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Rules of the
1 August 2016: Effective date of Rules
1 August 2016: Updated with Amendment Documents No. 1 & 2
1 September 2016: Updated with Amendment Document No. 3
1 August 2017: Updated with Amendment Document No. 4
1 December 2017: Updated with Amendment Document No. 5
1 September 2018: Updated with Amendment Document No. 6
1 November 2018: Updated with Amendment Document No. 7
1 November 2018: Updated with Amendment Document No. 8
1 March 2019: Updated with Amendment Document No. 9
1 May 2019: Updated with Amendment Document No. 10
1 April 2020: Updated with Amendment Document No. 11
Consolidated Retirement Fund for Local Government Rules: 1 August 2016 _______________________________________________________________________________________________________
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Extract from the minutes of a meeting of the Board of Trustees held at Bellville on 8 April
2016
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Table of Contents
1 INTRODUCTION _____________________________________________ 8
1.1 NAME _________________________________________________________ 8 1.2 OBJECT _______________________________________________________ 8 1.3 ESTABLISHMENT OF THE FUND ____________________________________ 8 1.4 LEGAL STATUS _________________________________________________ 9 1.5 REGISTERED OFFICE ____________________________________________ 9 1.6 DEFINITIONS __________________________________________________ 9
ACT: _______________________________________________________ 10 ACTUARY: ____________________________________________________ 10 ADJUDICATOR: ________________________________________________ 10 ADMINISTRATOR: ______________________________________________ 10 ANNUITY: ____________________________________________________ 10 ANNUITY STRATEGY: ___________________________________________ 10 APPROVED PENSION PRESERVATION FUND: ________________________ 11 APPROVED PROVIDENT PRESERVATION FUND: ______________________ 11 APPROVED RETIREMENT ANNUITY FUND: __________________________ 11 AUDITOR: ____________________________________________________ 11 BENEFICIARY: _________________________________________________ 11 BOARD OF TRUSTEES: __________________________________________ 11 CITY OF CAPE TOWN: __________________________________________ 11 COMPLAINANT: ________________________________________________ 12 COUNCILLOR: _________________________________________________ 12 COUNCILLOR TRUSTEE: _________________________________________ 12 DEFERRED MEMBER: ___________________________________________ 12 DEPENDANT: __________________________________________________ 12 EFFECTIVE DATE: ______________________________________________ 12 ELIGIBLE CHILD: _______________________________________________ 13 ELIGIBLE SPOUSE: _____________________________________________ 13 EMPLOYEE: ___________________________________________________ 14 EXPECTED PENSION: ___________________________________________ 14 FSCA: _______________________________________________________ 14 FUND: _______________________________________________________ 14 FUND YEAR: __________________________________________________ 15 GROWTH PORTFOLIO: __________________________________________ 15 INSURER: ____________________________________________________ 15 INCOME CONTINUATION BENEFITS: _______________________________ 15 INSURED RISK BENEFIT: ________________________________________ 15 INVESTMENT CONSULTANT: _____________________________________ 15 INVESTMENT MANAGER: ________________________________________ 15 INVESTMENT POLICY STATEMENT: ________________________________ 16 LIVING ANNUITANT: ____________________________________________ 16 LIVING ANNUITY: ______________________________________________ 16 MEMBER: _____________________________________________________ 16 MEMBER’s SHARE: _____________________________________________ 16 MEMBER TRUSTEE: _____________________________________________ 16 MINIMUM INDIVIDUAL RESERVE: _________________________________ 17 MODERATE PORTFOLIO: ________________________________________ 17 MUNICIPAL ELECTIONS: _________________________________________ 17 MUNICIPAL MANAGER: __________________________________________ 17
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NEW EMPLOYEE: _______________________________________________ 17 NORMAL RETIREMENT AGE: _____________________________________ 18 NORMAL RETIREMENT DATE: ____________________________________ 18 PAID-UP MEMBER: _____________________________________________ 18 PARTICIPATING EMPLOYER: _____________________________________ 18 PENSION: ____________________________________________________ 19 PENSION FUND: _______________________________________________ 19 PENSIONABLE REMUNERATION: __________________________________ 19 PENSIONER: __________________________________________________ 19 PRESERVATION PENSION ACCOUNT: ______________________________ 20 PREVIOUS SCHEME: ____________________________________________ 20 PRINCIPAL OFFICER: ___________________________________________ 20 PROTECTION PORTFOLIO: _______________________________________ 20 RETIREMENT BENEFITS COUNSELLING: ____________________________ 20 RECOGNISED MATRIMONIAL UNION: ______________________________ 20 REGISTRAR: __________________________________________________ 21 RULES: _______________________________________________________ 21 SERVICE: _____________________________________________________ 21 SHARIAH PORTFOLIO: __________________________________________ 21 TRANSFER VALUE: _____________________________________________ 21 TRUSTEE GUIDELINES, PROTOCOL AND POLICIES: ___________________ 21 TRUSTEES: ___________________________________________________ 22 UNCLAIMED BENEFIT: __________________________________________ 22
2. MANAGEMENT OF THE FUND __________________________________ 22
2.1. INTRODUCTION _______________________________________________ 22 2.2 ELECTION OF TRUSTEES ________________________________________ 22
2.2.1 BOARD OF TRUSTEES MEETINGS ________________________ 24 2.2.2 OFFICE OF A TRUSTEE __________________________________ 26
2.3 DUTIES OF THE BOARD OF TRUSTEES ______________________________ 28 2.4 POWERS OF THE BOARD OF TRUSTEES _____________________________ 30
2.4.1 LEGAL ACTIONS ________________________________________ 30 2.4.2 PERSONAL LIABILITY __________________________________ 30 2.4.3 FIDELITY INSURANCE ___________________________________ 30 2.4.4 INDEMNIFICATION ____________________________________ 31 2.4.5 COMMITTEES __________________________________________ 31 2.4.6 APPOINTMENT OF OTHER PERSONS _____________________ 32 2.4.7 TRUSTEE COMPENSATION ______________________________ 33
2.5 AMENDMENT TO THE RULES _____________________________________ 34
3. PRINCIPAL OFFICER ________________________________________ 34
3.1 APPOINTMENT OF PRINCIPAL OFFICER _____________________________ 34 3.2 DUTIES OF THE PRINCIPAL OFFICER _______________________________ 35 3.3 APPOINTMENT OF DEPUTY PRINCIPAL OFFICER: _____________________ 35
4. GENERAL MEETINGS ________________________________________ 36
5. MEMBERSHIP ______________________________________________ 36
5.1 ELIGIBILITY AND ADMISSION ____________________________________ 36 5.2 SPECIAL PROVISIONS IN RESPECT OF NEW _________________________ 38 EMPLOYEES _________________________________________________________ 38 5.2A SPECIAL PROVISIONS IN RESPECT OF COUNCILLORS _________________ 38 5.3 TERMINATION ________________________________________________ 39
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5.4 TERMINATION OF MEMBERSHIP OF A MUNICIPAL MANAGER ___________ 39 5.5 TERMINATION OF MEMBERSHIP OF A COUNCILLOR ___________________ 40
6. FINANCIAL STRUCTURE OF THE FUND ___________________________ 41
6.1 FUND ACCOUNTS ______________________________________________ 41 6.2 COMPOSITION OF ACCOUNTS ____________________________________ 41
6.2.1 Member Share Account _________________________________ 41 6.2.2 Pensions Account ______________________________________ 44 6.2.3 Reserve Accounts ______________________________________ 46 6.2.3(A) Processing Reserve Account _________________________ 46 6.2.3(B) Expense Reserve Account ____________________________ 48 6.2.4 Risk Reserve Account ___________________________________ 49 6.2.5 Data Reserve Account __________________________________ 52
7. CONTRIBUTIONS ___________________________________________ 55
7.1 MEMBER CONTRIBUTIONS _______________________________________ 55 7.2 PARTICIPATING EMPLOYER CONTRIBUTIONS _______________________ 56 7.3 ADDITIONAL VOLUNTARY CONTRIBUTIONS _________________________ 58 7.4 PAYMENT OF CONTRIBUTIONS ___________________________________ 58 7.5 TEMPORARY ABSENCE __________________________________________ 60
8. RETIREMENT ______________________________________________ 60
8.1 NORMAL RETIREMENT __________________________________________ 60 8.2 EARLY RETIREMENT ____________________________________________ 61 8.3 COMPULSORY EARLY RETIREMENT ________________________________ 61 8.4 LATE RETIREMENT _____________________________________________ 62 8.5 COMMUTATION AND PENSION OPTIONS ___________________________ 63 8.6 LIVING ANNUITY _______________________________________________ 64
9. DEATH ___________________________________________________ 67
9.1 DEATH PRIOR TO RETIREMENT ___________________________________ 67 CATEGORY A __________________________________________________ 68 CATEGORY B __________________________________________________ 68 CATEGORY C __________________________________________________ 69 CATEGORY D __________________________________________________ 69 CATEGORY E __________________________________________________ 69 CATEGORY F __________________________________________________ 69 CATEGORY G __________________________________________________ 70
9.2 DEATH AFTER RETIREMENT ______________________________________ 70 9.3 FUNERAL BENEFITS ____________________________________________ 72
If the MEMBER dies and he leaves an ELIGIBLE SPOUSE, such ELIGIBLE SPOUSE may request, in writing and in the format prescribed by the BOARD OF TRUSTEES, that the total of or any portion of the lump sum benefit to which the ELIGIBLE SPOUSE is entitled in terms of the provisions of RULES 9.1(5), 9.2(a) and 9.2(d), be transferred to one of the following: ___________________________________________ 73
10. DISABILITY BENEFITS _______________________________________ 74
10.1 LUMPSUM DISABILITY BENEFITS __________________________________ 74 CATEGORY A __________________________________________________ 75 CATEGORY B __________________________________________________ 75 CATEGORY C __________________________________________________ 75 CATEGORY D __________________________________________________ 76
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CATEGORY E __________________________________________________ 76 CATEGORY F __________________________________________________ 76 CATEGORY G __________________________________________________ 76
10.2 INCOME DISABILITY BENEFIT ____________________________________ 76 10.2.1 INCOME DISABILITY BENEFITS UP TO 30 JUNE 2002 ______ 77 10.2.2 INCOME DISABILITY BENEFITS WITH EFFECT FROM 1
OCTOBER 2009 ________________________________________ 79 10.3 NON INSURED RISK BENEFITS ____________________________________ 81 10.4 DREAD DISEASE BENEFIT ________________________________________ 81
11. WITHDRAWAL _____________________________________________ 82
11.1 WITHDRAWAL BENEFIT _________________________________________ 82 11.2 REDUNDANCY OR RETRENCHMENT ________________________________ 82 11.3 PRESERVATION BENEFIT ________________________________________ 84
12. TRANSFERS FROM OR TO OTHER FUNDS _________________________ 85
13. DEFERRED MEMBERS ________________________________________ 88
14. MISCELLANEOUS PROVISIONS REGARDING BENEFITS ______________ 91
14.1 PAYMENT OF BENEFITS _________________________________________ 91 14.2 PAYMENT OTHER THAN SPECIFIED ________________________________ 92 14.3 PARTICIPATING EMPLOYER’S NOTIFICATION OF REASONS FOR
TERMINATION OF SERVICE ______________________________________ 93 14.4 BENEFIT INSURANCE ___________________________________________ 93 14.5 CESSATION OF INSURED RISK BENEFITS ___________________________ 94 14.6 CONVERSION OPTION: RISK BENEFITS ____________________________ 94 14.7 BENEFITS NON-ASSIGNABLE _____________________________________ 94 14.8 DEDUCTIONS FROM BENEFITS ___________________________________ 94 14.9 INTEREST ON LATE PAYMENT OF BENEFITS _________________________ 96 14.10 UNCLAIMED BENEFITS __________________________________________ 96 14.11 PAYMENT OF PENSIONS _________________________________________ 97 14.12 PENSION ADJUSTMENTS ________________________________________ 99
15. HOUSING LOANS __________________________________________ 101
16. FINANCIAL MATTERS _______________________________________ 101
16.1 EXPENSES ___________________________________________________ 102
17. ACTUARIAL VALUATIONS ____________________________________ 102
18. INVESTMENTS ____________________________________________ 103
18.1 BANK ACCOUNT ______________________________________________ 103 18.2 INVESTMENT PROCEDURES _____________________________________ 103 18.3 GROWTH PORTFOLIO __________________________________________ 104 18.4 PROTECTION PORTFOLIO ______________________________________ 104 18.5 MODERATE PORTFOLIO ________________________________________ 104 18.6 SHARIAH PORTFOLIO __________________________________________ 104
19. GENERAL PROVISIONS _____________________________________ 105
19.1 MONIES NOT TO REVERT TO PARTICIPATING EMPLOYER _____________ 105 19.2 COPIES OF DOCUMENTS _______________________________________ 105 19.3 COMPLAINTS _________________________________________________ 105
20. PRESERVATION PENSION ACCOUNT ___________________________ 106
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20.1 TRANSFERS INTO THE PRESERVATION PENSION ACCOUNT ___________ 106 20.2 FINANCIAL STRUCTURE OF THE PRESERVATION PENSION ACCOUNT ____ 106 20.3 RETIREMENT _________________________________________________ 108
20.3.1 NORMAL RETIREMENT _________________________________ 108 20.3.2 EARLY RETIREMENT ___________________________________ 108 20.3.3 COMPULSORY EARLY RETIREMENT _____________________ 108 20.3.4 LATE RETIREMENT ____________________________________ 110 20.3.5 COMMUTATION AND PENSION OPTIONS ________________ 110
20.4 DEATH ______________________________________________________ 111 20.5 DISABILITY __________________________________________________ 112 20.6 WITHDRAWAL ________________________________________________ 112 20.7 RETRENCHMENT ______________________________________________ 113 20.8 TRANSFERS OUT ______________________________________________ 114 20.9 HOUSING LOANS______________________________________________ 114 20.10 PROTECTION PORTFOLIO ______________________________________ 114 20.11 MODERATE PORTFOLIO ________________________________________ 114 20.12 UNCLAIMED BENEFITS _________________________________________ 114 20.13 COSTS _______________________________________________________ 115 20.14 DEFERRED MEMBERS __________________________________________ 115
21. DISSOLUTION OF FUND _____________________________________ 115
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1 INTRODUCTION
These RULES are the RULES of the FUND, which are effective from the
EFFECTIVE DATE of 1 August 2016.
