointment and election of pensioner representatives and alternates to Board of Trustees
(1)Two pensioner representatives must be elected to the Board of Trustees in the first year of every five-year cycle, the first of which commences in 2021.(2)(a)The Principal Officer must invite pensioners of the Fund, without limitation of the number of nominees, to nominate pensioner representative nominees for election to the Board of Trustees, on the same date in each five-year cycle as contemplated in sub-item (1).(b)Every nominee-(i)must-(aa)be a South African resident;(bb)be in a financially sound position;(cc)indicate his or her willingness to act as a representative by accepting the nomination on the nomination form;(dd)indicate that he or she is prepared to travel and able to attend meetings of the Board of Trustees and sub-committees;(ee)indicate that he or she is prepared and able to attend training;(ff)be accessible by telephone, fax and e-mail;(gg)authorise the Fund to investigate his or her eligibility; and(hh)attach his or her curriculum vitae to the nomination form; and(ii)may not-(aa)be an unrehabilitated insolvent; or(bb)within the previous 10 years, have been convicted in the Republic of South Africa or elsewhere of theft, fraud, forgery or uttering a forged document, perjury, an offence under the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004), an offence under the Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001), or any offence involving dishonesty.(3)The Principal Officer must-(a)by not later than three months after the commencement date of the Act, the promulgation and commencement dates of these Regulations, and the date of approval of these Regulations by the Financial Sector Conduct Authority, whichever occurs the last, and thereafter on the same date in the first year of each five-year cycle as contemplated in sub-item (1), circulate the-(i)pensioner representative nominations received in accordance with sub-item (2); and(ii)curricula vitae of the persons nominated in accordance with sub-item (2),to all pensioners of the Fund together with ballot papers containing the names of all pensioner representative nominees to enable a ballot; and(b)conduct the ballot in a fair and impartial manner.(4)A pensioner may not vote for more than two pensioner representative nominees, irrespective of the number of vacancies on the Board of Trustees.(5)(a)The two pensioner representative nominees in the Fund who receive the-(i)highest number of votes, numerically, are deemed to be duly elected as the pensioner representatives and declared as such; and(ii)second highest number of votes, numerically, are deemed to be the alternates.(b)Any ballot paper containing more names than the stipulated number of votes for the representatives and the alternates, is-(i)deemed to be a spoilt paper; and(ii)not taken into account in determining the results of the ballot.(6)In the event of an equality of votes, the Principal Officer must determine the result by lot in the following manner:(a)the Principal Officer, after the other members of the Board of Trustees have been appointed in accordance with this Schedule, must forthwith proceed, in an open and transparent manner, to determine by lot, which of the pensioner representative nominees who received an equality of votes must be elected; and(b)the Principal Officer must conduct the lot by-(i)ensuring that the name of each one of the pensioner representative nominees in respect of whom there is an equality of votes as contemplated in this sub-item, is written on a separate piece of paper of equal size in identical shape and colour;(ii)displaying the pieces of paper contemplated in sub-paragraph (i) to every member of the Board of Trustees who is present at the place where the lot is being conducted who is desirous of inspecting any such piece of paper;(iii)folding every such piece of paper in such a manner that the name thereon is not visible, and placing all such pieces of paper in an empty container;(iv)appointing an impartial person as the drawer to draw the number of pieces of paper from such container, equal to the number of vacancies of pensioner representatives on the Board of Trustees;(v)shaking the container in such a manner as to thoroughly mix the pieces of paper therein, and holding such container in such a position that the drawer is unable to see the pieces of paper inside, whereafter the drawer must draw the number of pieces of paper as contemplated in sub-paragraph (iv) from the container and hand them to the Principal Officer without unfolding any of them; and(vi)unfolding each of the pieces of paper handed to him or her as contemplated in sub-paragraph (v), reading out the name or names, as the case may be, written thereon and displaying every such piece of paper to every member of the Board of Trustees who is present at the place where the lot is being conducted and who is desirous of inspecting the same.(7)In the event that-(a)a pensioner representative vacancy arises on the Board of Trustees, it has the power to appoint an alternate pensioner representative, according to the number of vacancies, from the respective pensioner representative alternates elected in accordance with sub-item (5)(a)(ii): Provided that the appointed alternate pensioner representative must be from the alternates elected at elections held in accordance with this item immediately preceding the date upon which such vacancy arises;(b)there is no alternate to fill such vacancy as contemplated in paragraph (a), the vacancy must be filled by the appointment of the pensioner representative nominee receiving the-(i)highest number of votes after the pensioner representative and the alternate who had previously been appointed to the Board of Trustees, as the pensioner representative to the Board of Trustees; and(ii)next highest number of votes after the pensioner representative contemplated in sub-paragraph (i), as the alternate of the member representative to the Board of Trustees; and(c)there is no pensioner representative alternate or nominee contemplated in paragraph (a) or (b), as the case may be, the Board of Trustees is entitled, at its discretion, to appoint an independent trustee to fill such vacancy: Provided that, for purposes of this sub-item, an independent trustee means a party who is not one of the following:(ii)a municipal representative; or(iii)a pensioner representative,of the Fund.7. Appointment of additional member and alternate to Board of Trustees
(1)The responsible Member of the Executive Council may appoint a-(a)person with specialised practical experience in, and knowledge of, the control and investment of trust money, as an additional member of the Board of Trustees; and(b)similarly qualified person as an alternate to the additional member appointed in accordance with paragraph (a),subject to sub-items (2) and (3).(2)The additional member and alternate contemplated in sub-item (1)-(a)must be appointed by the responsible Member of the Executive Council-(ii)in the event of the resignation from office or death of such member or alternate, as a successor to such member or alternate;(b)are not eligible for election as Chairperson or Vice-Chairperson of the Board of Trustees;(c)must be paid an attendance and travelling allowance by the Fund in accordance with the tariffs in force from time to time; and(d)for the purposes of these Regulations, but subject to the provisions of this item, are deemed to be elected members of the Board of Trustees.(3)The Fund is not responsible for meeting any additional remuneration which may be determined by the responsible Member of the Executive Council for, or in respect of, such additional member or his or her alternate.8. Assumption of office, retirement, cessation and termination of term of office
(1)Subject to the provisions of this item, the term of office of members of the Board of Trustees-(a)commences when such members have been declared duly elected by the Principal Officer as contemplated in this Schedule; and(b)automatically ceases five years after the date of election, after the election of new members in accordance with this Schedule.(2)The term of office of an alternate member elected to the Board of Trustees expires when the term of office of the member whom he or she replaced, would have expired.(3)A retiring member, if otherwise eligible, is eligible for re-election.(4)Every member elected in accordance with this Schedule must comply with the qualification criteria as contemplated in section 47(1)(c), (d) and (e) of the Constitution: Provided that any member of the Board of Trustees who becomes disqualified as contemplated in section 47(1)(c), (d) and (e) of the Constitution, loses his or her membership with immediate effect.(5)The term of office of a member of the Board of Trustees is terminated if he or she-(a)ceases to be a-(i)Councillor in the case of a municipal representative; or(ii)member of the Fund in the case of a member representative;(b)absents him or herself from two consecutive meetings of the Board of Trustees without the written consent of the Board of Trustees;(e)commits an act of misconduct as contemplated in sub-item (6).(6)A member of the Board of Trustees is deemed to have committed an act of misconduct if he or she-(a)breached any term of the Code of Conduct for members of the Board of Trustees, or of any annexure thereto;(b)breached any regulation; or(c)failed to comply with any guideline, directive, circular or policy statement issued from time to time by the Registrar in accordance with the Pension Funds Act.(7)(a)The Principal Officer must, in the event that-(i)he or she becomes aware of any alleged misconduct by a member of the Board of Trustees as contemplated in sub-item (6); or(ii)any allegation or statement alleging misconduct is made in writing to him or her,investigate, and prepare a report on the facts and circumstances of such alleged contravention.(b)The member of the Board of Trustees allegedly committing such misconduct must be given the opportunity to provide written comments on the report contemplated in paragraph (a) within a period not exceeding 15 days after the receipt of the report.(c)In the event that the Principal Officer, after considering the report and written comments, is of the opinion that there has been an alleged act of misconduct as contemplated in sub-item (6), he or she must submit the report and written comments to the Board of Trustees at its next meeting: Provided that if the member concerned does not furnish the Principal Officer with his or her written comments as contemplated in paragraph (b), the Principal Officer must submit his or her report to the Board of Trustees without such comments.(d)The Board of Trustees must, immediately upon receipt of the report contemplated in paragraph (a) with the supporting documentation, including the written comments, if any, take such action as it considers appropriate, including-(i)terminating the term of office of such member; or(ii)suspending such member from the Board of Trustees for such period and in respect of such function as the Board of Trustees in its sole discretion may decide, subject to any terms and conditions as may be imposed by the Board of Trustees.(e)Notwithstanding anything to the contrary contained in these Regulations, in the event that the member of the Board of Trustees declines to vacate his or her office as required by the Board of Trustees in accordance with paragraph (d), the Board of Trustees must apply for the removal of such member by either-(i)referring the matter to the Financial Sector Conduct Authority; or(ii)lodging an application to any competent court with jurisdiction.9. Code of Conduct