1.1 NAME
The Cape Joint Retirement Fund was originally established in terms of
Ordinance 23 of 1969 of the Cape Province and was registered in terms
of the ACT with effect from 1 May 1996.
Members of the Cape Joint Pension Fund were given the option to
transfer to the Cape Joint Retirement Fund as at 1 May 1996.
The name of the Fund was changed with effect from 1 July 2009 to the
Cape Retirement Fund for Local Government.
The name of the Fund was changed with effect from 1 July 2015 to the
Consolidated Retirement Fund for Local Government.
1.2 OBJECT
The object of the FUND is to provide retirement and ancillary benefits
for the MEMBERS and BENEFICIARIES as set out in the RULES.
1.3 ESTABLISHMENT OF THE FUND
The FUND is established for employees of participating municipalities,
hospitals or other institutions as specified under PARTICIPATING
EMPLOYER and these RULES apply to all such PARTICIPATING
EMPLOYERS.
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1.4 LEGAL STATUS
The FUND is a separate legal entity registered in terms of the ACT,
distinct from its MEMBERS and shall be capable in law, in its own name,
of suing and of being sued, and of acquiring, holding and alienating
property, movable and immovable.
1.5 REGISTERED OFFICE
The registered office of the FUND is at Combined HQ, 4 Bridal Close,
Tyger Falls, Bellville or at such other address as may be determined by
the FUND from time to time.
1.6 DEFINITIONS
In these RULES where the context so requires:
▪ words and expressions defined in the ACT and not in the RULES
shall bear the meanings assigned to them in the ACT;
▪ words and expressions importing one gender shall include the other
gender;
▪ words and expressions denoting the singular number shall include
the plural and vice versa;
▪ the headings are solely for ease of reference and are not to be
taken into account in the interpretation of the RULES; and
▪ the following words and expressions shall bear the meanings
assigned to them below.
Amended 1 Aug 2017
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ACT:
the PENSION FUNDS ACT, 1956 (Act 24 of 1956), as amended,
and the regulations framed there-under;
ACTUARY:
the valuator of the FUND appointed in terms of these RULES and
the provisions of the ACT;
ADJUDICATOR:
the PENSION FUNDS ADJUDICATOR appointed in terms of the
ACT;
ADMINISTRATOR:
the benefits ADMINISTRATOR appointed in terms of these RULES
and the provisions of the ACT;
ANNUITY:
a pension purchased outside of the FUND for the benefit of a
MEMBER and his dependants;
ANNUITY STRATEGY:
the annuity strategy in respect of retiring MEMBERS as adopted by
the BOARD OF TRUSTEES with effect from 1 November 2018 in
accordance with the provisions of Regulation 39 to the ACT;
Added 1 Nov 2018
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APPROVED PENSION PRESERVATION FUND:
a fund recognised in law as a pension preservation fund;
APPROVED PROVIDENT PRESERVATION FUND:
a fund recognised in law as a provident preservation fund;
APPROVED RETIREMENT ANNUITY FUND:
a fund recognised in law as a retirement annuity fund;
AUDITOR:
an AUDITOR registered in terms of the Public Accountants and
Auditors Act, 1991 (Act 80 of 1991) and appointed in terms of
these RULES and the provisions of the ACT;
BENEFICIARY:
any person who is entitled to benefits in terms of these RULES;
BOARD OF TRUSTEES:
the TRUSTEES constituted in terms of these RULES to administer
the FUND;
CITY OF CAPE TOWN:
a municipality established in terms of the Local Government
Municipal Structures Act, 1998 (Act 117 of 1998); and in relation
to a NEW EMPLOYEE, in whose SERVICE such NEW EMPLOYEE is,
in relation to the provisions of RULE 5.2;
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COMPLAINANT:
a complainant as defined in the ACT;
COUNCILLOR:
a member of a municipal council in terms of the Local Government
Municipal Structures Act, 1998 (Act 117 of 1998);
COUNCILLOR TRUSTEE:
A COUNCILLOR elected as a TRUSTEE as set out in RULE
2.2(1)(b);
DEFERRED MEMBER:
a MEMBER who has elected to receive a deferred retirement
benefits in terms of RULE 13 or a MEMBER who fails to complete a
retirement form in the written format prescribed by the BOARD OF
TRUSTEES instructing the FUND which retirement benefit option
he chooses, the payment of which has not yet commenced;
DEPENDANT:
a dependant as defined in the ACT;
EFFECTIVE DATE:
the date upon which the registered RULES or RULE amendments
become effective;
Added 1 Dec 2017
Replaced 1 March 2019
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ELIGIBLE CHILD:
a PENSIONER’S child or stepchild, whether born out of wedlock or not,
or, on proof of adoption to the satisfaction of the FUND, an adopted
child, who-
(a) in the case of a PENSIONER, was-
(i) a child when such PENSIONER retired; or
(ii) born of a marriage subsisting when such PENSIONER
retired;
(b) in the case of a stepchild or a child born out of wedlock, is
dependent on the PENSIONER;
(i) is under the age of eighteen years;
(ii) is under the age of twenty-one years and is, in the opinion
of the FUND, receiving full-time education;
(iii) is, in the opinion of the FUND permanently incapacitated by
reason of physical or mental infirmity from being self-
supporting;
All PENSIONS payable to an ELIGIBLE CHILD will be paid in terms of the
applicable TRUSTEE GUIDELINES, PROTOCOL POLICY.
The reference to "PENSIONER" in this definition shall be to a "Category
A PENSIONER" only.
ELIGIBLE SPOUSE:
the surviving partner of a MEMBER –
(a) when such MEMBER died while in SERVICE and a benefit
was payable to such a partner, or
Replaced 1 Nov 2018
Added 1 Nov 2018
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(b) in receipt of a PENSION if married to the MEMBER when
the MEMBER retired from SERVICE, or
(c) in receipt of a LIVING ANNUITY.
A surviving partner shall include a party to a RECOGNISED
MATRIMONIAL UNION or custom recognised as a marriage as
defined herein, provided that, in the event of multiple partners,
the FUND may in their sole discretion, allocate such benefit in such
proportions as they may deem fit;
EMPLOYEE:
any person who is in the SERVICE of and remunerated by a
PARTICIPATING EMPLOYER and who is not regarded as a NEW
EMPLOYEE;
EXPECTED PENSION:
the PENSION as calculated by the ACTUARY, at an investment rate
net of inflation, that would be payable to a MEMBER on his
NORMAL RETIREMENT DATE if his PENSIONABLE
REMUNERATION, as at that particular point in time, were to
remain unchanged until his NORMAL RETIREMENT DATE;
FSCA:
The Financial Sector Conduct Authority, established in terms of the
Financial Sector Regulation Act, 9 of 2017;
FUND:
the CONSOLIDATED RETIREMENT FUND FOR LOCAL
GOVERNMENT;
Added 1 March 2019
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FUND YEAR:
means from 1 July to 30 June;
GROWTH PORTFOLIO:
INSURER:
an INSURER registered in terms of the Long Term Insurance Act,
1998, to transact long term or disability insurance business;
INCOME CONTINUATION BENEFITS:
the monthly income payable to a disabled MEMBER by the
INSURER in terms of the INSURED RISK BENEFIT policy applicable
to category E MEMBERS;
INSURED RISK BENEFIT:
the risk benefits (death, disability and funeral benefits) reinsured
by the FUND in terms of a policy of insurance;
INVESTMENT CONSULTANT:
the investment consultant(s) registered by the REGISTRAR in
terms of the ACT and appointed by the BOARD OF TRUSTEES
from time to time to advise them in respect of the investment of
the FUND’s assets;
INVESTMENT MANAGER:
an institution registered by the REGISTRAR in terms of the ACT
and authorised in terms of such approval to administer the
investment of retirement fund assets and which is appointed in
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terms of these RULES by the BOARD OF TRUSTEES from time to
time;
INVESTMENT POLICY STATEMENT:
the policy adopted by the BOARD OF TRUSTEES in accordance
with the provisions of Regulation 37 to the ACT, in which the
default investment portfolio, the investment objectives and
strategy of the FUND are recorded;
LIVING ANNUITANT:
a BENEFICIARY who is in receipt of a LIVING ANNUITY from the
FUND;
LIVING ANNUITY:
A LIVING ANNUITY payable by the FUND to a LIVING ANNUITANT
or to an ELIGIBLE SPOUSE in terms of a draw down rate or a
range of draw down rates as determined by the FUND;
MEMBER:
a MEMBER as defined in the ACT;
MEMBER’s SHARE:
the individual MEMBER’s SHARE which is held by the FUND in
respect of each MEMBER in terms of the RULES;
MEMBER TRUSTEE:
A MEMBER elected as a TRUSTEE as set out in RULE 2.2(1)(a);
Added 1 Dec 2017
Added 1 Nov 2018
Added 1 Nov 2018
Added 1 March 2019
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MINIMUM INDIVIDUAL RESERVE:
the minimum individual reserve payable to an exiting MEMBER as
contemplated in the ACT and as calculated by the ACTUARY;
MODERATE PORTFOLIO:
MUNICIPAL ELECTIONS:
the general municipal elections which are held in South Africa from
time to time;
MUNICIPAL MANAGER:
a person who has been appointed as a municipal manager as
defined in the Municipal Systems Act, 2000 (Act No. 32 of 2000)
and this definition shall include a manager who is directly
accountable to the municipal manager and who has been
appointed in terms of sections 56 and 57 of the Municipal Systems
Act, 2000;
NEW EMPLOYEE:
an employee who either at the time of joining the FUND was
employed on a contract with the CITY OF CAPE TOWN, or who,
has subsequently been newly employed by the CITY OF CAPE
TOWN from 1 August 2006 and where the CITY OF CAPE TOWN
has applied to the FUND for the employee to join this new
membership category.
This definition will include all employees employed by any
PARTICIPATING EMPLOYER and who elected to join the FUND
since 1 January 2007.
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Deleted 1 March 2019
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NORMAL RETIREMENT AGE:
the age of 65 years.
NORMAL RETIREMENT DATE:
any day during the month in which a member attains his NORMAL
RETIREMENT AGE;
PAID-UP MEMBER:
a MEMBER who leaves SERVICE and who has elected to receive a
deferred withdrawal benefit in terms of RULE 13.A, or a MEMBER
who fails to complete a withdrawal form in the manner as
prescribed in terms of RULE 11.4 instructing the FUND which
withdrawal option he or she chooses;
PARTICIPATING EMPLOYER:
(a) any type of municipality established in terms of legislation
and in relation to a MEMBER, the municipality in whose
SERVICE such MEMBER is;
(b) any hospital or other institution that fulfil the requirements
of a paragraph (a) pension fund as defined in the Income
Tax Act that participate in the FUND and in whose SERVICE
such MEMBER is.
A PARTICIPATING EMPLOYER shall be deemed to participate in
the FUND once contributions are paid to the FUND in respect of
any employee or COUNCILLOR of such PARTICIPATING
EMPLOYER;
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PENSION:
a PENSION payable by the FUND to a PENSIONER or to an
ELIGIBLE SPOUSE or ELIGIBLE CHILD in terms of factors provided
by the ACTUARY from time to time;
PENSION FUND:
a fund recognised in law as a pension fund which pays a maximum
commutation on retirement of one-third (1/3rd) of the value of the
benefit;
PENSIONABLE REMUNERATION:
the remuneration on which contributions are paid and which
remuneration shall be determined by the PARTICIPATING
EMPLOYER and which shall be advised by the PARTICIPATING
EMPLOYER to the FUND each month.
Provided that the PENSIONABLE REMUNERATION in respect of a
category E member who is in receipt of a monthly INCOME
CONTINUATION BENEFIT from the INSURER shall be the
PENSIONABLE REMUNERATION as at the date of disability
increased annually by the percentage increase applied by the
INSURER to the monthly INCOME CONTINUATION BENEFIT;
PENSIONER:
a BENEFICIARY who is in receipt of a PENSION from the FUND,
either referring to a Category A PENSIONER or a Category B
PENSIONER or Category C PENSIONER, or all, where the RULES so
require.
Category A PENSIONER shall refer to a PENSIONER whose
PENSION commenced prior to 1 January 2016;
Amended 1 Nov 2018
& 1 April 2020
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Category B PENSIONER shall refer to a PENSIONER whose
PENSION commences on or after 1 November 2018;
Category C PENSIONER shall refer to an ELIGIBLE SPOUSE of a
MEMBER at the MEMBER’S death who instructed the FUND to
secure a PENSION payable by the FUND for such ELIGIBLE
SPOUSE in terms of RULE 9.5.2;
PRESERVATION PENSION ACCOUNT:
PREVIOUS SCHEME:
the transferor fund from which a MEMBER transfers his benefit
into this FUND;
PRINCIPAL OFFICER:
the person appointed by the BOARD OF TRUSTEES in terms of
these RULES and the ACT;
PROTECTION PORTFOLIO:
a conservative investment portfolio which offers the least risk
exposure;
RETIREMENT BENEFITS COUNSELLING:
the retirement benefits counselling as envisaged in Regulation 38
and 39 to the ACT;
RECOGNISED MATRIMONIAL UNION:
a legal marriage or a union according to customary law or a union
recognised as a marriage under any religion of a PENSIONER and
Added 1 Nov 2018
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another person, which is deemed a RECOGNISED MATRIMONIAL
UNION by the FUND; provided that a RECOGNISED MATRIMONIAL
UNION may, at the discretion of the BOARD OF TRUSTEES include
a legal marriage which has been dissolved but where the other
person is still to some degree financially dependent upon the
PENSIONER;
REGISTRAR:
RULES:
these RULES as amended from time to time;
SERVICE:
SERVICE as an EMPLOYEE, or otherwise, of one or more
PARTICIPATING EMPLOYERS depending upon the applicable
conditions of employment;
SHARIAH PORTFOLIO:
TRANSFER VALUE:
the benefit transferred from the PREVIOUS SCHEME which shall be
credited to the MEMBER’S SHARE or PRESERVATION PENSION
ACCOUNT in the FUND;
TRUSTEE GUIDELINES, PROTOCOL AND POLICIES:
documents approved by the BOARD OF TRUSTEES from time to
time which details the application and procedure of any matter
referred to in the RULES and the ACT;
Deleted 1 March 2019
Deleted 1 March 2019
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TRUSTEES:
the individual TRUSTEES who are represented on the BOARD OF
TRUSTEES;
UNCLAIMED BENEFIT:
an unclaimed benefit as defined in the ACT;
2. MANAGEMENT OF THE FUND
2.1. INTRODUCTION
The FUND is controlled and managed in terms of these RULES by the
BOARD OF TRUSTEES which itself or through its duly authorised
assignees acts for and on behalf of the FUND.
2.2 ELECTION OF TRUSTEES
(1) The FUND shall be managed in terms of these RULES by a BOARD
OF TRUSTEES. The BOARD OF TRUSTEES must arrange elections
of TRUSTEES whenever required in terms of the RULES. The
BOARD OF TRUSTEES will consist of twelve (12) members of
which -
(a) eight (8) MEMBER TRUSTEES shall be elected by MEMBERS
on a geographical basis as follows:
(i) four (4) MEMBER TRUSTEES from the Western Cape;
(ii) two (2) MEMBER TRUSTEES from the Eastern Cape;
(iii) two (2) MEMBER TRUSTEES from the Northern Cape
representing the Northern Region (referring to those
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provinces other than the Western Cape and Eastern
Cape); and
(b) four (4) COUNCILLOR TRUSTEES shall be elected by
COUNCILLORS, who are also MEMBERS, on a geographical
basis as follows:
(i) two (2) COUNCILLOR TRUSTEES from the Western
Cape;
(ii) one (1) COUNCILLOR TRUSTEES from the Eastern
Cape;
(iii) one (1) COUNCILLOR TRUSTEE from the Northern
Cape representing the Northern Region (referring to
those provinces other than the Western Cape and
Eastern Cape),
(c) provided that a COUNCILLOR who is also a MEMBER may
not act simultaneously as a MEMBER TRUSTEE and a
COUNCILLOR TRUSTEE.
(2) Only a serving TRUSTEE or a nominated MEMBER (who in writing
has declared willing to serve) may be elected as a TRUSTEE.
(3) A MEMBER may nominate as many MEMBERS for election as
TRUSTEES as is required at the time. Each nomination must be in
writing and seconded by a minimum of five (5) MEMBERS.
(4) The TRUSTEE elected will fill the vacancy on the BOARD OF
TRUSTEES in the specific geographical area.
(5) The basis of election of a TRUSTEE shall be by a simple majority
vote either on forms or electronically.
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(6) TRUSTEES shall hold office for a period of five (5) years.
(7) A newly elected TRUSTEE must have such levels of skills as
prescribed in the TRUSTEE GUIDELINES, PROTOCOL AND
POLICIES and as prescribed by the REGISTRAR as required in
terms of the ACT.
2.2.1 BOARD OF TRUSTEES MEETINGS
(1) As soon as possible after the election of the
TRUSTEES, but not later than three (3) months after
taking up office, the TRUSTEES shall hold an ordinary
meeting. Such meeting shall be chaired by the
PRINCIPAL OFFICER for the duration of the election of
the chairperson. The TRUSTEES shall by secret ballot
elect a chairperson and a deputy chairperson from
amongst their number. In the event of an equality of
votes when voting by ballot, a second secret ballot
election will be executed for the people who received
equal votes. If there still is an equality of votes after
the second secret ballot election, the matter shall be
determined by drawing lots.
The elected chairperson and deputy chairperson shall
serve in such capacity for a period of five (5) years.
(2) The deputy chairperson shall act as chairperson in the
event of the chairperson being absent or unwilling to
act or incapable of acting.
(3) Should both the chairperson and deputy chairperson
be absent or unwilling to act or incapable of acting, the
TRUSTEES present at the meeting shall elect a
chairperson for that meeting from the TRUSTEES
present at the meeting.
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(4) In the event of the chairperson resigning as a
TRUSTEE or as the chairperson before the expiry of his
term, the deputy chairperson shall assume the role of
chairperson. A new deputy chairperson shall be
elected by secret ballot.
(5) The BOARD OF TRUSTEES shall meet at least once
every three (3) months. Provided that the chairperson
may from time to time convene additional meetings or
when requested thereto by at least eight (8)
TRUSTEES.
(6) Fifty percent plus one (50% plus 1) of the total
TRUSTEES on the BOARD OF TRUSTEES shall
constitute a quorum, provided that at least four (4)
MEMBER TRUSTEES are present.
(7) Decisions by the BOARD OF TRUSTEES at a meeting
shall be made by a majority of votes of the TRUSTEES
present, provided that if there is an equality of votes,
the chairperson of the meeting will have a casting
vote.
(8) Any urgent matter may be decided upon by majority
decision of the full BOARD OF TRUSTEES in terms of a
round robin decision taken by electronic means.
(9) Video and telephone conferencing
(a) The BOARD OF TRUSTEES may, if the
chairperson so decides, conduct a meeting by
using a conference telephone or any
communication equipment (including video link)
that allows everybody participating in the
meeting to speak to and hear each other.
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(b) Taking part in a meeting conducted in terms of
this rule will, provided there is a quorum, be
counted as a meeting of the BOARD OF
TRUSTEES.
(c) The remaining provisions of these RULES
applicable to meetings of the BOARD OF
TRUSTEES apply to any meeting conducted in
this manner.
2.2.2 OFFICE OF A TRUSTEE
(1A) Notwithstanding the provisions of sub rules 2.2(4),
2.2(5) and 2.2(7) the office of a TRUSTEE shall
become vacant if a TRUSTEE-
(a) contemplated by sub rule 2.2(1)(a), ceases to
be a MEMBER of the FUND;
(b) contemplated by sub rule 2.2(1)(b), ceases to
be a COUNCILLOR;
(c) at any time tenders his resignation in writing
from a specified date as a TRUSTEE;
(d) becomes of unsound mind or is subject to a
reception order in terms of the Mental Health
Act, 1973 (Act 18 of 1973), or has been
declared by a competent court to be incapable
of managing his affairs;
(e) has been declared insolvent or has
surrendered or assigned his estate for the
benefit of his creditors;
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(f) is found guilty, whether in the Republic of
South Africa or elsewhere of misconduct of
which dishonesty is an element;
(g) is convicted, whether in the Republic of South
Africa or elsewhere of any crime of which
dishonesty is an element irrespective if such
conviction is under appeal;
(h) is convicted of any crime after 1994, whether
in the Republic of South Africa or elsewhere
and is sentenced to imprisonment without the
option of a fine irrespective if such conviction
or sentence is under appeal;
(i) after a due process and investigation has
taken place by the BOARD OF TRUSTEES, is
found guilty of a breach of the code of
conduct.
(1B) The provisions of sub rule (1A) shall apply to any
person who is nominated to stand as a TRUSTEE as
well as a person who is serving as a TRUSTEE.
(2) Any vacancy on the BOARD OF TRUSTEES shall be
filled as set out in the TRUSTEE GUIDELINES,
PROTOCOL AND POLICIES.
(3) A TRUSTEE who is filling a vacancy in terms of RULE
2.2.2(1B)(2) above shall hold office for the unexpired
period of his predecessor's term.
(4)
(5) Any vacancy on the BOARD OF TRUSTEES must be
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filled within the period prescribed by the Registrar.
(6) When a TRUSTEE is removed from office other than as
a result of the expiry of his term of office or by
voluntary resignation, the TRUSTEE must provide the
REGISTRAR with written reasons for such removal
within the prescribed period and in the prescribed
format.
2.3 DUTIES OF THE BOARD OF TRUSTEES
(1) The BOARD OF TRUSTEES shall
(a) take all reasonable steps to ensure that the interests of
MEMBERS in terms of the RULES and the provisions of the
ACT are protected at all times;
(b) act with due care, diligence and good faith;
(c) avoid conflicts of interest;
(d) act with impartiality in respect of all MEMBERS,
PENSIONERS and BENEFICIARIES;
(e) have and be entitled to exercise all powers, rights and
privileges vested upon them in accordance with the
provisions of these RULES and all relevant legislation;
(f) ensure that proper control systems are employed by or on
behalf of the FUND;
(g) ensure that adequate and appropriate information is
communicated to MEMBERS informing them of their
rights, benefits and duties in terms of the RULES;
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(h) ensure that contributions are paid timeously to the FUND
in accordance with the provisions of the ACT;
(i) obtain expert advice on matters where the BOARD OF
TRUSTEES deem it necessary;
(j) ensure that the RULES and the operation and
administration of the FUND comply with the provisions of
the ACT and any other relevant legislation;
(k) ensure that proper books and records of the operations of
the FUND are kept to ensure the proper management of
the FUND and that the books are closed off as at the end
of the FUND YEAR and that these are audited by the
AUDITOR;
(l) approve the FUND’s accounts and make available copies
for inspection by MEMBERS or any other person who has
an interest in the FUND;
(m) maintain in accordance with the ACT, at the FUND’s
registered office, registers containing the information as
prescribed in the ACT;
(n) carry out all other duties as required by the ACT;
(o) be subject to the code of conduct as approved by the
BOARD OF TRUSTEES.
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2.4 POWERS OF THE BOARD OF TRUSTEES
2.4.1 LEGAL ACTIONS
The BOARD OF TRUSTEES may in the name of the FUND
institute and defend legal actions required to promote or
safeguard the interests of the FUND.
2.4.2 PERSONAL LIABILITY
(1) The BOARD OF TRUSTEES and sub-committees are not
personally liable for any loss which the PARTICIPATING
EMPLOYERS, MEMBERS, PENSIONERS or BENEFICIARIES
may suffer as a result of their actions, provided that the
actions are in accordance with the RULES, applicable
legislation and are bona fide.
(2) The BOARD OF TRUSTEES shall ensure that the FUND’s
service providers effect and maintain insurance to
adequately indemnify the FUND against losses which may
result from the negligence, dishonesty or fraud of any
service provider or of any person employed by such
service provider.
2.4.3 FIDELITY INSURANCE
(1) The BOARD OF TRUSTEES shall ensure that the FUND is
insured at its own expense against loss due to the
dishonesty or fraud of any of the officers of the FUND,
including the TRUSTEES and any other person to whom
they have delegated their functions, having the receipt or
charge of monies belonging to the FUND.
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(2) The BOARD OF TRUSTEES shall ensure that the
ADMINISTRATOR, INVESTMENT CONSULTANT,
INVESTMENT MANAGERS and other service providers
effect and maintain insurance to adequately indemnify
the FUND against losses which may occur as a result of
the negligence, dishonesty or fraud of any person
employed by such service provider.
2.4.4 INDEMNIFICATION
In the interpretation of the RULES or in the performance of any
duties imposed upon them by the RULES and the ACT, the
BOARD OF TRUSTEES and any person to whom they have
delegated any of their functions, shall not be liable for any bona
fide actions.
2.4.5 COMMITTEES
(1) The BOARD OF TRUSTEES may delegate any power that
is vested in them, on such terms and conditions as they
may specify to a sub-committee or an ad-hoc committee
of TRUSTEES, the PRINCIPAL OFFICER, a TRUSTEE or
service provider.
(2) The BOARD OF TRUSTEES may establish an ad-hoc
committee which will have a specific mandate and such
committee shall be dissolved on completion of its duties
as mandated by the BOARD OF TRUSTEES.
(3) Minutes shall be kept of all such committee meetings and
these shall be presented to the next BOARD OF
TRUSTEES meeting for noting, consideration or
ratification, as the case may be.
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(4) A majority (50% plus one) of the number of the members
of such committee shall constitute a quorum.
(5) Where the chairperson of the BOARD OF TRUSTEES is
represented on a sub-committee and is unable or
unwilling to attend a meeting of the sub-committee, the
deputy chairperson of the BOARD OF TRUSTEES shall act
in his place.
(6) Where a quorum is not present at such committee
meeting, the members present may only consider matters
on the agenda for recommendation to the BOARD OF
TRUSTEES.
2.4.6 APPOINTMENT OF OTHER PERSONS
2.4.6.1 APPOINTMENT OF THE
ADMINISTRATOR
The BOARD OF TRUSTEES may appoint an
ADMINISTRATOR to administer the FUND in terms of
the RULES and the provisions of the ACT on such
terms as the BOARD OF TRUSTEES may determine.
2.4.6.2 APPOINTMENT OF THE ACTUARY
(1) The BOARD OF TRUSTEES shall appoint an
ACTUARY, subject to the provisions of the
ACT on such terms and for such period as
they may determine.
(2) The ACTUARY shall be the valuator of the
FUND as provided for in the ACT and for the
purposes of the investigation of the financial
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condition of the FUND and reporting thereof in
compliance with the ACT.
(3) The ACTUARY shall have access to the
relevant MEMBER and PENSIONER data and
financial records to enable him to certify the
financial condition of the FUND.
2.4.6.3 APPOINTMENT OF THE AUDITOR
(1) The BOARD OF TRUSTEES shall appoint an
AUDITOR, subject to the provisions of the
ACT on such terms and for such period as
they may determine.
(2) The AUDITOR shall have access to all books,
accounts, vouchers and other documents
pertaining to the FUND and shall certify the
result of each audit in writing.
2.4.6.4 OTHER APPOINTMENTS
The BOARD OF TRUSTEES may appoint such service
providers or employees as they may deem necessary
for the proper execution of the FUND’s activities and
at such salaries or fees and on such terms and
conditions as they may decide.
2.4.7 TRUSTEE COMPENSATION
The TRUSTEES and the independent members serving on sub-
committees may be compensated and /or reimbursed in
accordance with the policies and procedures as adopted by the
BOARD OF TRUSTEES from time to time.
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2.5 AMENDMENT TO THE RULES
(1) Subject to the provisions of the ACT, the BOARD OF TRUSTEES
may amend, rescind or add to these RULES at any time. The
BOARD OF TRUSTEES will determine the EFFECTIVE DATE of any
RULE amendment.
(2) The amendment shall not be inconsistent with the ACT or other
applicable legislation and provided that any amendment to the
RULES affecting the financial basis of the FUND shall be referred
to the ACTUARY before being adopted.
(3) The FUND shall submit the amendment to the REGISTRAR for
registration.
(4) Once an amendment has been registered by the REGISTRAR, the
FUND shall submit details of such amendment at the next annual
general meeting for notification.
(5) The provisions of the RULES and any regulation made there-under
by the BOARD OF TRUSTEES shall be binding on the FUND and its
officials, the MEMBERS, the PENSIONERS, any BENEFICIARY, the
PARTICIPATING EMPLOYERS and any person who institutes a
claim against the FUND.