(1)(a)The Board of Trustees must-(i)prepare or cause to be prepared by the Principal Officer; anda Code of Conduct for members of the Board of Trustees.(b)The Code of Conduct contemplated in paragraph (a) must include, but is not limited to, the following as annexures:(i)a declaration of acceptance of fiduciary responsibilities to be signed by each member of the Board of Trustees;(ii)a declaration of interests to be completed and signed by each member of the Board of Trustees; and(iii)a policy on gifts to individual members of the Board of Trustees by third parties.(c)The Code of Conduct and annexures contemplated in this item must incorporate-(i)any statutory and common law rights and responsibilities of members of the Board of Trustees;(ii)the relevant provisions of the Pension Funds Act and any relevant rules issued thereunder relating to the rights and obligations of the members of the Board of Trustees; and(iii)any guidelines, principles, policy directives and circulars which may, from time to time, be issued by the Registrar for the assistance and guidance in the administration of Pension Funds:Provided that, for the purposes of this sub-item, any references to “members of the Board of Trustees” and “Board of Trustees” have the corresponding meaning in the Code of Conduct to “Board of Trustees”.(2)(a)The Principal Officer must provide every elected member of the Board of Trustees, immediately following such member’s election, with a copy of the Code of Conduct and annexures.(b)Every member contemplated in paragraph (a) must-(i)complete and sign the Code of Conduct with annexures; and(ii)return the completed and signed Code of Conduct and annexures to the Principal Officer prior to the commencement of the second meeting of the Board of Trustees following such member’s election: Provided that such member’s failure to comply with this sub-paragraph, constitutes misconduct to which the provisions of items 8(5), (6) and (7) apply.(c)The provisions of this sub-item apply to all members of the Board of Trustees, including any alternates elected or appointed.10. Attendance and travelling allowance
(1)The Fund must pay an attendance and travelling allowance in accordance with the tariff as determined from time to time by the Board of Trustees in its Subsistence and Travel Policy, to all the-(a)members of the Board of Trustees; andwhen involved in matters directly related to the Fund.(2)In the event that a pensioner representative or alternate is not permanently resident in KwaZulu- Natal, the travel allowance must be limited to the-(a)cost of a return economy air ticket to Durban; and(b)travelling allowance contemplated in sub-item (1) from the representative’s permanent place of residence to the nearest airport and return.11. Chairperson and Vice-Chairperson
(1)The Board of Trustees must annually elect a Chairperson and Vice-Chairperson from amongst its members at the first meeting of the Board of Trustees in each calendar year.(2)In the event that the term of office of the Chairperson or Vice-Chairperson is terminated as contemplated in item 8(5), the Board of Trustees must forthwith elect a successor in accordance with this Schedule.(3)The Chairperson and Vice-Chairperson hold office until the next election of a Chairperson and Vice-Chairperson as provided for in this item.(4)(a)If more than two members of the Board of Trustees are nominated for the offices of either the Chairperson or Vice-Chairperson, separate elections by ballot must take place, with the nominee receiving the lowest number of votes at the end of every ballot being eliminated, until a final ballot between the two remaining nominees for each office is held.(b)The nominee receiving the highest number of votes in the final ballot for the election of the-is the duly elected Chairperson or Vice-Chairperson, as the case may be.(c)In the event of an equality of votes, the Board of Trustees must determine the result by lot in the following manner:(i)the Board of Trustees must forthwith proceed, in an open and transparent manner, to determine by lot, who must be elected as the Chairperson or Vice-Chairperson, as the case may be; and(ii)the Principal Officer must conduct the lot by-(aa)ensuring that the name of each one of the nominations is written on a separate piece of paper of equal size in identical shape and colour;(bb)displaying the pieces of paper contemplated in sub-paragraph (aa) to every member of the Board of Trustees who is present at the place where the lot is being conducted who is desirous of inspecting any such piece of paper;(cc)folding every such piece of paper in such a manner that the name thereon is not visible, and placing all such pieces of paper in an empty container;(dd)appointing an impartial person as the drawer to draw a piece of paper from such container;(ee)shaking the container in such a manner as to thoroughly mix the pieces of paper therein, and holding such container in such a position that the drawer is unable to see the pieces of paper inside, whereafter the drawer must draw a piece of paper from the container and hand it to the Principal Officer without unfolding it; and(ff)unfolding the piece of paper handed to him or her as contemplated in sub-paragraph (ee), reading out the name written thereon and displaying such piece of paper to every member of the Board of Trustees who is present at the place where the lot is being conducted and who is desirous of inspecting the same.(5)(a)The Chairperson and Vice-Chairperson elected in accordance with this item are the Chairperson and Vice-Chairperson of the Board of Trustees and must preside at the Annual Information Meeting of the Fund.(b)The Chairperson, and in his or her absence, the Vice-Chairperson must preside at all meetings of the Board of Trustees, and in the event of an equality of votes at any such meeting has, in addition to his or her deliberative vote, also a casting vote.(6)(a)In the absence of the Chairperson and Vice-Chairperson, the representatives present at an Annual Information Meeting of the Fund or the Board of Trustees, as the case may be, must elect an acting Chairperson for the meeting concerned.(b)The Chairperson elected in accordance with paragraph (a) has, in addition to his or her deliberative vote, also a casting vote.12. Meetings
(1)The Board of Trustees must-(a)meet at least once every two months;(b)supervise the keeping of the accounts and books of the Fund; and(c)exercise the powers, perform the functions and carry out the duties conferred upon it as provided for in regulation 23.(2)The Principal Officer must give at least seven days’ written notice of every meeting of the Board of Trustees to each member of the Board of Trustees: Provided that in the case of a special meeting, the Principal Officer must give at least two days’ written or electronic notice, and telephonic notice of such meeting to each member of the Board of Trustees.(3)Non-receipt by a member of the notice contemplated in sub-item (2) does not invalidate such meeting.(4)(a)The Chairperson must appoint one of the alternates elected in accordance with this Schedule to attend a meeting of the Board of Trustees in the event that a member of the Board of Trustees is unable to attend such meeting for any reason.(b)The alternate contemplated in paragraph (a) is a member of the Board of Trustees for the duration of such meeting.(5)(a)The Board of Trustees may agree that, in the interest of expediency, any meeting of the Board of Trustees may be held in conjunction with any meeting of the Superannuation Fund and the Provident Fund.(b)At the first such combined meeting in any calendar year, the members of the Boards of Trustees of the Fund and the Superannuation Fund and the Provident Fund must elect a Chairperson and Vice-Chairperson, who must act as such at all combined meetings during the relevant financial year.13. Quorum and voting
(1)The quorum for a meeting of the Board of Trustees consists of-(a)50% of all its members, rounded upwards; plusProvided that the attendance by the additional member appointed by the responsible Member of the Executive Council in accordance with item 7 is not taken into account when determining whether a quorum as contemplated in this sub-item exists.(2)(a)One vote is allocated to each-(i)pensioner representative;(ii)member representative; and(iii)municipal representative.(b)The additional member appointed by the responsible Member of the Executive Council in accordance with item 7 has one vote.(3)The quorum necessary for a decision is five members eligible to vote.(4)All the members of the Board of Trustees attending a meeting as contemplated in sub-item (1)-(a)must participate in the business of the Board of Trustees at the meeting;(b)must, without derogating from the generality hereof, participate in, and contribute to, the discussion and debate relating to every matter before the meeting; and(c)are collectively responsible for the decisions taken on any matter, as if every member voted in favour of the decision concerned.14. Appointment and membership of sub-committee
(1)The Board of Trustees may appoint any sub-committee with such delegated authority as it may deem necessary: Provided that a sub-committee may-(a)make recommendations to the Board of Trustees; and(b)not make decisions on any matters.(2)A sub-committee contemplated in sub-item (1) must consist of-(a)an equal number of members appointed by the-(i)municipal representatives on the Board; and(ii)member representatives on the Board; and(b)one pensioner appointed by the pensioner representatives on the Board.15. Liability
(1)Notwithstanding-(a)anything to the contrary contained in these Regulations; and(b)the provisions of item 13 relating to the right of a member of the Board of Trustees to vote on a specific matter,all the members of the Board of Trustees are collectively and individually liable for any breach of the governance of the Fund.(2)For purposes of sub-item (1), breach of governance includes, but is not limited to, and without detracting from the generality hereof, any-(e)breach of fiduciary responsibilities; or(f)breach of the Code of Conduct contemplated in item 9,which results in any loss to the Fund, its members or its beneficiaries.Part 3 – Administrative matters
16. Appointment and determination of duties and services of Principal Officer and other officials
The Board of Trustees-(a)must-(i)appoint-(aa)a Principal Officer; and(bb)any other officials required for the proper transaction of the business of the Fund;(ii)employ any professional or other assistants which may from time to time be deemed expedient;(iii)decide on the remuneration of such persons or assistants as contemplated in sub-paragraphs (i) and (ii); and(iv)determine the duties and services required of the persons or assistants as contemplated in sub-paragraphs (i) and (ii); and(b)may appoint a person as the Deputy Principal Officer to act during the absence of the Principal Officer or other officials irrespective of the reason for their absence.17. Powers, functions and duties of Principal Officer
(1)The Principal Officer must execute all the powers, perform all the functions and carry out all the duties as determined in-(a)the Pension Funds Act; and(2)The Principal Officer must keep separate accounts for the Fund in compliance with the accounting standards as determined by the Registrar from time to time, indicating-(a)all-(i)sums of money received or due and disbursed or payable in respect of members; and(ii)particulars of the matters for which the sums of money contemplated in sub-paragraph (i) have been received or disbursed;(b)the-(i)time of commencement of membership;(iii)dates of payment of all contributions; and(iv)chronological and other particulars necessary to enable the-(aa)keeping of proper accounts; and(bb)performing of an actuarial valuation at any time;(c)all amounts due to or by municipalities; and(d)all other matters of account provided for, or contemplated in, these Regulations or in the scheme prepared in accordance with regulation 8.(3)The Principal Officer must-(a)cause the books and accounts of the Fund to be balanced up to 31 March of every year; and(b)prepare financial statements in respect of the Fund, made up at the date contemplated in paragraph (a).(4)All financial statements must-(a)comply with-(i)the provisions of the Pension Funds Act and any rules issued thereunder; and(ii)any guidelines, principles, directives, circulars and policy statements which may, from time to time, be issued by the Registrar in accordance with the Pension Funds Act;(b)first be signed by the Principal Officer; and(c)thereafter be countersigned by the Auditor.(5)The Principal Officer must prepare on 31 March of every year, in the format which may, from time to time, be prescribed by the Financial Sector Conduct Authority, a statement showing the number of-(c)members who have-during the year,together with such further particulars as the Board of Trustees may from time to time direct.(6)The Principal Officer must furnish the Board of Trustees with such further statements as it may from time to time require.18. Termination of employment contract, suspension and dismissal of Principal Officer and other officials