3. PRINCIPAL OFFICER
3.1 APPOINTMENT OF PRINCIPAL OFFICER
(1) The BOARD OF TRUSTEES shall appoint a PRINCIPAL OFFICER on
such terms and conditions as they may determine and in
accordance with the provisions of the ACT.
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(2) If the PRINCIPAL OFFICER is absent in terms of the provisions of
the ACT or is unable for any reason to discharge his duties for
more than the time period prescribed in the ACT, the BOARD OF
TRUSTEES shall appoint another person as PRINCIPAL OFFICER of
the FUND for such period of absence or incapacity. In this event,
the BOARD OF TRUSTEES shall inform the REGISTRAR thereof in
writing in terms of the provisions of the ACT.
(3) The PRINCIPAL OFFICER shall not hold the position of a TRUSTEE.
3.2 DUTIES OF THE PRINCIPAL OFFICER
The PRINCIPAL OFFICER’s task is to administer the business of the
FUND and to implement the resolutions, policies and strategies adopted
by the BOARD OF TRUSTEES.
The PRINCIPAL OFFICER shall be responsible for the statutory duties set
out in the ACT as well as the duties specified in his contract of
employment and/or as determined by the BOARD OF TRUSTEES from
time to time.
3.3 APPOINTMENT OF DEPUTY PRINCIPAL OFFICER:
(1) The BOARD OF TRUSTEES may appoint a deputy principal officer
on the terms and conditions provided for in the ACT.
(2) The PRINCIPAL OFFICER may delegate in writing to the deputy
principal officer any of his duties under the ACT and the RULES,
including the performance of his duties during any extended
absence.
(3) The BOARD OF TRUSTEES may delegate certain functions to the
deputy principal officer from time to time.
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4. GENERAL MEETINGS
5. MEMBERSHIP
5.1 ELIGIBILITY AND ADMISSION
(a) Every person who joins the SERVICE of a PARTICIPATING
EMPLOYER shall be obliged to become a MEMBER of either this
FUND or any other approved FUND in which the
PARTICIPATING EMPLOYER participates.
Membership and payment of benefits from the FUND are
suspended pending the submission of the minimum information
referred to in the RULES and the ACT.
(b) A person who becomes a MEMBER in terms of (a) above shall
produce such evidence as to the state of his health as the
INSURER underwriting the INSURED RISK BENEFITS shall
require. Such MEMBER shall be subject to such restrictions in
benefits as the INSURER shall determine.
Provided that until evidence of health, where required, has
been ascertained to the satisfaction of the INSURER, a MEMBER
shall not be eligible to full INSURED RISK BENEFITS.
(c) (i) MEMBERS under age 65 years who join the FUND and who do
not elect their choice of risk option category automatically
become category A MEMBERS, but may elect to change to
another category by giving written notice in the prescribed
format addressed to the FUND within ninety (90) days after
joining the FUND.
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(ii) Membership of category D will be closed to MEMBERS joining
the FUND from 1 October 2013, unless such MEMBER is age 50
years and over or a COUNCILLOR.
(iii) With effect from 1 July 2015, all MEMBERS in category D will be
transferred to category G except for MEMBERS who are 50
years and older on this date or who are COUNCILLORS.
Affected MEMBERS, who are not COUNCILLORS and who are
younger than 50 years of age on 1 July 2015 will have the
option to elect to remain in category D by completing the
prescribed form and by submitting a motivation to the FUND in
the prescribed format within the time frames stipulated by the
FUND.
(iv) MEMBERS between ages 65 and 75 years who join the FUND
and who do not elect their choice of risk option category
automatically become category F MEMBERS, but may elect to
change to category D by giving written notice in the prescribed
format addressed to the FUND within ninety (90) days after
joining the FUND.
(d) Each category of membership has a separate and distinct
contribution rate and level of benefits.
(e) A MEMBER may change his category of membership under the
circumstances and on such conditions as contained in the
INSURED RISK BENEFIT policies. A MEMBER must inform the
FUND in writing of any change in category within the specified
time period specified in the INSURED RISK BENEFIT policies.
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5.2 SPECIAL PROVISIONS IN RESPECT OF NEW
EMPLOYEES
(a) Subject to the provisions of the preceding RULES, a NEW
EMPLOYEE may become a MEMBER of the FUND as from the
first day of the month coinciding with or the next month
following his becoming a NEW EMPLOYEE.
(a) All the provisions of the RULES shall apply mutatis mutandis to
any NEW EMPLOYEE.
Provided that the provisions of RULES 8.3, 8.4 and 11.2
applicable to compulsory early retirement, late retirement and
redundancy and retrenchment shall not apply to such NEW
EMPLOYEE, unless specifically provided for in their contracts of
employment.
5.2A SPECIAL PROVISIONS IN RESPECT OF
COUNCILLORS
(a) Subject to the provisions of the preceding RULES, a
COUNCILLOR may become a MEMBER of the FUND as from the
first day of the month coinciding with or the next month
following his becoming eligible to do so based on the provisions
contained in his term of office arrangement.
(b) All the provisions of the RULES shall apply mutatis mutandis to
any COUNCILLOR, unless in conflict with this RULE.
(c) The provisions applicable to RULES 8.3 and 11.2 in respect of
compulsory early retirement and redundancy or retrenchment
shall not apply to a COUNCILLOR unless specifically provided
for in his term of office arrangement.
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5.3 TERMINATION
No MEMBER may terminate his membership of the FUND while he
remains in SERVICE; and his membership shall cease upon termination
of his SERVICE, unless otherwise provided for in these RULES.
5.4 TERMINATION OF MEMBERSHIP OF A MUNICIPAL
MANAGER
A MEMBER who is appointed as a MUNICIPAL MANAGER or a manager
directly accountable to the MUNICIPAL MANAGER in terms of the
Municipal Systems Act, 2000 shall have the option to terminate their
membership of the FUND on such appointment.
A MEMBER who is either appointed or re-appointed on the above basis
or a MEMBER who is appointed as a permanent employee with a new
contract of employment by a municipality will have three (3) months
from the date of such appointment or re-appointment to inform the
FUND of their decision to either terminate their membership of the
FUND or to remain as a MEMBER of the FUND.
Where a MEMBER decides to terminate their membership of the FUND,
the MEMBER will be entitled to their MEMBER’s SHARE in the FUND.
Any benefit payable in terms of this RULE may be subject to a deduction
by the FUND as allowed in terms of the RULES, the ACT and all other
applicable legislation. The FUND may for a reasonable period of time,
withhold payment of the MEMBER’s benefit, for the purpose of any
cause stipulated in Section 37D of the ACT and all other applicable
legislation.
A MEMBER who decides to terminate his membership of the FUND in
terms of this paragraph shall be allowed to elect to become a PAID-UP
MEMBER and in such instance the provisions of RULE 13.A shall apply
mutatis mutandis.
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On a MEMBER’s termination of membership of the FUND in terms of this
RULE, their INSURED RISK BENEFITS will cease, but the MEMBER shall
be entitled to elect the conversion option applicable to the INSURED
RISK BENEFITS as set out in the INSURER’s risk benefit policy.
5.5 TERMINATION OF MEMBERSHIP OF A
COUNCILLOR
Apart from the existing provisions contained in these RULES and subject
to legislation, a COUNCILLOR may terminate his membership of the
FUND on the happening of specific events:
(a) His term of office as a COUNCILLOR comes to an end in any
manner;
(b) A change in status from full-time COUNCILLOR to part-time
COUNCILLOR;
(c) The COUNCILLOR ceases contributions due to a restructuring of
his remuneration package.
In the event of a COUNCILLOR ceasing contributions and electing to
terminate his membership of the FUND in terms of this RULE, the
MEMBER’s SHARE and any benefit in the PRESERVATION PENSION
ACCOUNT subject to the provisions of RULE 20 shall be paid to him.
The exiting COUNCILLOR may elect to preserve such benefit in terms of
RULE 11.3 subject to the provisions of the Income Tax Act.
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6. FINANCIAL STRUCTURE OF THE FUND
6.1 FUND ACCOUNTS
The assets of the FUND shall be held in various accounts, to be
known as the Member Share Account, the Pensions Account, the
Processing Reserve Account, the Expense Reserve Account, the Risk
Reserve Account and the Data Reserve Account. Each account shall
be maintained separately from the others and transfers between
accounts shall take place as specified in the RULES.
Details of investment return allocations and the operation of the various
accounts are contained in a TRUSTEE GUIDELINES, PROTOCOL AND
POLICIES DOCUMENT.
6.2 COMPOSITION OF ACCOUNTS
6.2.1 Member Share Account
The Member Share Account shall comprise all the MEMBERS'
SHARES. Each MEMBER’s SHARE shall comprise:
(a) Credits
(i) TRANSFER VALUES received on behalf of the
MEMBER;
(ii) the MEMBER's contributions made in terms of
these RULES;
(iii) the nett PARTICIPATING EMPLOYER’s
contributions made on behalf of the MEMBER in
terms of these RULES after the costs associated
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with the INSURED RISK BENEFITS premiums and
the FUND expenses have been deducted;
(iv) additional voluntary contributions made in terms
of these RULES;
(v) investment earnings on the assets underlying
this particular account. Such investment
earnings shall be based on the investment yield
achieved by the particular portfolio during the
period for which the said earnings are credited to
the MEMBER SHARE ACCOUNT;
(vi) additional amounts payable by the
PARTICIPATING EMPLOYER in terms of these
RULES in respect of exiting MEMBERS;
(vii) special transfers from the Processing Reserve
Account as determined by the BOARD OF
TRUSTEES in consultation with the ACTUARY;
(viii) transfers from the Risk Reserve Account and the
Data Reserve Account in terms of RULE
6.2.4(b)(ii) representing the reinsured lump sum
death and disability benefits payable in terms of
these RULES and RULE 6.2.5(b)(i) as a result of
changes to MEMBER data.
(b) Debits
(i) adjustments to the investment earnings on the
assets underlying this particular account based
on the investment yield achieved by the
particular portfolio during the period for which
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the said earnings are debited to the MEMBER
SHARE ACCOUNT;
(ii) lump sum benefits paid to the MEMBER or
benefits transferred to an INSURER together
with any tax payable thereon;
(iii) transfers to the Pensions Account of the balance
of the MEMBER’s SHARE after the payment of
any lump sum benefit on retirement;
(iv) settlement of housing loans and the tax payable
thereon;
(v) payment of any pension interest in terms of a
valid divorce order to the non-member spouse;
(vi) payment of any amount in terms of a valid
maintenance order or court order and the tax
payable thereon, if any;
(vii) amounts transferred to the Data Reserve
Account as a result of changes to MEMBER data.
(viii) special transfers to the Processing Reserve
Account as determined by the BOARD OF
TRUSTEES in consultation with the ACTUARY.
(ix) transfers to the Living Annuity Account of the
balance of the MEMBER's SHARE after the
payment of any lump sum benefit on retirement.
(x) transfers to the Pension Account in respect of a
Category C PENSIONER in terms of RULE 9.5.2
or to the Living Annuity Account in respect of a
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LIVING ANNUITANT in terms of RULE 9.5.1 of
the balance of the death benefit after the
payment of any lump sum benefit at the
MEMBER’S death.
6.2.2 Pensions Account
The Pensions Account comprises an account in respect of all
PENSIONS in the course of payment to PENSIONERS. The
following transactions shall be recorded in this account:
(a) Credits
(i) an opening balance, as determined by the
BOARD OF TRUSTEES in consultation with the
ACTUARY;
(ii) transfers from the Member Share Account in
terms of RULES 6.2.1(b)(iii) and 6.2.1(b)(x);
(iii) transfers from the Risk Reserve Account, in
respect of the reinsured disability income
benefits payable in terms of RULE 10.2.1;
(iv) investment earnings on the assets underlying
this particular account. Such investment earnings
shall be based on the investment yield achieved
by the particular portfolio during the period for
which the said earnings are credited to the
Pensions Account;
(v) in respect of Category A PENSIONERS, such
amount paid by the PARTICIPATING EMPLOYERS
to eliminate an actuarial shortfall in the Pensions
Account, as calculated by the ACTUARY;
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(vi) transfers from the Data Reserve Account as a
result of changes to PENSIONER data;
(viii) transfers from the Risk Reserve Account in terms
of RULE 9.2(d) representing the uninsured lump
sum death after retirement benefit;
(ix) special transfers from the Processing Reserve
Account as determined by the BOARD OF
TRUSTEES in consultation with the ACTUARY;
(x) transfers from the Solvency Reserve Account in
terms of RULE 6.2.7(b)(i).
(b) Debits
(i) PENSIONS and other regular instalments payable
in terms of the RULES;
(ii) the cash value payable of any positive difference
as contemplated in RULE 9.2;
(iii) transfers to the Expense Reserve Account in
respect of PENSIONER expenses as determined
by the BOARD OF TRUSTEES in consultation with
the ACTUARY;
(iv) adjustments to the investment earnings on the
assets underlying this particular account based
on the investment yield achieved by the
particular portfolio during the period which the
said earnings are debited to the Pensions
Account;
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(v) amounts transferred to the Data Reserve
Account as a result of changes to PENSIONER
data;
(vi) special transfers to the Processing Reserve
Account as determined by the BOARD OF
TRUSTEES in consultation with the ACTUARY;
(vii) transfers to the Solvency Reserve Account as
determined by the BOARD OF TRUSTEES in
consultation with the ACTUARY.
6.2.3 Reserve Accounts
The Reserve Accounts are established to provide for
contingencies and obligations of the FUND not covered by the
Member Share Account or the Pensions Account, and
represents a record of all monies of the FUND not allocated to
those accounts. The Reserve Accounts comprise some or all of
the following components, each of which is to be determined by
the BOARD OF TRUSTEES in consultation with the ACTUARY:
6.2.3(A) Processing Reserve Account
The Processing Reserve Account has been
established to account for differences between
the actual nett FUND returns and the returns
allocated to the Member Share Account, the
Pensions Account and the various Reserve
Accounts.
The following transactions shall be recorded in
the Processing Reserve Account:
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(a) Credits
(i) any positive balance of investment
earnings not allocated to any other
account;
(ii) amounts debited to the Member
Share Account as determined by the
BOARD OF TRUSTEES in consultation
with the ACTUARY;
(iii) amounts debited to the
PRESERVATION PENSION ACCOUNT
as determined by the BOARD OF
TRUSTEES in consultation with the
ACTUARY;
(iv) transfers from the Pensions Account
as determined by the BOARD OF
TRUSTEES in consultation with the
ACTUARY;
(v) any income distributed in terms of
RULE 6.2.3(B)(b)(ii);
(vi) adjustments debited to the Risk
Reserve Account and the Data
Reserve Account;
(vii) any other income attributable to the
FUND not specified elsewhere in the
RULES.
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(b) Debits
(i) amounts transferred to the Member
Share Account as determined by the
BOARD OF TRUSTEES in consultation
with the ACTUARY;
(ii) amounts transferred to the Pensions
Account as determined by the BOARD
OF TRUSTEES in consultation with
the ACTUARY;
(iii) transfers to the Risk Reserve Account
and Data Reserve Account
representing investment returns;
(iv) amounts transferred to the
PRESERVATION PENSION ACCOUNT
as determined by the BOARD OF
TRUSTEES in consultation with the
ACTUARY;
(v) any other payments by the FUND not
specified elsewhere in the RULES;
(vi) any negative balance of investment
earnings not allocated to any other
account.
6.2.3(B) Expense Reserve Account
The Expense Reserve Account has been
established to meet the ongoing FUND expenses.
The following transactions shall be recorded in
the Expense Reserve Account:
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(a) Credits
(i) the amount determined from time to
time which is paid out of the
PARTICIPATING EMPLOYER
contributions to cover FUND
expenses;
(ii) transfers from the Pensions Account
in terms of RULE 6.2.2(b)(iii) in
respect of the PENSIONER expenses.
(iii) transfers from the Living Annuity
Account in terms of RULE 6.2.6(b)(ii)
in respect of the LIVING ANNUITANT
expenses.
(b) Debits
(i) all costs and expenses referred to in
these RULES;
(ii) at the end of each FUND YEAR, any
remaining balance whether positive
or negative shall be allocated to the
Processing Reserve Account.
6.2.4 Risk Reserve Account
The Risk Reserve Account has been established:
• to absorb the impact of an adverse experience in
the uninsured risk benefits;
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• to account for reinsurance payments to the
FUND and insured death benefits transferred to
the Member Share Account and Pensions
Account.
The following transactions shall be recorded in
the Risk Reserve Account:
(a) Credits
(i) an opening balance as determined by
the BOARD OF TRUSTEES in
consultation with the ACTUARY;
(ii) reinsurance payments made to the
FUND by an INSURER;
(iii) the amount of the INSURED RISK
BENEFIT premiums which is paid out
of the PARTICIPATING EMPLOYER
contributions together with any
refund of reinsurance premiums
which have been overpaid to an
INSURER;
(iv) investment earnings on the assets
underlying this particular account
based on the investment yield
achieved by the particular portfolio
during the period which the said
earnings are credited to the Risk
Reserve Account;
(v) special transfers from the Processing
Reserve Account as determined by
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the BOARD OF TRUSTEES in
consultation with the ACTUARY.
(vi) profit share payments made to the
FUND by an INSURER.
(b) Debits
(i) all risk benefit premiums payable to
the INSURERS’ for the reinsurance of
the INSURED RISK BENEFITS
specified in these RULES;
(ii) transfers to the Member Share
Account in terms of RULE
6.2.1(a)(viii) representing the
reinsured lump sum death and
disability benefits;
(iii) transfers to the Pensions Account in
terms of RULE 6.2.2(a)(iii)
representing the reinsured disability
income benefit in terms of RULE
10.2.1;
(iv) adjustments to the investment
earnings on the assets underlying this
particular account based on the
investment yield achieved by the
particular portfolio during the period
which the said earnings are debited
to the Risk Reserve Account;
(v) transfers to the Pensions Account in
terms of RULE 9.2(d) representing
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the uninsured lump sum death after
retirement benefit.
(vi) special transfers to the Processing
Reserve Account as determined by
the BOARD OF TRUSTEES in
consultation with the ACTUARY.
6.2.5 Data Reserve Account
The Data Reserve Account has been established to
absorb strains caused by erroneous data and other
unforeseen contingencies.
The following transactions shall be recorded in the
Data Reserve Account:
(a) Credits
(i) an opening balance as determined by
the BOARD OF TRUSTEES in
consultation with the ACTUARY;
(ii) investment earnings on the assets
underlying this particular account
based on the investment yield
achieved by the particular portfolio
during the period which the said
earnings are credited to the Data
Reserve Account;
(iii) amounts transferred from the
Member Share Account and the
Pensions Account as a result of
changes to MEMBER and
PENSIONER data.
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(iv) special transfers from the Processing
Reserve Account as determined by
the BOARD OF TRUSTEES in
consultation with the ACTUARY;
(b) Debits
(i) amounts transferred to the Member
Share Account and the Pensions
Account as a result of changes to
MEMBER and PENSIONER data;
(ii) adjustments to the investment
earnings on the assets underlying this
particular account based on the
investment yield achieved by the
particular portfolio during the period
which the said earnings are debited
to the Data Reserve Account;
(iii) special transfers to the Processing
Reserve Account as determined by
the BOARD OF TRUSTEES in
consultation with the ACTUARY.
6.2.6 Living Annuity Account
The Living Annuity Account comprises an account in
respect of LIVING ANNUITIES in the course of
payment to LIVING ANNUITANTS. The following
transaction shall be recorded in the Living Annuity
Account:
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(a) Credits
(i) transfers from the Member Share Account in
terms of RULES 6.2.1(b)(ix) and 6.2.1(b)(x);
(ii) investment earnings on the assets
underlying this particular account. Such
investment earnings shall be based on the
investment yield achieved by the particular
portfolio during the period for which the said
earnings are credited to the Living Annuity
Account.
(b) Debits
(i) a LIVING ANNUITY payable in terms of the
RULES;
(ii) transfers to the Expense Reserve Account in
respect of LIVING ANNUITANT expenses as
determined by the BOARD OF TRUSTEES in
consultation with the ACTUARY;
(iii) payments made in terms of RULES 9.4 and
9.5.1, if any.
6.2.7 Solvency Reserve Account
The FUND may establish a Solvency Reserve Account
to protect against adverse future PENSIONER
experience. The BOARD OF TRUSTEES will determine
the amount held in the Solvency Reserve Account at
each actuarial valuation, in consultation with the
ACTUARY.
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The following transaction shall be recorded in the
Solvency Reserve Account:
(a) Credits
(i) an opening balance as determined by the
BOARD OF TRUSTEES in consultation with
the ACTUARY, which shall be funded from
the Pensions Account;
(ii) amounts transferred from the Pensions
Account in terms of RULE 6.2.2(b)(vii);
(b) Debits
(i) amounts transferred to the Pensions Account
as determined by the BOARD OF TRUSTEES
in consultation with the ACTUARY.
7. CONTRIBUTIONS
7.1 MEMBER CONTRIBUTIONS
(1) Each MEMBER shall contribute an amount equal to 9% of his
PENSIONABLE REMUNERATION to the FUND.
With effect from 1 January 2015, any NEW EMPLOYEE shall on
the date of joining the FUND elect to contribute at a rate of
either 7.5% or 9% of PENSIONABLE REMUNERATION to the
FUND, subject to the provisions of the conditions of
employment applicable to the NEW EMPLOYEE with the
PARTICIPATING EMPLOYER by whom he is employed. The
elected rate of contribution shall remain in force for the
duration of his FUND membership.
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(2) A MEMBER who is appointed as a MUNICIPAL MANAGER or a
manager directly accountable to the MUNICIPAL MANAGER in
terms of the Municipal Systems Act, 2000 shall have the option
to contribute an amount equal to 7.5% of his PENSIONABLE
REMUNERATION to the FUND.
A MEMBER appointed on such basis will have three (3) months
from the date of such appointment to inform the FUND of his
decision to contribute the percentage of 7.5%. Failure to notify
the FUND within the stipulated time frame will result in the
MEMBER contributing at 9% of his PENSIONABLE
REMUNERATION.
(3) A COUNCILLOR who elects to commence membership of the
FUND shall contribute an amount equal to 7.5% of his
PENSIONABLE REMUNERATION to the FUND.
(4) Contributions are deducted monthly from the MEMBER'S
PENSIONABLE REMUNERATION by the PARTICIPATING
EMPLOYER.
(5) A MEMBER may make additional contributions to the FUND on
an annual or monthly basis in order to secure greater
retirement benefits.
7.2 PARTICIPATING EMPLOYER CONTRIBUTIONS
(1) The PARTICIPATING EMPLOYER shall upon commencement of
participation in the FUND contribute an amount monthly in
respect of each MEMBER in order to provide retirement
benefits and any INSURED RISK BENEFITS provided in terms
of these RULES, together with any FUND related expenses.
(2) The amount to be paid by each PARTICIPATING EMPLOYER
shall be equal to 18% of each MEMBER’s PENSIONABLE
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REMUNERATION.
(3) The PARTICIPATING EMPLOYER contribution shall be 19.5%
of the PENSIONABLE REMUNERATION in respect of a MEMBER
who is appointed as a MUNICIPAL MANAGER or a manager
directly accountable to the MUNICIPAL MANAGER as referred
to in the previous RULE and who has elected to contribute
MEMBER contributions of 7.5% of his PENSIONABLE
REMUNERATION.
(4) (a) With effect from 1 March 2014, the PARTICIPATING
EMPLOYER contribution in respect of a
COUNCILLOR shall be equal to 7.5% of his
PENSIONABLE REMUNERATION.
(b) Existing COUNCILLORS whose PARTICIPATING
EMPLOYER contributions are paid at the rate of
19.5% of PENSIONABLE REMUNERATION and who
elect to continue to contribute at this rate after 1
March 2014 shall be dealt with in terms of sub-rule
(c) below.
(c) Any COUNCILLOR who elects to contribute in terms
of this RULE at a rate higher than 7.5% of
PENSIONABLE REMUNERATION shall have such
contributions allocated to additional voluntary
contributions in terms of RULE 7.3.
(5) An amount as determined by the BOARD OF TRUSTEES from
time to time in consultation with the ACTUARY as is required
to meet the cost of providing any INSURED RISK BENEFITS in
terms of these RULES as well as the FUND expenses shall be
deducted from the PARTICIPATING EMPLOYER contributions
and the net balance shall be credited to the MEMBER’s SHARE
account.
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(6) The amount to be allocated to the MEMBER’s SHARE account
depends on the risk benefit option elected by the MEMBER.
(7) In addition to the PARTICIPATING EMPLOYER contributions
specifically set out above, the PARTICIPATING EMPLOYER
may make additional voluntary contributions for the
enhancement of any MEMBER’S retirement benefit.
(8) The PARTICIPATING EMPLOYER shall contribute such
amounts as determined by the BOARD OF TRUSTEES from
time to time, as may be necessary to eliminate an actuarial
shortfall in the Pensions Account, the amount of which shall
be calculated by the ACTUARY.
(9) The PARTICIPATING EMPLOYER shall advise the FUND of the
identity of the responsible person who is regularly involved in
the management of the overall financial affairs of that
employer as required by the provisions of the ACT.
The PARTICIPATING EMPLOYER shall immediately inform the
FUND of any changes to the identity of such person.
7.3 ADDITIONAL VOLUNTARY CONTRIBUTIONS
Any additional voluntary contributions made for or on behalf of any
MEMBER as set out in the preceding RULES shall be credited to the
MEMBER’s SHARE account.
7.4 PAYMENT OF CONTRIBUTIONS
(1) The MEMBER and PARTICIPATING EMPLOYER contributions
shall be paid by the PARTICIPATING EMPLOYER to the FUND in
terms of the provisions of the ACT within seven (7) days from
the end of the calendar month to which such contributions
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relate. The FUND shall pay the contributions so received into
the FUND’S banking account not later than the first (1st)
business day following the date of receipt of the contributions.
(2) Whenever a PARTICIPATING EMPLOYER fails to pay the
contributions to the FUND in terms of the provisions contained
in the ACT, such PARTICIPATING EMPLOYER shall pay to the
FUND interest as regulated by the ACT.
The FUND shall report any outstanding contributions to the
relevant parties as is required by the provisions of the ACT.
(3) The PARTICIPATING EMPLOYER is required on payment of the
contributions to provide the FUND with a schedule containing
certain minimum information as prescribed in the ACT
regarding the method of allocation of the contributions to the
individual MEMBER’s SHARE. If this information is not provided
at the time of the payment of the contributions, then it must be
provided no later than fifteen (15) days after the end of the
month in respect of which payment was made.
(4) Payment of any contributions made to the FUND contrary to the
RULES and the ACT shall be received without prejudice to the
FUND and will be subject to the provisions of the RULES and
the ACT.
(5) Notwithstanding any provision to the contrary contained in the
RULES and subject to a MEMBER’s contract of employment,
contract of SERVICE or any contractual arrangement which
exists between the MEMBER and the PARTICIPATING
EMPLOYER, if the total contributions payable to the FUND by
and in respect of a MEMER for a particular tax year are likely to
exceed the maximum monetary amount contained in the
Income Tax Act as a deduction, such MEMBER may elect to
limit the contributions payable to the FUND to the maximum
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amount specified in the Income Tax Act.
The INSURED RISK BENEFITS and the premiums payable for
such benefits shall be based on the PENSIONABLE
REMUNERATION which is derived from the total contributions
payable by and in respect of the MEMBER.
7.5 TEMPORARY ABSENCE
(1) Whenever a MEMBER is on leave either with reduced or no
remuneration, the MEMBER and the PARTICPATING EMPLOYER
shall agree on the basis of the PENSIONABLE REMUNERATION
for purposes of calculating the contributions that are payable to
the FUND.
(2) The payment of any INSURED RISK BENEFIT shall be based on
the annual PENSIONABLE REMUNERATION recorded by the
FUND in respect of the information supplied by the
PARTICIPATING EMPLOYER and on which contributions were
based. Should no premiums have been received from the
MEMBER or the PARTICIPATING EMPLOYER in respect of the
INSURED RISK BENEFITS, then such INSURED RISK BENEFITS
shall lapse in terms of the policy conditions.
8. RETIREMENT
8.1 NORMAL RETIREMENT
If a MEMBER retires from SERVICE on his NORMAL RETIREMENT DATE,
the MEMBER’s SHARE shall become payable.
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8.2 EARLY RETIREMENT
A MEMBER may retire at any time after having attained the age of 50
years and in such event the MEMBER’s SHARE shall become payable.