(1)The Board of Trustees may at any time terminate the employment contract of the Principal Officer or any other officer upon written notice of not less than one month, unless otherwise stipulated in the employment contract of the officer concerned.(2)The Board of Trustees, in accordance with the Basic Conditions of Employment Act, 1997 (Act No. 75 of 1997) and the Labour Relations Act, 1995 (Act No. 66 of 1995), may-(a)suspend the Principal Officer or any other official with or without salary or emoluments in the event of alleged-(i)medical or other incapacity; or(b)dismiss the Principal Officer or any other official.19. Financial matters and power to write off debts
(1)All moneys received on account of the Fund must be paid into a bank account.(2)All cheques drawn against the Fund must be-(a)signed by an officer, other than the Principal Officer, authorised in writing by the Board of Trustees; and(b)countersigned by-(i)the Principal Officer; or(ii)such other person nominated by the Board of Trustees to act on behalf of the Principal Officer in the absence of the Principal Officer, irrespective of the reason of his or her absence:Provided that the Chairperson may sign any cheque instead of either of the two signatories contemplated in paragraphs (a) and (b).(3)The Board of Trustees has the power by resolution to write off any debts due or other claims which are payable to the Fund, which, in the opinion of the Board of Trustees, are desirable to write off as-(a)being irrecoverable; or(b)the recovery of which would-(i)be too difficult or costly; or(ii)not be reasonably practicable.20. Availability of books, accounts and all other records and documents for inspection
The Principal Officer must ensure that all books, accounts and other records and documents of the Fund are open and available for inspection at all times by any-(a)member of the Board of Trustees; and(b)Auditor appointed in accordance with regulation 12 or 13(2)(b), as the case may be.21. Power of Board of Trustees and Principal Officer to recover costs and expenses
The-(a)members of the Board of Trustees; andmay recover from the Fund any costs and expenses incurred by them, him or her, as the case may be, as a result of any claim for expenses incurred in connection with the Fund: Provided that such claim does not arise from any negligence, fraud or other wilful misconduct on the part of the person concerned.Schedule 2 (Regulation 32)
Framework for arrangements relating to membership, contributions and evidence
All structures established as contemplated in these Regulations, government institutions, organs of state, public entities and the employees of the aforementioned who are involved in the subject matter concerned, in the Province, must comply with the provisions of this Schedule.1. Pensionable emoluments
(1)Subject to the provisions of these Regulations, including the provisions of sub-item (4) relating to the limitation of the increase of pensionable emoluments, pensionable emoluments include-(b)cost of living allowance, long service allowance and any other allowance approved by the Board of Trustees for inclusion in the members’ pensionable emoluments; and(c)(i)any allowance granted in lieu of the provision of free quarters; or(ii)one-sixth of the amounts referred to in paragraphs (a) and (b) whenever occupation of quarters, as a portion of the member's emoluments, whether belonging to the municipality or not, is allowed rent free.(2)Subject to the provisions of these Regulations, pensionable emoluments exclude any-(a)special remuneration which may be received for performing special duties or while acting in an office, whether permanently or temporarily vacant;(b)travel or subsistence allowance;(c)fees, honoraria or bonuses of any kind;(e)other allowance not herein specified.(3)In the event that a member-(a)dies in service or retires from the service of the municipality; and(b)has a period of employment in a part-time capacity included in his or her continuous service,then, in calculating his or her final average emoluments, his or her pensionable emoluments during such period of part-time service is increased by 50%.(4)In the event that the pensionable emoluments of a member, including a section 57 contract employee, at any time increase in excess of that assumed by the Actuary from time to time for valuation purposes in accordance with regulation 15, then the Board of Trustees, on the advice of the Actuary, may direct that the municipality that-(a)employed such member; or(b)continues to employ such member,pay a lump sum adjusted contribution in accordance with item 4 to the Fund.2. Contributions by members
(1)Subject to Schedule 5 item 5, Schedule 6 item 2 and sub-item (4) below, every member, including an employee appointed in accordance with the provisions of section 57 of the Local Government: Municipal Systems Act, whether on a fixed term contract or not, must contribute to the Fund the amount of 7% of his or her pensionable emoluments.(2)The contributions to be paid by a member in accordance with sub-item (1) are a first charge upon the salary or wage payable to such member, and are deducted monthly or at shorter intervals by the associated municipality concerned and paid into the bank account of the Fund as provided in these Regulations.(3)The associated municipality must-(a)within seven days after the expiration of the period in respect of which the members’ contributions is being paid, certify in writing to the Principal Officer the amount of the contributions and late payment interest paid by the members to the Fund in the preceding calendar month; and(b)supply the Principal Officer with such further information as he or she may require for the purpose of these Regulations.(4)(a)Any person who has-(i)been accepted as a member on or after the commencement of these Regulations; and(ii)had a prior period of service with a municipality, whether associated or not, immediately preceding his or her becoming a member,has the right, subject to the approval of the Board of Trustees, to date his or her membership back to the date of commencement of such service or to a later date as may be determined by the Board of Trustees.(b)Any person who exercises the right contemplated in paragraph (a) must -(i)exercise such right within one month after the date on which the first contribution is paid; and(ii)pay contributions for such prior period together with interest at the rate as recommended by the Actuary from time to time.(c)A person contemplated in paragraph (b) must pay all arrear contributions, with interest thereon, within two years or within such further period as may, upon application by such person, be approved in writing by the Board of Trustees.(5)In the event that payment of arrear contributions is made by means of instalments as contemplated in sub-item (4)(c) and the member dies or ceases to contribute to the Fund before he or she has completed such arrear payments, the provisions of regulation 30(3)(c) apply.(6)A member, who remains in the service of a municipality after he or she has attained the pension age, is not allowed to continue to contribute to the Fund after the last day of the month in which he or she attains the pension age.3. Payment to secure additional continuous service
A person who becomes a member of the Fund may be permitted to purchase from the Fund additional continuous service on such terms and conditions as the Board of Trustees, after consultation with the Actuary, may decide: Provided that-(a)in respect of additional continuous service purchased-(i)the member must produce, at his or her own expense, evidence of sound health acceptable to the Board of Trustees at the time of making application to purchase additional continuous service;(ii)after 1 April 1984, the additional continuous service so purchased does not count towards any qualifying period as determined in these Regulations; and(iii)the additional service so purchased may not be included for the purpose of determining the period of bonus service contemplated in item 9 of Schedule 3; and(b)if the Board of Trustees makes a finding that such member is not in a sound state of health, it must notify him or her in writing that his or her additional continuous service is subject to the restriction that if, within five years from the date of purchase of the additional continuous service, he or she-(i)is retired on account of ill-health or dies in the service of a municipality from an illness which, in the opinion of the Board of Trustees is, or is the result of, the illness or condition identified in the finding of the Board of Trustees-(aa)no pension or lump sum is payable in accordance with these Regulations in respect of the additional continuous service purchased; and(bb)a lump sum equal to the amount which he or she paid for additional continuous service plus 4% compound interest from the date of payment for such additional continuous service to the date of retirement from the service of the municipality or death is payable; or(ii)leaves the service of the associated municipality concerned for whatever reason other than retirement on account of ill-health or death -(aa)his or her pension rights in respect of the additional continuous service may not be transferred to any other fund, except with the consent of that other fund; and(bb)if no transfer takes place as contemplated in this item, his or her benefit is calculated excluding the additional continuous service purchased and a benefit equal to the amount which he or she paid for additional continuous service plus 4% compound interest from the date of payment of such additional continuous service to the date of his or her leaving the service of the associated municipality concerned is payable in respect of such service.4. Contributions by municipalities
(1)An associated municipality must pay into the bank account of the Fund within seven days after the expiration of the period in respect of which the contribution is being paid-(a)the contributions and late payment interest paid by the members in the preceding calendar month in accordance with the provisions of item 2(1) by the members in its service;(b)the contribution contemplated in sub-item (3)(a);(c)an amount equal to the amount contemplated in sub-item (3)(b) and interest paid in accordance with items 2(4) and 2(5);(d)such surcharge on its contributions in accordance with paragraphs (b) and (c) as may be agreed to by the Board of Trustees on the advice of the Actuary and as contemplated in item 14(7) of Schedule 3, in order to provide the whole or part of bonus additions made in accordance with items 14(1) and (2) of Schedule 3;(e)in respect of members whose employment commenced prior to 1 July 2002, an additional surcharge as set out in the scheme contemplated in regulation 15(2)(a)-(i)prepared by the Actuary; and(ii)submitted to, and approved by, the-(aa)Board of Trustees; and(f)any adjusted contribution payable in a lump sum in accordance with item 1:Provided that if the member is paying by instalments, the Fund may direct that the municipality make a lump sum payment to the Fund in lieu of its instalments and interest.(2)Whenever a municipality fails to make payment in accordance with the provisions of sub-item (1), it must pay to the Fund interest on the amount payable at the interest rate prescribed by the Minister of Finance in accordance with section 13A(7) of the Pension Funds Act from time to time.(3)In order to give effect to the provisions of sub-item (1), every associated municipality must pay to the Fund-(a)as its basic contribution, the amount of 18,37% of pensionable salaries: Provided that this percentage may be amended from time to time by the Board of Trustees on the advice of the Actuary;(b)an additional surcharge as contemplated in the scheme provided for in regulation 15(2)(a)-(i)prepared and approved by the Actuary; and(ii)submitted to the-(aa)Board of Trustees; and(c)subject to paragraph (a), any other amounts as provided for in sub-items (1) and (2).5. Contributions by members whilst on leave