Any benefit payable prior to the age of 55 years shall be taxed in
accordance with the withdrawal tax tables of the applicable tax
legislation.
A MEMBER who retires from SERVICE under this RULE shall in addition
to the commutation and pension options available in terms of these
RULES be allowed to elect to become a DEFERRED MEMBER and in such
instance the provisions of RULE 13 shall apply mutatis mutandis.
8.3 COMPULSORY EARLY RETIREMENT
After a MEMBER has attained the age of 55 years he may be required by
the PARTICIPATING EMPLOYER to retire and in such an event such
MEMBER shall be granted a retirement benefit calculated as follows:
(1) the MEMBER’s SHARE;
PLUS
(2) an amount payable by the PARTICIPATING EMPLOYER
concerned (and for which it alone shall be liable to the
member), which is calculated as:
the difference between the age of 65 years and his age on his
nearest birthday, multiplied by 8%, multiplied by the MEMBER’s
SHARE;
Provided that the amount payable by the PARTICIPATING EMPLOYER in
terms of sub rule (2) hereof, may be reduced if the MEMBER agrees
thereto in writing.
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Provided further that the FUND shall only become liable to pay the
amount in terms of sub rule (2) hereof, if and when the said amount has
been paid by the PARTICIPATING EMPLOYER to the FUND, and there is
and shall be no obligation upon the FUND or the BOARD OF TRUSTEES
to take any steps to enforce payment by the PARTICIPATING
EMPLOYER concerned of the said amount.
The provisions of sub rule (2) do not apply to any NEW EMPLOYEE,
MUNICIPAL MANAGER, a manager directly accountable to the
MUNICIPAL MANAGER and whose appointment is for a fixed-term and
which is not on a permanent basis, or a COUNCILLOR and such MEMBER
shall only be entitled to receive their MEMBER’s SHARE as described in
sub rule (1) on exit due to compulsory early retirement, unless this
benefit is specifically provided for in their contract of SERVICE or terms
of engagement.
A MEMBER who retires from SERVICE under this RULE shall in addition
to the commutation and pension options available in terms of these
RULES be allowed to elect to become a DEFERRED MEMBER and in such
instance the provisions of RULE 13 shall apply mutatis mutandis.
8.4 LATE RETIREMENT
(1) A MEMBER may retire after he has reached the NORMAL
RETIREMENT DATE, subject to the consent of the
PARTICIPATING EMPLOYER. NEW EMPLOYEES or
COUNCILLORS shall retire at a date no later than the NORMAL
RETIREMENT DATE, unless an alternative date is provided for
in their contracts of SERVICE, their term of office, or an
alternative age has been agreed upon with the PARTICIPATING
EMPLOYER.
(2) A MEMBER who retires from SERVICE under this RULE shall in
addition to the commutation and pension options available in
terms of these RULES be allowed to elect to become a
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DEFERRED MEMBER and in such instance the provisions of
RULE 13 shall apply mutatis mutandis.
8.5 COMMUTATION AND PENSION OPTIONS
(1) The FUND will make RETIREMENT BENEFITS COUNSELLING
available to the MEMBER in accordance with the ANNUITY
STRATEGY.
At the request of a retiring MEMBER, the MEMBER may receive
as a lump sum benefit, up to one-third (1/3rd) of his MEMBER’s
SHARE or up to the whole thereof if allowed by income tax
legislation, which benefit shall become payable on the first day
of the month immediately following the MEMBER'S retirement
from SERVICE.
(2) At the MEMBER'S retirement, the MEMBER may request,
subject to the conditions of the ANNUITY STRATEGY, for
the whole or a part of the MEMBER's SHARE to be
transferred to the either one (1) or both of the following
options:
(a) Living Annuity Account to secure a LIVING
ANNUITY for such MEMBER. The MEMBER will then
be regarded as a LIVING ANNUITANT and the
terms and conditions as set out in RULE 8.6 will
apply; or
(b) Pensions Account to secure a PENSION for such
MEMBER. The ACTUARY will calculate the PENSION
payable from the Pensions Account.
Alternatively to the request above, a MEMBER may, prior to
retiring from the FUND, apply to the FUND for the whole or
part of the MEMBER's SHARE to be utilized to purchase an
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ANNUITY outside of the FUND, subject to the provisions of
the Income Tax Act. After a transfer has been made of such
consideration for the purchase of an ANNUITY, the FUND
shall not be liable for the payment of any further benefits in
respect of the MEMBER.
(3) When a MEMBER retires from the SERVICE of a
PARTICIPATING EMPLOYER in terms of RULE 8, such MEMBER
may elect to postpone payment of his retirement benefit and
become a DEFERRED MEMBER of the FUND. The provisions of
RULE 13 shall apply to the deferred benefit payment.
The retirement benefit shall accrue for tax purposes at the
earlier of:
(a) the date on which the MEMBER exercises his choice
regarding the manner of payment of the benefit, or
(b) the MEMBER reaches the maximum age at which the
benefit must be paid in terms of income tax legislation.
8.6 LIVING ANNUITY
(1) If a MEMBER elects a LIVING ANNUITY in terms of RULE
8.5(2), the following apply:
(a) The FUND must established a Living Annuity Account for
each LIVING ANNUITANT to which the portion of his
MEMBER's SHARE is transferred in terms of RULE
6.2.1(b)(ix).
(b) The FUND must determine the draw down rate or range
of draw down rates to be made available to LIVING
ANNUITANTS from time to time, which will be subject to
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the minimum and maximum percentage draw down rates
prescribed by income tax legislation from to time.
It is specifically provided that the FUND may, on
application by a LIVING ANNUITANT, exempt such
LIVING ANNUITANT from any limitation it may have
imposed with regard to draw down rates, subject to the
prescribed minimums and maximums.
(c) The LIVING ANNUITANT must elect the draw down rate
from the variable draw down rates contemplated in RULE
8.6(1)(b) on which his/her LIVING ANNUITY payments
will be based, equal to a percentage of the balance in
his/her Living Annuity Account as at his retirement date,
subject to the provisions of RULE 8.6(1)(e) below.
(d) A monthly LIVING ANNUITY is paid from the Living
Annuity Account to the LIVING ANNUITANT, commencing
on his/her retirement date.
(e) At the anniversary of the commencement of the LIVING
ANNUITY in each subsequent year, the LIVING
ANNUITANT may elect to adjust the draw down rate to be
applied for the next 12 months.
(f) A LIVING ANNUITANT has the option to elect the
investment portfolio(s) in which the credit balance is
his/her Living Annuity Account must be invested or where
it must be transferred to, subject to the conditions laid
down by the FUND from time to time.
Such election will be made from a list of portfolios
determined by the FUND for the purpose from time to
time and will remain there until the LIVING ANNUITANT
makes an election in terms of this RULE.
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(g) Subject to the limitation regarding draw down rates
referred to in the preceding RULES, the FUND's liability in
respect of the LIVING ANNUITANT is limited to the credit
balance in his/her Living Annuity Account at any given
time, taking into account any amounts not yet debited or
credited.
(2) The option to be paid a LIVING ANNUITY from the FUND will
only be available to a MEMBER if his/her benefit in terms of this
RULE, less the amount paid in a lump sum, is at least equal to
the minimum amount determined by the BOARD OF TRUSTEES
for this purpose from time to time.
(3) The BOARD OF TRUSTEES may determine the administrative
expenses, any applicable fees payable to consultants and other
professional advisors of the FUND, payable by a LIVING
ANNUITANT and may lay down such further conditions and
requirements relating to the administration and payment of the
LIVING ANNUITY as it may deem appropriate.
(4) A LIVING ANNUITANT may, subject to the requirements laid
down by the FUND from time to time and any transfer
requirements in terms of section 14 of the ACT, elect to apply
the credit balance in his/her Living Annuity Account to purchase
a living annuity or any other compulsory annuity outside the
FUND in his/her own name, in which case the provisions of
RULE 8.5.(2) will apply mutatis mutandis.
(5) Notwithstanding any contrary provisions contained in this RULE
8.6, the full remaining credit balance in the Living Annuity
Account in respect of a LIVING ANNUITANT may be paid to
him/her in a lump sum when such balance becomes less than
the minimum monetary amount prescribed in terms of income
tax legislation from time to time.
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8.7 GUIDANCE AND SUPPORT FOR MEMBERS
(1) The BOARD may identify one (1) or more financial advisers or
firms of financial advisers to provide financial advice to
MEMBERS, subject to RULE 8.6. Making use of such adviser or
firm of advisers is compulsory and the cost of financial advice
must be paid for by the MEMBER concerned.
(2) A financial service provider or financial adviser may only be
selected by the FUND if he/she/it is duly accredited and/or
licensed as required in terms of applicable legislation.
(3) It is specifically provided that the BOARD or the PRINCIPAL
OFFICER will not be responsible for and can therefore not be
held liable for the advice provided to or decisions made by
MEMBERS as a result of the advice provided to them by
financial advisers identified in terms of RULE 8.7(1).
9. DEATH
9.1 DEATH PRIOR TO RETIREMENT
(1) The death benefits provided to MEMBERS are reinsured with an
INSURER and are subject to the conditions imposed by the
INSURER concerned.
(2) The full terms and conditions as given in the INSURER’s policy
will apply at all times and may change from time to time.
(3) Category F participation applies to MEMBERS between the ages
of 65 and 75 years.
(4) The level of the reinsured death benefit cover may be reduced
by the BOARD OF TRUSTEES if the provision specified for each
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category in respect of the INSURED RISK BENEFIT premiums is
not sufficient to provide such benefits.
(5) Depending upon the category of membership to which a
MEMBER belongs and to the extent that he is accepted by the
INSURER for such benefits, the MEMBER will receive any of the
corresponding benefits, which benefits will be payable in
accordance with the provisions of the ACT and subject to RULE
14.4.
CATEGORY A
(a) a lump sum equal to that which can be purchased with three
percent (3%) of PENSIONABLE REMUNERATION. The three
percent (3%) of PENSIONABLE REMUNERATION includes the
cost of the lump sum disability benefit as contained in RULE
10.1; plus
(b) the MEMBER’s SHARE.
OR
CATEGORY B
(a) a lump sum equal to that which can be purchased with five
percent (5%) of PENSIONABLE REMUNERATION. The five
percent (5%) of PENSIONABLE REMUNERATION includes the
cost of the lump sum disability benefit as contained in RULE
10.1; plus
(b) the MEMBER’s SHARE.
OR
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CATEGORY C
(a) a lump sum equal to that which can be purchased with two
percent (2%) of PENSIONABLE REMUNERATION; plus
(b) the MEMBER’s SHARE.
OR
CATEGORY D
A lump sum equal to the MEMBER’s SHARE.
OR
CATEGORY E
(a) a lump sum equal to which can be purchased with 2% of
PENSIONABLE REMUNERATION; plus
(b) the MEMBER’s SHARE.
OR
CATEGORY F
This category is applicable to MEMBERS who are between ages 65 and
75 years.
(a) a lump sum equal to that which can be purchased with three
percent (3%) of PENSIONABLE REMUNERATION; plus
(b) the MEMBER’s SHARE.
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OR
CATEGORY G
(a) a lump sum equal to that which can be purchased with 0.6% of
PENSIONABLE REMUNERATION; plus
(b) the MEMBER’s SHARE.
9.2 DEATH AFTER RETIREMENT
If a PENSIONER who is in receipt of a PENSION dies after retirement
date, the following benefits will become payable:
(a) where the PENSIONER’s death occurs within sixty (60) months
after his retirement date, the PENSION payments due for the
remainder of that period;
PLUS
after the expiry of the sixty (60) month period
(b) a PENSION payable to an ELIGIBLE SPOUSE equal to 60% of
the PENSION payments payable to the PENSIONER at the time
of his death;
PLUS
(c) a PENSION payable to an ELIGIBLE CHILD equal to 10% of the
PENSION payments payable to the PENSIONER at the time of
his death.
Provided that the PENSION due to an ELIGIBLE CHILD shall be
restricted to three (3) ELIGIBLE CHILDREN. In the event of
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there being no ELIGIBLE SPOUSE, the PENSION due to each
ELIGIBLE CHILD shall be doubled.
The total benefit payable to the ELIGIBLE CHILDREN, in the
event of a PENSIONER having more than three (3) ELIGIBLE
CHILDREN, will be restricted to the benefit payable had there
been only three (3) ELIGIBLE CHILDREN. The FUND shall pay
each ELIGIBLE CHILD in equal proportions. Where more than
three (3) ELIGIBLE CHILDREN are in receipt of a PENSION and
the PENSION payable to an ELIGIBLE CHILD terminates, this
portion of the PENSION will be redistributed to the remaining
ELIGIBLE CHILDREN until a maximum of three (3) ELIGIBLE
CHILDREN are in receipt of a PENSION, thereafter there will be
no redistribution if an ELIGIBLE CHILD ceases to receive a
PENSION.
(d) after the last payment of any of the above PENSIONS or if
there are no such PENSIONS payable, an additional lump sum
as calculated by the ACTUARY equal to the excess of the
MEMBER's SHARE relative to the total benefits paid, shall
become payable in terms of the provisions of the ACT. It is
specifically provided that any additional lump sum payment
described in this RULE shall not apply to a Category B
PENSIONER who is 80 years or older or a Category C
PENSIONER who is 80 years or older.
(e) If no ELIGIBLE SPOUSE or ELIGIBLE CHILD’s PENSION is
payable and the PENSIONER dies within sixty (60) months from
the date of his actual retirement, the FUND shall pay the
equivalent value of the outstanding PENSION payments, plus
any amount payable in terms of (d) above, as calculated by the
ACTUARY, as a lump sum in terms of the provisions of the ACT.
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(f) It is specifically provided that any PENSION payable to an
ELIGIBLE CHILD in terms of this RULE is only applicable to an
ELIGIBLE CHILD of a Category A PENSIONER.
9.3 FUNERAL BENEFITS
(1) The INSURED RISK BENEFITS funeral cover which is provided
to in-service contributory MEMBERS is reinsured with an
INSURER and is subject to the conditions imposed by the
INSURER concerned.
(2) The full terms and conditions as given in the INSURER’s policy
will apply at all times and these conditions may change from
time to time.
(3) The funeral benefit will be payable by the INSURER in
accordance with the policy provisions and subject to RULE 14.4.
9.4 DEATH OF A LIVING ANNUITANT
(1) Death of a LIVING ANNUITANT who was a MEMBER of the
FUND
(a) If a LIVING ANNUITANT who was a MEMBER of the
FUND dies, the credit balance in his/her Living
Annuity Account must be paid to his/her
DEPENDANTS in terms of the provisions of the ACT,
provided that if he/she leaves an ELIGIBLE SPOUSE,
such ELIGIBLE SPOUSE may request, in writing and in
the prescribed format, that the amount allocated to
him/her, or a portion thereof, be applied to provide a
LIVING ANNUITY for his/her life, in which case the
provisions of RULE 8.6 will apply to him/her mutatis
mutandis.
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If, however, the ELIGIBLE SPOUSE so elects, a part of
or the whole of the portion that was allocated to
him/her, may be paid to him/her in a lump sum.
(b) If the LIVING ANNUITANT who was a MEMBER of the
FUND dies without leaving any DEPENDANTS, the
credit balance of his/her Living Annuity Account must
be paid to his/her estate, as required in terms of
section 37C of the ACT.
(2) Death of a LIVING ANNUITANT who was the ELIGIBLE
SPOUSE of a deceased MEMBER
If a LIVING ANNUITANT who was the ELIGIBLE SPOUSE of a
deceased MEMBER dies, the credit balance of his/her Living
Annuity Account must be paid to the person or persons
nominated by him/her to receive such credit balance in the
event of his/her death, in the format prescribed by the FUND
from time to time, failing which, such credit balance must be
paid to his/her estate.
9.5 SPECIAL CONDITIONS AT THE MEMBER’S
DEATH
If the MEMBER dies and he leaves an ELIGIBLE SPOUSE, such ELIGIBLE
SPOUSE may request, in writing and in the format prescribed by the
BOARD OF TRUSTEES, that the total of or any portion of the lump sum
benefit to which the ELIGIBLE SPOUSE is entitled in terms of the
provisions of RULES 9.1(5), 9.2(a) and 9.2(d), be transferred to one of
the following:
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9.5.1 the Living Annuity Account to secure a LIVING ANNUITY for
such ELIGIBLE SPOUSE. The ELIGIBLE SPOUSE will then be
regarded as a LIVING ANNUITANT and the terms and
conditions as out in RULE 8.6 will apply mutatis mutandis; or
9.5.2 the Pensions Account to secure a PENSION payable by the
FUND for such ELIGIBLE SPOUSE. Such ELIGIBLE SPOUSE will
then be regarded as a Category C PENSIONER and the terms
and conditions as set out in Rule 14.11 will apply mutatis
mutandis. The ACTUARY will calculate the PENSION payable by
the FUND from the Pensions Account.
10. DISABILITY BENEFITS
10.1 LUMPSUM DISABILITY BENEFITS
(1) The lump sum disability benefits provided to MEMBERS are
reinsured with an INSURER, and are subject to the conditions
imposed by the INSURER concerned.
(2) The full terms and conditions as given in the INSURER’s policy
will apply at all times and may change from time to time.
(3) In terms of policy conditions, the insured lump sum disability
benefit shall reduce from age 55 years.
(4) The level of the reinsured disability benefit cover may be
reduced by the BOARD OF TRUSTEES if the provision specified
for each category in respect of the INSURED RISK BENEFIT
premiums is not sufficient to provide such benefits.
(5) A MEMBER eligible to lump sum disability benefits shall be
deemed an ill-health retiree.
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(6) Depending upon the category of membership to which a
MEMBER belongs and to the extent that he is accepted by the
INSURER for such benefits, the MEMBER will receive the
corresponding benefits subject to the provisions of RULE 14.4.
CATEGORY A
(a) a lump sum equal to that which can be purchased with three
percent (3%) of PENSIONABLE REMUNERATION. The three
percent (3%) of PENSIONABLE REMUNERATION includes the
cost of the lump sum death benefit as contained in RULE 9.1,
plus
(b) the MEMBER’s SHARE.
OR
CATEGORY B
(a) a lump sum equal to that which can be purchased with five (5)
percent (5%) of PENSIONABLE REMUNERATION. The five
percent (5%) of PENSIONABLE REMUNERATION includes the
cost of the lump sum death benefit as contained in RULE 9.1,
plus
(b) the MEMBER’s SHARE.
OR
CATEGORY C
A lump sum equal to the MEMBER’s SHARE.
OR
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CATEGORY D
A lump sum equal to the MEMBER’s SHARE.
OR
CATEGORY E
This category does not provide any INSURED RISK BENEFIT lump sum
disability benefit or payment of the MEMBER’s SHARE. The income
disability benefit applicable to this category is contained in RULE 10.2.2.
OR
CATEGORY F
A lump sum equal to the MEMBER’s SHARE.
OR
CATEGORY G
a lump sum equal to the MEMBER’s SHARE.
10.2 INCOME DISABILITY BENEFIT
The monthly income disability benefits provided to MEMBERS are
reinsured with an INSURER, and are subject to the conditions imposed
by the INSURER concerned. The full terms and conditions as given in
the INSURER’s policy will apply at all times and may change from time
to time. The payment of this benefit is subject to the provisions of RULE
14.4.
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10.2.1 INCOME DISABILITY BENEFITS UP TO 30
JUNE 2002
The income disability benefits provided to MEMBERS who
elected category A membership prior to 30 June 2002, are
reinsured with an INSURER and are subject to the terms and
conditions imposed by the INSURER concerned. This income
disability benefit was terminated with effect from 30 June
2002 and the FUND no longer provided income disability
benefits to MEMBERS. The purpose of this RULE is to
provide direction for those MEMBERS in receipt of a monthly
income disability benefit under this old dispensation.
(a) In the event that a MEMBER is accepted by the
INSURER for such monthly income disability benefit,
a PENSION equal to the EXPECTED PENSION shall
be paid to him. Such PENSION shall be payable
from the first day of the month coinciding with or
immediately following the day he left the SERVICE
of the PARTICIPATING EMPLOYER.
(b) Should the EXPECTED PENSION described in sub-
paragraph (a) above be less than 50% of the
MEMBER’s PENSIONABLE REMUNERATION at the
date of becoming disabled, the FUND would have
granted the MEMBER an additional PENSION such
that the total PENSION would equal 50% of the
MEMBER’s PENSIONABLE REMUNERATION at the
time, provided that in the case of a MEMBER who is
disabled as a result of one of the specified
conditions stipulated below, the FUND would have
granted the MEMBER an additional PENSION such
that the total PENSION would equal 75% of the
MEMBER’s PENSIONABLE REMUNERATION at the
time. The specified conditions are as follows:
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(i) A traumatic bodily injury which was
accidental, violent, external, visible
and resulted in immediate
hospitalisation with specialist
treatment by a physician;
(ii) Cancer;
(iii) Stroke;
(iv) Central nervous system disorders
which are organic in origin and
severely degenerative;
(v) Kidney failure requiring regular renal
dialysis;
(vi) Hepatic failure;
(vii) Blindness;
(viii) Disablement from activities of daily
living (assessment criteria available
on request from the INSURER);
(ix) Cognitive disablement which is
irreversible and organic in origin to
such an extent that the MEMBER
requires continual personal assistance
or direct supervision;
(x) Chronic obstructive pulmonary
disease;
(xi) Connective tissue disorders, such as
rheumatoid arthritis;
(xii) Coronary artery disease, heart valve
disease or cardiomyopathy.
(c) If, in the opinion of the BOARD OF TRUSTEES, such
accident, disease or illness was caused by the
MEMBER’s own action or neglect, the FUND may
reduce or exclude the benefits provided for in this
RULE.
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(d) The INSURER shall call for and obtain such medical
evidence as they may require in determining the
extent of continuous disablement of the PENSIONER
who is in receipt of a PENSION in terms of this
RULE. If, in the opinion of the INSURER, the
PENSIONER is no longer disabled as contemplated
above, any additional amount granted in terms of
sub-paragraph (b) above shall cease and the
PENSION payable to the PENSIONER shall be
reduced to an amount equal to his EXPECTED
PENSION calculated together with PENSION
increases from the date of disability.
(e) Should such PENSIONER die before reaching his
NORMAL RETIREMENT AGE, the death benefit in
terms of RULE 9.3 shall be payable.
(f) On attainment of his NORMAL RETIREMENT AGE,
the PENSIONER’s benefit in terms of this RULE shall
be reduced to his current EXPECTED PENSION,
taking into account any PENSION increases granted
from the date of disability unless the PENSIONER is
already in receipt of his EXPECTED PENSION, then
such PENSION shall continue to be paid on that
basis.
10.2.2 INCOME DISABILITY BENEFITS WITH
EFFECT FROM 1 OCTOBER 2009
(1) With effect from 1 October 2009, the FUND introduced
a new risk benefit category E.
(2) The risk benefits provided under category E are
reinsured with an INSURER and are subject to the
conditions imposed by the INSURER concerned. The
full terms and conditions as given in the INSURER’s
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policy will apply at all times and may change from time
to time.
(3) Depending upon the category of membership to which
a MEMBER belongs and to the extent that he is
accepted by the INSURER for such benefits, the
MEMBER will receive the corresponding benefits
subject to the provisions of RULE 14.4.
(4) In the event that a MEMBER is accepted by the
INSURER for such monthly INCOME CONTINUATION
BENEFIT as described in the INSURED RISK BENEFIT
policy, contributions in terms of RULE 7 will be paid to
the FUND for and on behalf of the MEMBER by the
INSURER in terms of these RULES and the INSURED
RISK BENEFIT policy. Such contributions shall be
credited to the MEMBER’s SHARE account.
(5) Such MEMBER shall not be entitled to exit from the
FUND and will not be paid the MEMBER’s SHARE or
any balance in the PRESERVATION PENSION
ACCOUNT once the INCOME CONTINUATION BENEFIT
is approved by the INSURER, except under the
following circumstances:
(i) the MEMBER reaches age 65 years;
(ii) the MEMBER dies;
(iii) the INSURER stops payment of the monthly
INCOME CONTINUATION BENEFIT and the
MEMBER does not return to work at the same
PARTICIPATING EMPLOYER by whom he was
employed at the date of disability.
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(6) The INSURER shall call for medical evidence from time
to time in order to determine the extent of continuous
disablement of the MEMBER. If in the opinion of the
INSURER, the MEMBER is no longer disabled in terms
of the policy conditions and the INSURER stops
payment of the monthly INCOME CONTINUATION
BENEFIT, the MEMBER shall be entitled to a benefit in
terms of RULE 10.3 provided that the MEMBER does
not return to work at the same PARTICIPATING
EMPLOYER by whom he was employed at the date of
disability.
(7) Should the MEMBER die prior to attaining 65 years of
age, the death benefit in terms of RULE 9.1 shall
become payable.
(8) On attainment of the age of 65 years, the monthly
INCOME CONTINUATION BENEFIT shall cease to be
paid by the INSURER and the MEMBER shall be entitled
to retire in terms of RULE 8 and the MEMBER’s SHARE
shall become payable.
10.3 NON INSURED RISK BENEFITS
A MEMBER who on the written advice of the PARTICIPATING EMPLOYER
by whom he is employed is declared totally disabled, the
PARTICIPATING EMPLOYER having followed due process as is required
in terms of the Labour Relations Act, 1995, as amended from time to
time, in reaching that conclusion, will receive his MEMBER’s SHARE.
Provided that such MEMBER is not eligible to receive an INSURED RISK
BENEFIT, the MEMBER’s SHARE as above shall be deemed an ill-health
retirement benefit.
10.4 DREAD DISEASE BENEFIT
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(1) The INSURED RISK BENEFITS dread disease cover is provided
to MEMBERS in categories A, B, C and E and is subject to the
conditions imposed by the INSURER concerned.
(2) The full terms and conditions as given in the INSURER’s policy
will apply at all times and these conditions may change from
time to time.
(3) The payment of this benefit by the INSURER is subject to the
provisions of RULE 14.4.
11. WITHDRAWAL
11.1 WITHDRAWAL BENEFIT
If a MEMBER leaves SERVICE and is not entitled to benefits under any
other RULE, he shall, subject to first receiving RETIREMENT BENEFITS
COUNSELLING, become entitled to his MEMBER's SHARE; provided that
a MEMBER will automatically become a PAID-UP MEMBER in terms of
the provisions of RULE 13.A until such time as the FUND is in receipt of
the MEMBER’S completed withdrawal form in the manner as prescribed
in terms of RULE 11.4 instructing the FUND which option he chooses.
11.2 REDUNDANCY OR RETRENCHMENT
If a MEMBER’s SERVICE is terminated owing to a reduction in, or
reorganisation of staff, or to the abolition of his post, or in order to
effect improvements in efficiency or organisation (which includes
termination of SERVICE in order to establish equity in the workplace or
to implement affirmative action programmes) or as the result of his
having been declared redundant or having been retrenched, on receipt
of advice from the PARTICIPATING EMPLOYER and subject to receiving
RETIREMENT BENEFITS COUNSELLING, he shall become entitled to a
lump sum benefit comprising the following:
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(1) the MEMBER’s SHARE;
PLUS
(2) an amount payable by the PARTICIPATING EMPLOYER
concerned (and for which it alone shall be liable to the
member), being the lesser of-
(a) the difference between the age of 65 years and his
age on his nearest birthday, multiplied by 8%,
multiplied by the MEMBER’s SHARE; or
(b) 100% of the MEMBER’s SHARE.
Provided that the amount payable by the PARTICIPATING
EMPLOYER in terms of sub rule (2) hereof, may be reduced if
the MEMBER agrees thereto in writing.
Provided further that the FUND shall only become liable to pay
the amount in terms of sub rule (2) hereof, if and when the
said amount has been paid by the PARTICIPATING EMPLOYER
to the FUND, and there is and shall be no obligation upon the
FUND or the BOARD OF TRUSTEES to take any steps to enforce
payment by the PARTICIPATING EMPLOYER concerned of the
said amount.
The provisions of sub rule (2) do not apply to a NEW
EMPLOYEE, MUNICIPAL MANAGER, a manager directly
accountable to the MUNICIPAL MANAGER and whose
appointment is for a fixed term and which is not on a permanent
basis, or a COUNCILLOR unless specifically provided for in his
contract of SERVICE or terms of engagement. A MEMBER
who is not entitled to the provisions of sub rule (2), may, subject
to receiving RETIREMENT BENEFITS COUNSELLING, elect to
receive his MEMBER’s SHARE as described in sub rule (1).