(1)When a member is on leave with full pay or with pay less than full pay, he or she must continue to contribute to the Fund on the basis of his or her full pensionable emoluments.(2)(a)When a member is on unpaid leave, he or she may, on application to the Board of Trustees, be permitted to contribute to the Fund on the basis of his or her full pensionable emoluments for the calendar month immediately preceding the commencement of his or her unpaid leave.(b)Such application must be made, and the amount due in respect thereof must be paid, by the member within one month of his or her return to duty.(c)The Board of Trustees may allow such member to pay the amount contemplated in this sub-item in six or less monthly instalments which may be deducted from the emoluments payable to him or her.(d)Absenteeism is not regarded as unpaid leave.(e)Except as provided for in this item, no contributions may be collected or are payable in respect of any period of unpaid leave.6. Reduction in pensionable emoluments or hours of service
(1)Subject to the provisions of sub-item (2), in the event that the pensionable emoluments of a member are reduced for any reason other than misconduct, he or she may elect in writing to continue to contribute to the Fund as if no reduction has taken place, in which event his or her pensionable emoluments are, for purposes of these Regulations, deemed not to have been reduced.(2)In the event that a member leaves the employ of an associated municipality, and enters the employ of another associated municipality, and his or her pensionable emoluments in the latter municipality are lower than his or her pensionable emoluments in the former municipality, the provisions of sub-item (1) apply, with the necessary changes: Provided that-(a)he or she did not leave the service of the former municipality on account of misconduct;(b)he or she entered the service of the latter municipality within a period of 12 months after leaving the service of the former municipality; and(c)the consent of the latter municipality is first obtained.(3)When the ordinary salary or wages or working hours of a specific member or group of members have been reduced as a measure of economy, each such member may elect in writing to contribute on the basis of the pensionable emoluments on which he or she was contributing immediately before the reduction.7. Evidence to be produced
(1)Subject to the provisions of this item, any documentary or other evidence directly related to the current or prospective membership of a member or prospective member that may be required in writing by the Board of Trustees, must be submitted by the member or prospective member, as the case may be, within the period stipulated in the written request.(2)The Board of Trustees has the power to require evidence relating to age, current and former marital or civil union status, date of birth of dependants and any other matter which, in the view of the Board of Trustees, is directly relevant for purposes of the current or prospective membership of the member or the prospective member, as the case may be.(3)Documentary evidence of age satisfactory to the Board of Trustees must be produced by each member at the date of commencement of his or her contributions to the Fund and, failing such production, the deemed age of such member for purposes of these Regulations must be determined by the Board of Trustees.8. Benefit claim procedure
(1)A claimant must-(a)notify the Fund in writing of the occurrence of an event giving rise to a claim for a benefit contemplated in terms of these Regulations, within a period not exceeding 90 days after such event; and(b)at a written request by the Fund, provide all documentation, completed forms and written information and other evidence which, in the opinion of the Board of Trustees, is considered necessary to determine the admissibility and amount of any claim.(2)The Fund is not liable for any costs involved in obtaining any information or evidence required from any person for the admission of a claim, unless such evidence is specifically requested in writing by the Board of Trustees.(3)The Board of Trustees may in writing-(a)request additional evidence;(b)specify requirements in order to assess a claim; and(c)in the event that the claimant is a pensioner, request proof of the existence of such pensioner on an annual basis.(4)The claimant must provide all documentation, information and evidence as required from time to time in writing as provided for in this item before a claim for the payment of a benefit or the continued annual payment of a benefit may be admitted or made, as the case may be, by the Fund.(5)Notwithstanding the provisions of this item, the Board of Trustees may, at its sole discretion, waive compliance by a claimant with any or all of the requirements of this item in order for a benefit or claim to be admitted or a benefit paid.Schedule 3 (Regulation 34)
Framework for arrangement of benefits, pensions and lump sums and related matters
All structures established as contemplated in these Regulations, government institutions, organs of state, public entities and the employees of the aforementioned who are involved in the subject matter concerned, in the Province, must comply with the provisions of this Schedule.1. Termination of service on account of retirement at pension age or earlier
(1)A member must be deemed to have retired from the service of a municipality on the last day of the month in which he or she attains the pension age, in which event, unless he or she elects to become a deferred retiree, he or she must be granted a retirement benefit determined in accordance with item 7 in respect of membership of the Fund.(2)A member who has attained an age seven years earlier than the pension age, and who has had at least 10 years' continuous service, may be required by the associated municipality to retire, in which event he or she must be granted a retirement benefit determined in accordance with item 7: Provided that-(a)the rates are those which apply at his or her pension age; and(b)(i)all payments of pension in accordance with items 7 and 10 made before the member has reached his or her pension age must be paid by such municipality out of its own revenue; and(ii)the lump sum must be paid partly out of the Fund and partly out of the revenue of such municipality in accordance with the tables approved by the Board of Trustees on the recommendation of the Actuary.(3)(a)Notwithstanding the provisions of sub-items (1) and (2), a member who-(i)had at least 10 years’ continuous service; and(ii)has attained an age of 10 years or less younger than the pension agehas the right to elect to retire from the service of the municipality.(b)a member who elects to retire from the service of the municipality in accordance with paragraph (a) must-(i)give three months written notice of his or her intention to the municipality concerned; and(ii)unless he or she elects to become a deferred retiree, be granted a retirement benefit determined in accordance with item 7.(4)(a)Notwithstanding the provisions of sub-items (1) to (3), a member who-(i)had at least 10 years’ continuous service; and(ii)has not attained an age of 10 years younger than the pension age,may apply to the municipality to retire from the service of the municipality.(b)A member who receives permission to retire from the service of the municipality in accordance with paragraph (a) must be granted a retirement benefit calculated in accordance with item 7, unless he or she elects to become a deferred retiree: Provided that-(i)the rates must be those which apply at the age 10 years less than the pension age;(ii)all payments of pension in accordance with items 7 and 10 made before the date on which the member attains the age of 10 years less than the pension age must be paid by such municipality out of its own revenue; and(iii)the lump sum must be paid partly out of the Fund and partly out of the revenue of such municipality in accordance with the tables approved by the Board of Trustees on the recommendation of the Actuary.2. Termination of service on account of retirement owing to ill-health
(1)If a member who has had at least 10 years’ continuous service or the associated municipality in whose service such member is, is of the opinion that such member is permanently incapable of efficiently discharging his or her duties by reason of any bodily or mental infirmity, the following documents must be submitted by the municipality to the Board of Trustees-(a)an affidavit in a form approved by the Board of Trustees setting out the state of health of the member and sworn to by the member;(b)a report by the municipality in a form approved by the Board of Trustees, setting out-(i)the member's state of health;(ii)the manner in which his or her work is performed;(iii)the amount of sick leave granted to the member during the immediately preceding two years; and(iv)any other information as the Board of Trustees may require; and(c)reports concerning the member's state of health completed independently by two medical practitioners, one selected by the-(i)associated municipality; and(2)Upon receipt of the documents contemplated in sub-item (1), the Board of Trustees may, in its discretion, require the member to be further examined by a medical practitioner or medical practitioners appointed by the Board of Trustees.(3)(a)If the Board of Trustees, after consideration of all the information at its disposal, is of the opinion that-(i)the member is permanently incapable of discharging his or her duties; and(ii)his or her state of health was not occasioned by his or her own wilfulness or negligence,the member concerned is, on the termination of his or her service with the associated municipality, entitled to receive a benefit based on his or her final average emoluments consisting of a pension and a lump sum at the following rates, where x is the member’s continuous service in the Fund on termination in accordance with this item:| Pension per cent | Lump sum per cent |
|---|
| 5.25*max{x,(x + 65 - 65)/2}/250 | 13.75*max{x,(x + 65 - 65)/2}/250 |
3. Termination of service on account of retirement owing to reorganisation
(1)A member with at least 10 years’ continuous service is entitled to receive a retirement benefit calculated in accordance with item 7(2), subject to the rates being those that apply at his or her pension age, if his or her employment is discontinued by an associated municipality-(a)on account of-(i)the abolition of his or her office or post;(ii)a reduction in, or re-organisation of, staff; or(iii)retrenchment generally; or(b)in order to facilitate improvements in efficiency or organisation:Provided that no benefit is payable in the event that a commensurate office or post has been offered to him or her by the associated municipality concerned.(2)The municipality must, in respect of the benefit payable in accordance with this item, out of its own revenue pay-(a)the amount of the pension calculated in accordance with item 7(2) and payable from the date of termination as contemplated in this item, until the date on which the member attains his pension age; and(b)a proportion of the lump sum calculated in accordance with tables approved by the Board of Trustees on the recommendation of the Actuary.(3)(a)Notwithstanding the provisions of sub-item (1), if the position of a member becomes redundant on account of any alteration in the continued existence of any associated municipality as a result of the provisions of the Local Government: Municipal Structures Act, the provisions of sub-items (1) and (2) apply to a member-(i)who has completed five years’ continuous service; and(ii)whose position becomes redundant as a result of the said alteration:Provided that if the alteration results in the division of an associated municipality into two or more municipalities, the payments in accordance with this item is divided between the new municipalities in proportion to their total assessment rate income on the day following the division.(b)In the event that a member who has had less than-(i)10 years’ continuous service is retired from the service of the municipality in accordance with sub-item (1); or(ii)five years’ continuous service is retired from the service of the municipality in accordance with paragraph (a),he or she is entitled to receive, as a lump sum, an amount equal to twice his or her contributions increased by 3% for each complete year of his or her continuous service, or, if it is greater, an amount calculated in accordance with item 4(1).4. Termination of service on account of voluntary retirement or voluntary leaving of service of municipality in circumstances not elsewhere provided for
(1)If a member voluntarily leaves the service of an associated municipality on account of voluntary retirement or for any other reason not elsewhere provided for in these Regulations, he or she is entitled to receive a lump sum equal to the sum of-(a)the amount of his or her contributions;(b)five-twelfths of 1% of the amount in paragraph (a) for each month of his or her continuous service; and(c)5% of the amounts in paragraphs (a) and (b) for each complete year of his or her continuous service, not exceeding a maximum of 100% of his or her contributions,calculated at the date of termination of service.(2)Unless the member becomes a preserved member in terms of item 1 of Schedule 6, the lump sum as contemplated in sub-item (1) must be paid as soon as administratively possible, which may not exceed a period of three calendar months after the end of the month in which the member leaves the service of the associated municipality concerned.(3)Notwithstanding the provisions of sub-item (1), if a member retires voluntarily from or leaves the services of an associated municipality in order to enter the service of another associated municipality, in such circumstances that the relevant provisions of item 12 apply to him or her, he or she is not entitled to a lump sum as contemplated in sub-item (1).(4)(a)A member who qualifies in accordance with sub-item (1) for a lump sum, may, if he or she has had at least 10 years’ continuous service, elect to receive, subject to paragraph (b), either a-(i)lump sum calculated in accordance with sub-item (1); or(ii)retirement benefit, which becomes payable at his or her pension age, calculated-(aa)in accordance with item 7(3) based on the rates that apply at his or her pension age; and(bb)on the basis of final average emoluments and continuous service at the date of leaving service:Provided that the member may elect to draw the benefit contemplated in sub-paragraph (ii) prior to attaining his or her pension age, but not before the age of 55, in which event the benefit must be recalculated in accordance with item 7(3) based on the rates that apply at the age at which the benefit is drawn.(b)For purposes of paragraph (a), the amount concerned is calculated as follows:(i)the pension and lump sum is increased in accordance with items 14(1) and (2);(ii)the provisions of items 10 and 11 apply when the retirement benefit becomes payable; and(iii)in the event that the member concerned dies before payment of the retirement benefit, the benefit payable by the Fund is determined by the Board of Trustees acting upon the advice of the Actuary.5. Termination of service on account of dismissal
(1)If a member is-(a)dismissed from the service of an associated municipality on account of-(iv)dereliction of duty; or(v)any other act prejudicial to the effective operation of the municipality’s service; or(b)allowed to retire from the service of the municipality or to resign in order to avoid dismissal as contemplated in paragraph (a);the provisions of Schedule 5 or Schedule 6, as applicable, must apply to payment of his or her benefit.(2)A member whose service with the municipality has ceased as contemplated in sub-item (1), is entitled to receive a lump sum equal to the sum of-(a)the amount of his or her contributions;(b)five-twelfths of 1% of the amount in paragraph (a) for each month of his or her continuous service; and(c)5% of the amounts in paragraphs (a) and (b) for each complete year of his or her continuous service, not exceeding a maximum of 100% of his or her contributions,calculated at the date of termination of service.(3)A member contemplated in sub-item (1) is entitled to elect, instead of the benefit contemplated in sub-item (2), a retirement benefit calculated in accordance with item 7 if he or she has-(a)had at least 10 years’ continuous service; and(b)has attained an age of-(i)seven years or less younger than the pension age; or(ii)10 years or less younger than the pension age in the event that the member was a member of the Fund on 30 June 1987.(4)In the event that the conduct of a member contemplated in sub-item (1) resulted in financial loss to the associated municipality concerned, the amount of such loss, as certified by the municipal manager or chief executive officer, is-(a)deducted, subject to the provisions of section 37D of the Pension Funds Act, from such benefit; and(b)paid over to the municipality concerned as a preferential charge.(5)Any resignation tendered during an enquiry into the conduct of a member before the result of such enquiry is announced, is deemed to be a resignation in order to avoid dismissal.(6)In the event that the services of a member are terminated or dispensed with for reasons not solely within his or her control, other than those specified in sub-item (1) or elsewhere in these Regulations, he or she-(a)is entitled to receive a lump sum equal to twice the amount of his or her contributions increased by 3% for each complete year of his or her continuous service at the date of termination of service; and(b)the provisions of Schedule 5 or, as Schedule 6 applicable, must apply to payment of his or her benefit:Provided that the final decision as to whether or not this item applies vests in the Board of Trustees.(7)Unless the member becomes a preserved member in terms of item 1 of Schedule 6 or a deferred retiree in terms of item 2 of Schedule 5, the lump sum as contemplated in sub-item (1) must be paid as soon as administratively possible, which may not exceed a period of three calendar months after the end of the month in which the member leaves the service of the associated municipality concerned6. Termination of service on account of death
(1)(a)The provisions of section 37C of the Pension Funds Act apply to this item, and in the event of an irreconcilable conflict between the application of section 37C of that Act and the provisions of this item, section 37C prevails.(b)The provisions of this item only apply to a member’s pension if he or she dies on or after the promulgation and commencement date of these Regulations: Provided that in the event that a member died before the promulgation and commencement date of these Regulations, the provisions of the Regulations repealed in accordance with regulation 56 apply.(2)Subject to the provisions of sub-item (4), if a member dies while in the service of an associated municipality and leaves an eligible spouse-(a)such spouse is granted a pension equal to the percentage set out in the table of the final average emoluments of such member, where-(i)x is the member’s continuous service in the Fund on termination in accordance with this item; and(ii)y is the age of the member on termination in accordance with this item:| Pension per cent |
|---|
| 2.625 * { x + 0.75 * (65 - y ) } / 250 |
| Pension per cent |
|---|
| 2.625 * { x + 0.75 * (65 - y ) } / 250 |
7. Retirement benefit
(1)(a)For purposes of this item, “optional retiring date” means the date on which a member attains the age of 60 years.(2)The retirement benefit payable to a member who retires from the service of the municipality on or after his or her optional retiring date is based on his or her final average emoluments and consists of a-at the rates in the following table for each year of continuous service:| Age | Pension per cent | Lump sum per cent |
|---|
| 60 | 1,68 | 4,75 |
| 61 | 1,75 | 4,90 |
| 62 | 1,83 | 5,05 |
| 63 | 1,91 | 5,20 |
| 64 | 2,0 | 5,35 |
| 65 | 2,1 | 5,50 |
| Age | Pension per cent | Lump sum per cent |
|---|
| 55 | 1,40 | 4,00 |
| 56 | 1,45 | 4,15 |
| 57 | 1,50 | 4,30 |
| 58 | 1,56 | 4,45 |
| 59 | 1,62 | 4,60 |
8. Minimum benefit
(1)The provisions of section 14A of the Pension Funds Act apply to this item, and in the event of an irreconcilable conflict between the application of section 14A and the provisions of this item, section 14A prevails.(2)If a person ceases to be a member of the Fund prior to retirement from the service of the municipality in circumstances other than the liquidation of the Fund, the benefit payable to, or in respect of him or her must be at least equal to his or her minimum individual reserve.9. Bonus service
(1)Subject to the provisions of sub-item (3), a member who has at least 20 years' continuous service and-(a)who retires from the service of the municipality;(c)whose services are terminated in accordance with item 2 or 3,is granted additional continuous service in accordance with sub-item (2).(2)For purposes of this item, additional continuous service of-(b)one year for every completed five years of continuous service in excess of 20 years,is granted to a member contemplated in sub-item (1), subject to a maximum period of continuous service, including the additional service, of 50 years.(3)(a)Any additional service purchased by a member may not be included for the purpose of bonus service.(b)A member is only eligible for bonus service for the period of actual service after-(i)becoming a member of the Fund; and(ii)the date of commencement of these Regulations.10. Conversion of lump sum into pension
(1)A member who becomes entitled to a pension and lump sum on the election date has the right to elect that the whole or part of the lump sum be converted into a-(a)pension equal to 20% of the pension to which he or she was entitled on the election date in the event that the whole amount of the lump sum is so converted; or(b)proportionately smaller pension in the event that less than the whole amount of the lump sum is so converted.(2)In the event that the lump sum is payable partly by the-(b)associated municipality out of its own revenue,and less than the whole amount of the lump sum is converted as contemplated in sub-item (1)(b), the amount so converted must be divided between the Fund and the associated municipality concerned in the same proportions as the total lump sum before conversion.11. Commutation of certain pensions
(1)The Board of Trustees-(a)may, in its sole discretion, commute a pension of an amount equal to or less than the annual amount as determined by the South African Revenue Service from time to time into a lump sum; or(b)must, if on the election date, a retiring member, whose pension exceeds the amount contemplated in paragraph (a) per year, so requests, commute not more than one-third of his or her pension for a lump sum.(2)In the event that any amount has been transferred to the Fund after 12 March 1997 in respect of a member from a fund approved by the South African Revenue Service as a pension fund, not more than one-seventh of his or her pension may be commuted into a lump sum.(3)The amount of the lump sum must be determined by the Board of Trustees acting on the advice of the Actuary and is equivalent in value to the pension so commuted.(4)In the event that the whole of a pension is commuted in accordance with sub-items (1) and (2), no benefit is payable to the dependants of the member concerned.(5)In the event that part of a pension is commuted in accordance with sub-items (1) and (2), the granting of a pension, as contemplated in this Schedule, to the dependants of the member concerned remains unaffected.(6)In the event that the whole or part of a pension payable in accordance with item 1(2), 1(4) or 3(1) or regulation 40(d) is commuted, the associated municipality employing the member concerned, must pay to the Fund an amount determined by the Board of Trustees acting on the advice of the Actuary.12. Member re-joining service of same or another associated municipality
(1)(a)In the event that a member-(i)leaves the service of an associated municipality for any reason other than-(aa)retirement from the service of the municipality as contemplated in item 7; or(bb)dismissal in accordance with item 5(1) to (4) or item 5(5);(ii)receives a benefit in accordance with item 2(3)(b), 3(3)(b), 4 or 5(6); and(iii)is re-employed-(aa)before he or she has attained the pension age, by such municipality or by another associated municipality; and(bb)within 12 months from the date of his or her having left such service,he or she may elect, within a period not exceeding four months after the date on which he or she is so re-employed, to refund any benefit received from the Fund in accordance with paragraph (b).(b)The refund contemplated in paragraph (a) may be paid-(ii)by instalments approved by the Board of Trustees, together with interest at a rate recommended by the Actuary and approved by the Board of Trustees, compounded yearly from the date he or she received such benefit to the date or dates of repayment.(2)In the event that a member has refunded a benefit as contemplated in sub-item (1)-(a)the break in his or her service is condoned; and(b)he or she again contributes to the Fund from the date of his or her re-employment.(3)In the event that the date of re-employment is more than 12 months, but less than 24 months, after the date that the member left such service, he or she may elect in writing-(a)within a period not exceeding four months after the date on which he or she rejoins the service; and(b)with the consent of the Board of Trustees,to refund any benefit received from the Fund and the provisions of this item apply.(4)In the event that a benefit has been paid to a member in accordance with item 5, the Board of Trustees in its sole discretion, may decide that such member is not excluded from the provisions of this item.13. Recalculation of certain pensions
With effect from the date of commencement of these Regulations, every pensioner or dependent of a deceased pensioner of the Fund must, without interruption, receive a pension equal in amount to the pension he or she received from the Fund immediately prior to the date of commencement of these Regulations.14. Bonus addition to pension
(1)The Board of Trustees, in accordance with the provisions of the Pension Funds Act-(a)must review the level of pension being paid by the Fund; and(b)may, acting on the advice of the Actuary and taking into account the increase in the consumer price index in the previous financial year, determine that pensions are increased in addition to the annual increase contemplated in sub-item (5).(2)Any increase in pension, as contemplated in sub-item (1)(b) must be paid in accordance with the pension increase policy adopted by the Board of Trustees, acting on the advice of the Actuary, during the month of July and reviewed on an annual basis, and is-(a)payable from the date as set out in the pension increase policy as amended from time to time; and(b)subject to the minimum pension increase in accordance with the Pension Funds Act.(3)The Board of Trustees may, acting on the advice of the Actuary, annually, in respect of every-(b)eligible surviving spouse, child, mother or father,in receipt of a pension, pay an annual bonus not exceeding one month's pension: Provided that if a pension has become payable during that year, the amount of the annual bonus is reduced pro rata by the period during which the pension was not payable.(4)(a)The Actuary must, taking into account the balance in the pension memorandum account contemplated in regulation 10(2), on an annual basis determine whether there are profits on the share of the Fund which is attributable to the pensions in payment.(b)In the event that there are profits as contemplated in paragraph (a), the Actuary must, subject to the pension increase policy as amended from time to time, determine the percentage extent to which pensions could be augmented from such profits for the whole balance of the estimated period for which such pensions would be payable by the Fund.(5)The pensions payable must, subject to the pension increase policy as amended from time to time, on an annual basis be increased to the extent of the percentage calculated by the Actuary in accordance with sub-item (4): Provided that if-(a)the percentage calculated in accordance with sub-item (4) is-(i)less than three-quarters of the percentage increase in the consumer price index for the 12 months to December of the financial year in respect of which the profits have been determined in accordance with sub-item (4), the pensions must be increased by three-quarters of such percentage increase in the consumer price index; or(ii)greater than three-quarters of the percentage increase in the consumer price index for the 12 months to December of the financial year in respect of which the profits have been determined in accordance with sub-item (4), the pensions must be increased by a percentage which may not exceed the lower of the percentage increase-(aa)in the consumer price index; or(bb)calculated in accordance with sub-item (4) if any surcharge made in accordance with sub-item (7) during the year for which profits are being determined in accordance with sub-item (4) and one-half of any such surcharge during the preceding year were deducted from the profits; and(b)any pension becomes payable for the first time during the year for which profits are determined in accordance with sub-item (4), the percentage increase for such pension must be reduced pro rata to the period during which the pension was not payable: Provided further that such reduction in the percentage increase does not apply in the case of the pension derived from a pensioner of an eligible spouse, eligible child or parent, as the case may be, unless the pensioner from whom such pension was derived was only granted a pension during the year for which profits are determined in accordance with sub-item (4).(6)The capitalised cost of any further increase in pensions in accordance with sub-item (5)(a) must be-(a)calculated by the Actuary; and(b)borne by the associated municipalities.(7)(a)An associated municipality must bear the cost of further increases calculated in accordance with sub-item (6) by means of a percentage surcharge on the contributions payable by the municipality in accordance with item 4(1)(b) of Schedule 2.(b)The Actuary must-(i)estimate the surcharge; and(ii)advise the municipality of the estimated percentage surcharge not later than 31 March in the year in which such further increases are to be granted.(c)The estimated surcharge becomes effective in respect of the contributions payable by the municipality from the first day of July of any such year for the immediately ensuing 12 months.(d)When the Actuary has completed his or her analysis of the operations of the pension memorandum account contemplated in regulation 10(2), he or she must determine the actual percentage surcharge required: Provided that if the-(i)percentage surcharge is greater than the amount previously estimated, the shortfall must be-(aa)accumulated to the first day of July of the following year; and(bb)taken into account by the Actuary in determining any subsequent surcharge that may be required from that date;(ii)actual percentage surcharge required is less than the estimated percentage, the-(aa)municipality must continue to contribute at the estimated rate of surcharge until the 30th day of June of the following year; and(bb)excess surcharge must be accumulated in the pension memorandum account contemplated in regulation 10(2) and taken into account by the Actuary in determining any subsequent surcharge that is required; and(iii)last valuation by the Actuary in accordance with the provisions of regulation 15 discloses that the Fund had a surplus-(aa)a portion of the cost of the further increases up to an amount equal to 1% of the pensionable emoluments of members must be met from the contributions payable in accordance with item 4(1)(b) of Schedule 2; and(bb)only the balance of the cost may be met by a percentage surcharge in accordance with this item.15. Benefits, pensions and lump sums not assignable or executable
(1)The provisions of the Pension Funds Act apply to this item, and in the event of an irreconcilable conflict between the application of the Pension Funds Act and the provisions of this item, the provisions of the Pension Funds Act prevail.(2)A benefit or right to a benefit cannot under any circumstances be-(3)A benefit, right to a benefit or any contributions made by a member or on his or her behalf may not under any circumstances be subjected to-(b)any form of execution in accordance with a judgement or order of any court of law.(4)In the event of a beneficiary attempting to-a benefit or right to a benefit in contravention with the provisions of sub-item (2), payment thereof may be withheld or suspended, if the Board of Trustees so determines: Provided that the Board of Trustees may direct the payment of a benefit or part thereof to any one or more dependants of the beneficiary or to a trust for such dependant or dependants during such period as it may deem fit.16. Effect of insolvency on payment of pension
(1)The provisions of section 37B of the Pension Funds Act apply to this item, and in the event of an irreconcilable conflict between the application of section 37B and the provisions of this item, section 37B prevails.(2)In the event that the estate of any person in receipt of a pension is-for the benefit of his or her creditors, the pension concerned, in accordance with the provisions of section 37B of the Pension Funds Act, does not form part of the insolvent estate of the pensioner concerned.(3)Any payment to the person contemplated in sub-item (2)-(a)is only for his or her own personal use;(b)may, subject to section 16 of the Maintenance Act, 1998 (Act No. 99 of 1998), not in any way be taken, attached, sold or appropriated by-(i)the trustee in insolvency;(iii)his or her creditors; and(c)does not form part of his or her insolvent estate.(4)Whenever a pension has been suspended in accordance with this item, it may, in the discretion of the Board of Trustees, be revived on the-(a)rehabilitation of the person in receipt of the pension;(b)setting aside of the sequestration of his or her estate; or(c)claims of his or her creditors being satisfied,in which event he or she receives a pension at the same rate and under the same conditions as before sequestration, surrender or assignment, as the case may be, together with any arrears that may have accrued.17. Effect of conviction on payment of pension
(1)If a person in receipt of a pension is-(a)convicted by any court of any crime or offence; and(b)sentenced to any term of imprisonment exceeding 12 months without the option of a fine,the pension concerned ceases to be paid to such person and is paid to such person’s eligible dependant or dependants during the period of imprisonment.(2)After the discharge of the person contemplated in this item from prison, payment of the pension to him or her resumes at the same rate and under the same conditions as before his or her imprisonment, together with any arrears that may have accrued.18. Deduction of debt owed and payable to associated municipality from benefit
(1)The provisions of section 37D of the Pension Funds Act apply to this item, and in the event of an irreconcilable conflict between the application of section 37D and the provisions of this item, section 37D prevails.(2)For purposes of this item-(a)“debt” means a money debt owed and payable by a member to the associated municipality in whose employ he or she is; and(b)any such debt is deemed to be so owed and payable, if it is certified as such by the municipal manager or chief executive officer, as the case may be, of the municipality concerned.(3)(a)Notwithstanding anything to the contrary contained in these Regulations or in any other law any debt due by a member to the associated municipality in whose employ he or she is, may, subject to the provisions of section 37D of the Pension Funds Act, be deducted-(i)as a lump sum from the benefit payable to, or in respect of, him or her; or(ii)in the case of a pension payable to such member, in such instalments as the Board of Trustees may decide.(b)The amounts deducted in accordance with this sub-item must be paid by the Fund to the municipality concerned.(4)If the Board of Trustees receives more than one claim for the payment of debts, it must determine the-(a)order of priority of the payment of such claims; or(b)apportionment between such claims of the amount available for payment,in accordance with this item.(5)No claim lies against the Fund in respect of any amount paid to an associated municipality in accordance with this item.19. Unclaimed benefit
(1)Any unclaimed benefit-(a)due to a beneficiary; and(b)that has not been paid by the Fund,must be retained by the Fund pending a claim by such beneficiary or any other person in respect of such beneficiary, subject to item 6(14) and sub-item (3), with the necessary changes.(2)The benefit so retained attracts interest at a rate to be determined by the Board of Trustees from time to time from the date on which such benefit became due and payable until the date of payment.(3)The Fund is entitled to deduct from the unclaimed benefit account any necessary and reasonable costs incurred by it, to include, but not limited to, administration and tracing costs in the determination of beneficiaries.(4)The provisions of this item do not apply to any benefit lawfully withheld by the Fund in accordance with these Regulations or the Pension Funds Act.(5)Notwithstanding the provisions of sub-items (1) to (4), the Board of Trustees may transfer any unclaimed benefits to a registered unclaimed benefit fund, as contemplated in section 37C of the Pension Funds Act.20. Delayed payment of benefits
Interest must be added to a benefit in respect of which payment has not been made to a former member or beneficiary on the date on which payment is due-(a)for the period from the due date of payment to the actual date of payment; and(b)at a rate of interest equal to the Johannesburg Interbank Agreed Rate, as amended from time to time.21. Special grant by associated municipality to member
(1)If, in the case of a member who was in the service of a municipality on the date it became associated with the Fund, the continuous service of such member is calculated without taking into account the whole period of service of such a member with a municipality before it became an associated municipality, or with another unassociated municipality before such date, such associated municipality may, subject to prior written approval by the responsible Member of the Executive Council, make a special grant to such a member or his or her dependants in respect of such prior service, by way of-(b)an annual allowance; or(2)The special grant contemplated in sub-item (1)-(a)is payable in addition to any benefit due or received from the Fund in accordance with this Schedule to such member or his or her dependants; and(b)must be made by the associated municipality out of its own revenue.(3)The sum of the benefit due by the Fund and the special grant contemplated in sub-item (1), may not exceed in value the amount of the benefit that would have been payable by the Fund if the-(a)whole period of such prior service had been treated as continuous service; or(b)benefit for such service had not been reduced to a proportion of the benefits specified in these Regulations.22. Effect of Regulations on other laws
Notwithstanding the provisions of any other law, an associated municipality may only grant a benefit, pension or lump sum to a-(c)dependant of a member or pensioner,in accordance with the provisions of the Act and these Regulations.Schedule 4 (Regulation 54)
Arrangements relating to special conditions
1. Special conditions applicable to persons who are contract employees in accordance with section 57 of the Local Government: Municipal Systems Act
(1)In this Schedule-(a)“fixed period contract” means a contract in accordance with the provisions of the Local Government: Municipal Systems Act;(b)“total cost to employer contract” means a contract in terms of which a member is employed on a total cost to company remuneration package; and(c)“pensionable emoluments” means a percentage of the total remuneration package of a contract employee, being the total cost to the employer of employing a contract employee as his or her pensionable emoluments amounted to at the commencement of these Regulations: Provided that-(i)such contract employee is not entitled to adjust his or her pensionable emoluments during the period of his or her membership of the Fund, save for any inflation linked adjustments to his or her total package remuneration pursuant to his or her fixed period contract;(ii)at all times the pensionable emoluments may be adjusted by the Board of Trustees in its sole discretion after consultation with the Actuary; and(iii)pensionable emoluments of contract employees who concluded fixed period contracts prior to the commencement of this item are not adjusted retrospectively.(2)Notwithstanding the provisions of these Regulations, the provisions of this item only apply to persons who are contract employees as contemplated in section 57 of the Local Government: Municipal Systems Act.(3)(a)No contract employee who immediately prior to the commencement of his or her fixed period contract was a member of the Fund, is obliged on the commencement of his or her fixed period contract to retain his or her membership of the Fund.(b)In the event of the contract employee electing to remain a member of the Fund-(i)the provisions of regulation 30 apply with the necessary changes to his or her membership: Provided that no contract employee on a fixed period contract who was not at the commencement of his or her contract a member of the Fund is entitled to elect to become a member of the Fund; and(ii)a percentage required to be contributed in accordance with items 2, 4 and 5 of Schedule 2 together with any additional contribution or surcharge contemplated in regulation 15 must be deducted in full from the contract employee’s total package remuneration, being the total cost to the employer, and all such contributions less any costs referred to in sub-item (7)(b) is deemed to be employee contributions for the purposes of sub-item (5): Provided that this excludes any contributions in accordance with item 4(1)(e) of Schedule 2.(4)The provisions of item 3 of Schedule 3 do not apply to contract employees.(5)In the event that a contract employee-(a)ceases to be a member in the circumstances other than those referred to in item 1, 2, 4(4), 6 or 7 of Schedule 3; and(b)is a member of the Fund in accordance with sub-item (3),such member is entitled to a lump sum calculated as provided in items 4(1)(a) and (b) of Schedule 3 in respect of the fixed period contract, and the provisions of Schedule 3 apply in respect of any other period of service:Provided that-(i)the member is not entitled to the benefit based on twice his or her total contributions as contemplated in the proviso to item 6(6) of Schedule 3; and(ii)the provisions of Schedule 5 apply for purposes of this sub-item.(6)Upon any renewal of a contract employee’s fixed period contract by the municipality there is deemed to be a continuance of the contract employee’s membership of the Fund and there is no termination of membership at the expiration of-(a)the initial period; and(b)any renewal thereafter,of such fixed period contract.(7)(a)If a fixed period contract is terminated by either the member or the municipality, or is not renewed, the member is entitled to the benefits provided for in sub-item (5).(b)There is excluded from the calculation of any benefit payable to a contract employee in accordance with paragraph (a) any administration charges of the Fund, including any costs in respect of death or disability cover, in an amount as determined from time to time by the Board of Trustees on the advice of the Actuary.(8)(a)A member who becomes a contract employee must inform the Fund thereof within two months of the commencement of the contract with the municipality, or such longer period as the Board of Trustees may determine.(b)The contract employee may, within such period of two months contemplated in paragraph (a), apply to the Fund for his or her contributions not to be based on his or her pensionable emoluments as defined in accordance with sub-item (1), but on such pensionable emoluments as may be determined by such contract employee: Provided that any approval of such application may be subject to such conditions as the Board of Trustees may determine.(c)In the event that the member fails to inform the Fund in accordance with the provisions of paragraph (a) that he or she is a contract employee and the member’s-(i)application in accordance with paragraph (b) is granted; and(ii)contributions are not based on his or her pensionable emoluments as defined in sub-item (1),the contract employee’s continuous service, as defined, may be adjusted by the Board of Trustees in consultation with the Actuary.(9)The provisions of this item apply to all contract employees notwithstanding that their fixed period contracts were concluded with the municipalities concerned prior to the commencement of these Regulations.(10)In the event that a contract employee who was compelled to become a member of the Fund in accordance with regulation 30(5) elects, after the commencement of these Regulations, not to remain a member of the Fund, the benefits payable to such member must be in accordance with sub-item (5).(11)Nothing contained in this item derogates from any greater right acquired by or accrued to any contract employee in accordance with these Regulations: Provided that proof of the greater right is upon the contract employee who must establish same to the satisfaction of the Board of Trustees in consultation with the Actuary and if so established, is thereupon entitled to any such additional benefits.Schedule 5
Annuity strategy and arrangements relating to deferred retirees and special provisions applicable to preserved members on reaching pension age
1. Annuity strategy
(1)The Board of Trustees must develop and implement an annuity strategy in accordance with the provisions of all relevant national and provincial legislation, whether principal or subordinate.(2)From time to time but at least annually, the Board of Trustees must review the annuity strategy to ensure that it remains appropriate for members.(3)When a member retires in terms of item 1, item 2, item 3, item 4 or item 5 of Schedule 3 the following applies-(a)in the case of a member who is not a preserved member and whose benefits are determined in accordance with defined benefit funding principles, his or her pension must be paid by the Fund in accordance with the provisions of these Regulations;(b)in the case of a preserved member who meets the qualifying criteria, he or she must become an in-fund annuitant: Provided that on the election date, a preserved member may elect that the benefit determined in accordance with item 2(b) of Schedule 6, after any commutation in terms of item 11 of Schedule 3, be transferred to a registered insurer to purchase an annuity in the name of the preserved member in accordance with the provisions of item 3 of this Schedule;(c)if the preserved member does not meet the qualifying criteria, the benefit determined in accordance with item 2(b) of Schedule 6, after any commutation in terms of item 11 of Schedule 3, must be transferred to a registered insurer to purchase an annuity in the name of the preserved member in accordance with the provisions of item 3 of this Schedule; and(d)in the case of contract employees contemplated in Schedule 4, the provisions of Schedule 4 also apply.2. Provisions applicable to a deferred retiree
If a member who has retired from the service of the municipality in terms of item 1, item 2, item 4 or item 5 of Schedule 3, elects to become a deferred retiree-(a)contributions by and in respect of the deferred retiree in terms of Schedule 2 must cease after his or her date of retirement from the service of the municipality;(b)the pension in terms of item 1, item 2, item 4 or item 5 of Schedule 3 as applicable, as on the date of his or her retirement from the service of the municipality, must be-(ii)increased for the period between his retirement from the service of the municipality and the election date by pension increases in terms of item 14 of Schedule 3; and(iii)further adjusted to take into account such reasonable expenses as may be decided by the Board of Trustees;(c)the benefit referred to in paragraph (b) must, on the date of his or her retirement from the service of the municipality, be transferred to the pension memorandum account, less any amount commuted in terms of item 11 of Schedule 3, and becomes payable in accordance with regulation 10(2)(a)(iv) (aa); and(d)if the deferred retiree dies before the election date, the benefit payable by the Fund must be determined by the Board of Trustees acting upon the advice of the Actuary.3. Conditions relating to purchase of annuity from a registered insurer
If an annuity is to be purchased for a preserved member from a registered insurer in terms of the proviso to item 1(3)(b) or in terms of item 1(3)(c) of this Schedule, the following must apply-(a)the benefit determined in accordance with item 2(b) of Schedule 6, after any commutation in terms of item 11 of Schedule 3, must be transferred to a registered insurer chosen by the preserved member and approved by the Board of Trustees;(b)the annuity must be purchased in the name of the preserved member and the terms and conditions applicable to such annuity including options elected by the preserved member and the determination of any benefits arising on his or her death, must be agreed between the preserved member and the registered insurer and must be set out in writing by the registered insurer;(c)the annuity so purchased must be subject to the provisions of the Income Tax Act, 1962 (Act No. 58 of 1962), the Long-term Insurance Act, 1998 (Act No. 52 of 1998) and any requirements specified by the South African Revenue Service from time to time; and(d)on purchase of the annuity in terms of this item 3 of Schedule 5, the Fund has no further obligation to, or in respect of, the preserved member, as all such obligations transfer to the registered insurer from whom such annuity or annuities are purchased.4. Conditions relating to payment of annuity from the Fund
The following provisions must apply if a retiring preserved member becomes an in-fund annuitant in terms of the provisions of item 1(3)(b) of this Schedule:(a)the benefit determined in accordance with item 2(b) of Schedule 6, after any commutation in terms of item 11 of Schedule 3, must be transferred to the living annuity account;(b)each living annuity payable from the living annuity account must be payable to the in-fund annuitant in accordance with the terms and conditions of the living annuity policy: Provided that-(i)the amount of a living annuity payable to an in-fund annuitant must, subject to any requirements and restrictions imposed by the South African Revenue Service from time to time and the provisions and restrictions set out in the living annuity policy, be determined by the in-fund annuitant at the commencement date of the payment thereof and thereafter annually as at the anniversary of the commencement date and must be payable exclusively out of the living annuity account;(ii)if the assets comprising the living annuity account in relation to a particular in-fund annuitant become less than an amount prescribed by legislation, the full remaining value of the assets comprising the living annuity account for that in-fund annuitant may be paid to the in-fund annuitant as a lump sum benefit;(iii)each in-fund annuitant must provide such evidence of his or her survival as the Board of Trustees may require. If such evidence is not produced, the Board of Trustees may direct that payment of further instalments of the living annuity be suspended until such evidence is produced; and(iv)an in-fund annuitant may, with the consent of the Board of Trustees, elect that the balance of the assets comprising the living annuity account for that in-fund annuitant be transferred to a registered insurer of his or her choice to purchase an annuity in his or her own name, the provisions of item 3 of this Schedule must apply with the changes required by the context to an annuity purchased from a registered insurer in terms of the provisions of this paragraph.5. Death of an in-fund annuitant
(1)On the death of an in-fund annuitant, the balance of the assets comprising his or her living annuity account must be paid to his or her beneficiaries in accordance with the provisions of section 37C of the Pension Funds Act: Provided that if there are no beneficiaries the balance of the living annuity account must be paid to the estate of the deceased in-fund annuitant as a lump sum.(2)A beneficiary who becomes entitled to payment of a benefit in terms of paragraph above may elect that the balance of the living annuity account or, if there is more than one beneficiary, his or her proportionate share of the balance of the living annuity account, must be-(a)transferred to a registered insurer of his or her choice to purchase an annuity in his or her name;(b)paid to him or her as a lump sum; or(3)If a beneficiary elects the option specified in paragraph (2)(a), the provisions of item 3 of this Schedule apply with the changes required by the context to an annuity purchased from a registered insurer in terms of the provisions of that item.(4)If the beneficiary elects option specified in paragraph (2)(c) the following apply-(a)the amount available for the beneficiary must be used to secure a living annuity for the beneficiary from the living annuity account;(b)the beneficiary must become an in-fund annuitant and the provisions of item 4 of this Schedule must apply with the changes required by the context;(c)on the death of such in-fund annuitant, the balance of the assets comprising his or her living annuity account must continue to be paid to any beneficiaries in such proportions as the Board of Trustees may decide, taking into account the provisions of section 37C of the Pension Funds Act, and in accordance with the terms and conditions set out in item 4 of this Schedule.(5)The provisions of paragraph (1) and (2) apply with the changes required by the context to payment to such beneficiary and also apply to payment to any further beneficiaries on the death of such beneficiary.Schedule 6
Arrangements relating to payment of benefits on leaving service of municipality
1. Preservation and payment of benefit
(1)When a member leaves the service of the municipality in terms of item 3(3)(b), item 4 or item 5 of Schedule 3, the benefit payable in terms of item 3(3)(b), item 4 or item 5 of Schedule 3 must be preserved in the Fund in accordance with the provisions of item 2 below, unless upon leaving the service of the municipality the member elects that the benefit be-(a)paid to him or her as a lump sum; or(b)transferred to another approved pension fund, an approved provident fund, an approved retirement annuity fund or a pension preservation fund: Provided that-(i)transfer to a pension preservation fund is subject to the requirements of the South African Revenue Service as specified from time to time; and(ii)if a member elects an option as specified in paragraph (a) or (b), the benefit must be paid to him or her or transferred to another fund as soon as possible after the date of leaving the service of the municipality.(2)If a member on leaving the service of the municipality does not elect either option specified in paragraph (1)(a) or (1)(b) he or she becomes a preserved member and the provisions of item 2 of this Schedule apply to such member.(3)If a member who elects either an option as specified in paragraph (1)(a) or (1)(b) dies after leaving the service of the municipality but before payment of his or her benefit has been made, the benefit must be paid to his or her estate as a lump sum.2. Provisions applicable to a preserved member
The following provisions apply to a preserved member-(a)after the date of leaving service no further contributions in terms of Schedule 2 must be made by or in respect of the preserved member;(b)the benefit payable on leaving the service of the municipality, determined in accordance with the applicable provision in item 3(3)(b), item 4 or item 5 in Schedule 3; must be transferred to the preserved member account and the benefit preserved in the Fund must henceforth be determined in accordance with the provisions of regulation 10(11); and(c)the preserved member is not entitled to any benefits from the Fund other than the benefit referred to in paragraph(b).3. Payment of benefit to the preserved member
The following provisions apply to payment of the benefit referred to in item 2(b) of this Schedule-(a)on the preserved member reaching pension age, the benefit referred to in item 2(b) of this Schedule must, in accordance with the provisions of item 1(3)(b) or item 1(3)(c) of Schedule 5, either-(i)be transferred to the living annuity account; or(ii)be applied to purchase an annuity from a registered insurer in terms of item 3 of Schedule 5;(b)on the death of the preserved member, such benefit must become payable to his or her beneficiaries in terms of section 37C of the Pension Funds Act; or(c)the preserved member may elect at any time, in circumstances other than those described in (a) and (b) above that such benefit-(i)be paid to him as a lump sum: Provided that the election is made prior to attainment of pension age; or(ii)be transferred to another approved pension fund, an approved provident fund, an approved retirement annuity fund or, subject to the requirements of the South African Revenue Services, to a pension preservation fund.4. Retirement benefits counselling
Before a benefit of a preserved member contemplated in item 2(b) of this Schedule is-(a)dealt with in terms of item 3(a);(b)paid in terms of item 3(c)(i); or(c)transferred to another fund in terms of item 3(c)(ii),that preserved member must have access to retirement benefits counselling.Schedule 7 (Regulation 56)
Laws repealed
Part A – Regulations made in terms of ordinances of the former Province of Natal
| Number and year of law | Title | Extent of repeal |
|---|
| Provincial Notice No. 180 of 1975 | Regulations governing the Natal Joint Municipal Pension Fund (Retirement), 1975, as amended | The whole |
Part B – Rules issued in terms of Regulations made in terms of Ordinances of the former Province of Natal and enactments of KwaZulu-Natal legislature
| Number and year of law | Title | Extent of repeal |
|---|
| Provincial Notice No. 273 of 1996 | Rules for the Management and Administration of the Natal Joint Municipal Pension Fund (Superannuation); the Natal Joint Municipal Pension Fund (Retirement); and the KwaZulu-Natal Joint Municipal Provident Fund), 1996, as amended | Only to the extent that the Rules apply to the Natal Joint Municipal Pension Fund (Retirement) |