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Provided further that a MEMBER will automatically become a PAID-UP
MEMBER in terms of the provisions of RULE 13.A until such time as the
FUND is in receipt of the MEMBER’S completed withdrawal form in the
manner prescribed in terms of RULE 11.4 instructing the FUND which
option he chooses.
11.3 PRESERVATION BENEFIT
(1) A MEMBER may elect to preserve his benefit entitlement in
terms of RULES 11.1 and 11.2, subject to first receiving
RETIREMENT BENEFITS COUNSELLING.
(2) A MEMBER who preserves his benefit in terms of (1) above may
elect to preserve such benefit :
(a) by transferring such amount to an APPROVED
RETIREMENT ANNUITY FUND of his choice or to an
APPROVED PROVIDENT PRESERVATION FUND in
which the PARTICIPATING EMPLOYER has agreed to
participate;
or
(b) by transferring such amount to an approved pension or
provident fund which is operated for the benefit of
employees of his new employer with whom the
withdrawing MEMBER is taking up employment;
or
(c) by electing to become a PAID-MEMBER of the FUND in
terms of RULE 13A.
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11.4 ELECTION NOTIFICATION
The FUND must receive an election notification of how the withdrawal
benefit must be paid and/or preserved in terms of RULES 11.1, 11.2 and
11.3. Such election notification to the FUND must be in writing by the
PARTICIPATING EMPLOYER or the PAID-UP MEMBER and must include
details of the option(s) selected. The notification will only be regarded
as having been given once all the required and fully completed
documents are received by the ADMINISTRATOR.
Once any portion of the PAID-UP MEMBER'S withdrawal benefit has
been so paid in cash or transferred, the PAID-UP MEMBER shall have no
further claim against the FUND in respect of the amount paid or
transferred.
12. TRANSFERS FROM OR TO OTHER FUNDS
The BOARD OF TRUSTEES may, after consultation with the ACTUARY, approve
special arrangements for the preservation of transferred pension rights, which rights
may make provision for the following:
(1) In respect of a person or a group of individuals who were members of a
PREVIOUS SCHEME and who become MEMBERS of this FUND:
(a) the FUND may allow members from other registered funds to
transfer to the FUND, subject to conditions as determined by the
BOARD OF TRUSTEES from time to time;
(b) such transfer of business shall accord with the BOARD OF
TRUSTEES’ conditions as determined from time to time and shall
be done in accordance with the provisions of the ACT.
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(2) For the purpose of calculating the benefits of a MEMBER who was a
member of a PREVIOUS SCHEME and who transferred his benefits to the
FUND:
(a) the amount transferred to the FUND shall be deemed to form part
of his MEMBER’s SHARE;
(b) the revised pensionable service date of the MEMBER will be
calculated by the ACTUARY.
The paid-up membership certificate, as prescribed by the FSCA, in respect
of such amount transferred to the FUND must be provided to the FUND
before or at the time of transfer.
(3) Special transferability in terms of Freedom of Association
The FUND may at the request or with the approval of the MEMBER, allow
MEMBERS to transfer to and / or from other municipal retirement funds
subject to the following conditions:
(a) any conditions laid down by the FUND;
(b) approval by the BOARD OF TRUSTEES;
(c) MEMBERS may not be transferred against their will and no transfer
shall take place without MEMBERS having completed the relevant
administration form;
(d) the provisions of the ACT are to be complied with.
(3A) Transfer of membership to an APPROVED RETIREMENT ANNUITY FUND
During the Freedom of Association period between 1 May 1996 and 31
December 1998, the FUND allowed MEMBERS to commence making
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contributions to an APPROVED RETIREMENT ANNUITY FUND, subject to
the following conditions:
(a) approval by the BOARD OF TRUSTEES, subject to such further
conditions as they may specify;
(b) the provisions of any relevant legislation, including Provincial
Proclamations;
(c) such MEMBERS are not entitled to transfer their MEMBER’s SHARE
in the FUND to the APPROVED RETIREMENT ANNUITY FUND
where contributions are being made;
(d) in these circumstances, the MEMBER’s SHARE shall remain in the
FUND and the MEMBER will be regarded as a PAID-UP MEMBER.
(4) Transfers out of the FUND
MEMBERS who are transferred to a new employer or municipality, not
associated with the FUND, may be required, as a result of their new
conditions of service, to terminate their membership of this FUND and join
a fund that is associated with their new employer. Subject to the provisions
of the transfer agreement and transfer arrangements between the old and
new employers, the MEMBER may elect at any time and subject to
receiving RETIREMENT BENEFITS COUNSELLING to:
(a) receive his MEMBER’s SHARE as a cash lump sum.
(b) transfer his MEMBER’s SHARE to the retirement fund of the new
employer.
(c) leave his MEMBER’s SHARE as at the date of transfer in the FUND
as a deferred benefit and he will then be regarded as a PAID-UP
MEMBER.
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13. DEFERRED MEMBERS
A MEMBER who becomes entitled to a benefit in terms of RULE 8 may elect to defer
his retirement benefit in the FUND and as such become a DEFERRED MEMBER.
The following provisions shall apply to DEFERRED MEMBERS:
(a) The MEMBER’s SHARE will be adjusted with the investment earnings on
the assets underlying the particular account based on the investment
yield achieved by the particular portfolio during the period which the said
earnings are credited or debited to the particular account in terms of
RULE 6.2.1;
(b) A portion of the cost of the FUND expenses as determined from time to
time by the BOARD OF TRUSTEES shall be deducted from the MEMBER’s
SHARE;
(c) All INSURED RISK BENEFITS, as provided for in the RULES, will cease
from the date that the MEMBER becomes a DEFERRED MEMBER and the
DEFERRED MEMBER will have no further claim against the FUND or
INSURER, for any such benefit;
(d) No further contributions will be payable to the FUND by the DEFERRED
MEMBER or the PARTICIPATING EMPLOYER, from the date that the
MEMBER becomes a DEFERRED MEMBER.
(e) The deferred retirement benefit in terms of this RULE 13 will become
payable upon receipt by the FUND of the DEFERRED MEMBER’S
completed retirement form in terms of the provisions of RULE 13(k). The
deferred retirement benefit payable in terms of this RULE 13(e) will be
equal to the DEFERRED MEMBER’S MEMBER’s SHARE and will be paid in
accordance with the provisions of RULE 8.
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(f) On the death of a DEFERRED MEMBER, the MEMBER’S SHARE shall be
payable in terms of RULE 9.1 and the provisions of Section 37C of the
ACT will apply.
(g)
(h)
(i) If applicable, the DEFERRED MEMBER may commute a maximum of one-
third (1/3rd) of the value in the PRESERVATION PENSION ACCOUNT,
subject to the provisions of the applicable tax laws at the date of
retirement. The DEFERRED MEMBER shall be required to purchase an
ANNUITY with an INSURER with the balance of the value of the
PRESERVATION PENSION ACCOUNT, subject to the conditions contained
in RULE 20.3.5.
(j)
(k) The FUND must receive an election notification of how the deferred
retirement benefit must be paid and/or preserved in terms of RULE 8.
Such election notification to the FUND must be in writing by the
PARTICIPATING EMPLOYER or the DEFERRED MEMBER and must include
details of the option(s) selected. The notification will only be regarded as
having been given once all the required and fully completed documents
are received by the ADMINISTRATOR.
Once any portion of the DEFERRED MEMBER'S retirement benefit has
been so paid in cash or transferred, the DEFERRED MEMBER shall have
no further claim against the FUND in respect of the amount paid or
transferred.
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13.A PAID-UP MEMBERS
The following provisions shall apply to PAID-UP MEMBERS:
(a) The PAID-UP MEMBER’S MEMBER’s SHARE will be adjusted with the
investment earnings on the assets underlying the particular account based
on the investment yield achieved by the particular portfolio during the
period which the said earnings are credited or debited to the particular
account in terms of RULE 6.2.1.
(b) A portion of the cost of the FUND expenses as determined from time to
time by the BOARD OF TRUSTEES shall be deducted from the PAID-UP
MEMBER’S MEMBER’s SHARE.
(c) All INSURED RISK BENEFITS, as provided for in the RULES, will cease from
the date that the MEMBER becomes a PAID-UP MEMBER and the PAID-UP
MEMBER will have no further claim against the FUND or INSURER, for any
such benefit.
(d) No further contributions will be payable to the FUND by the PAID-UP
MEMBER or the PARTICIPATING EMPLOYER, from the date that the
MEMBER becomes a PAID-UP MEMBER unless the PAID-UP MEMBER is
again employed by the PARTICIPATING EMPLOYER before the NORMAL
RETIREMENT DATE and again becomes an in-service MEMBER.
(e) The PAID-UP MEMBER'S withdrawal benefit will be invested in terms of the
INVESTMENT POLICY STATEMENT.
(f) If the PAID-UP MEMBER dies after his leaving the SERVICE of the
PARTICIPATING EMPLOYER but prior to the deferred withdrawal benefit
becoming payable, a benefit equal to the PAID-UP MEMBER’S MEMBER's
SHARE will be paid in accordance with the provisions of Section 37C of the
ACT. The INSURED RISK BENEFIT will not become payable.
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(g) The deferred withdrawal benefit payable in terms of this RULE 13.A will be
payable on the NORMAL RETIREMENT DATE in terms of the provisions of
RULE 8; provided that the PAID-UP MEMBER may elect to become a
DEFERRED MEMBER in terms of the provisions of RULE 13. The PAID-UP
MEMBER may however request payment of the deferred withdrawal benefit
at any time before the NORMAL RETIREMENT AGE.
(h) The FUND will make RETIREMENT BENEFITS COUNSELLING available to
the PAID-UP MEMBER.
(i) The provisions of these RULES regarding the regular repayment of a
housing loan will continue to apply to a PAID-UP MEMBER. Failure to make
regular repayments will result in the Financial Institution requesting full
repayment of the outstanding home loan from the MEMBER's SHARE
and/or PRESERVATION PENSION ACCOUNT. This will be taxed in
accordance with legislation.
14. MISCELLANEOUS PROVISIONS REGARDING
BENEFITS
14.1 PAYMENT OF BENEFITS
(1) Amounts payable in respect of a MEMBER or PENSIONER during
his lifetime shall be paid to such MEMBER or PENSIONER.
(2) The value of any benefit payable to an exiting MEMBER shall
not be less than the MINIMUM INDIVIDUAL RESERVE.
(3) Where a MEMBER holds monies in the PRESERVATION
PENSION ACCOUNT, such benefit shall be paid to the MEMBER
on exit in addition to any other benefit which is payable in
terms of these RULES.
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(4) The FUND shall be entitled to request proof to their satisfaction
as to the identity and right of any MEMBER, PENSIONER or
BENEFICIARY to any benefit before payment of any benefit is
made to such person.
(5) Whenever a benefit is payable to any MEMBER, PENSIONER or
BENEFICIARY, such benefit shall be paid by means of electronic
transfer into the account of that person with a bank registered
in terms of the Banks Act, 1990 (Act No 94 of 1990), as
amended, or if no such account exists, or if the person has not
provided the particulars thereof to the FUND, such benefit shall
be paid by means of a cheque posted to such MEMBER’s,
PENSIONER’s or BENEFICIARY's postal address. The payment
of a benefit by cheque will be in full and final settlement and
the person thereby indemnifies the FUND against any further
claims. The MEMBER, PENSIONER or BENEFICIARY shall inform
the FUND in writing of the particulars of his bank account
and/or his postal address.
(6) Any benefit payable in terms of these RULES shall be subject to
taxation in terms of the provisions of the Income Tax Act that is
applicable to such MEMBER on exit.
14.2 PAYMENT OTHER THAN SPECIFIED
Notwithstanding a contrary provision contained in the RULES, if the
FUND, in its absolute discretion, for some good and sufficient reason
deems it not advisable to make payment of a benefit in the manner
elsewhere provided for in these RULES, they may pay the benefit in one
of the following ways:
(1) Where a BENEFICIARY is a minor, to the curator or guardian of
such BENEFICIARY, for the benefit of such BENEFICIARY, in the
case of benefits other than death benefits; and/or
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(2) Where the court has appointed a curator bonis for a
BENEFICIARY, to the curator bonis for the benefit of such
BENEFICIARY.
(3) A decision of the FUND in terms of this RULE may be varied by
it from time to time in its sole discretion.
(4) A payment made in terms hereof shall not be made in a
manner which conflicts with the provisions of the ACT.
14.3 PARTICIPATING EMPLOYER’S NOTIFICATION OF
REASONS FOR TERMINATION OF SERVICE
For the purposes of establishing the benefit to which the MEMBER is
entitled in terms of these RULES the FUND shall be entitled to act
without further enquiry or investigation on the particulars furnished to
them by the PARTICIPATING EMPLOYER concerned of the reason for
the MEMBER’s termination of SERVICE. The PARTICIPATING EMPLOYER
indemnifies the FUND against any claims instituted against the FUND as
a result of the FUND so acting.
14.4 BENEFIT INSURANCE
(1) The BOARD OF TRUSTEES may reinsure the benefits provided
by the FUND in terms of these RULES with an INSURER.
(2) The said benefits shall be subject to the conditions imposed by
the INSURER concerned and each MEMBER shall only be
entitled to the said benefits to the extent that he is accepted by
the INSURER for such benefits.
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14.5 CESSATION OF INSURED RISK BENEFITS
On a MEMBER’s exit from SERVICE his INSURED RISK BENEFITS will
cease but he shall be entitled to elect the risk benefit conversion option
as set out in Rule 14.6.
14.6 CONVERSION OPTION: RISK BENEFITS
The MEMBER’s INSURED RISK BENEFITS cease on exit from the FUND
or on becoming a PENSIONER, DEFERRED MEMBER or a PAID-UP
MEMBER. A MEMBER may convert all or part of this cover to an
individual policy with the INSURER, subject to the policy conditions as
set out in the INSURER’s policy from time to time.
14.7 BENEFITS NON-ASSIGNABLE
All benefits and rights to benefits in terms of these RULES are subject to
the prohibitions as to reduction, cession and attachment as contained in
the ACT.
14.8 DEDUCTIONS FROM BENEFITS
(1) The FUND may, subject to the provisions of the ACT deduct
certain amounts from the benefit to which a MEMBER or
BENEFICIARY is entitled in terms of the RULES or deemed to be
entitled as contemplated in the ACT.
(2) The FUND shall pay the amount so deducted to the relevant
party provided that the total amount so deducted or withheld
shall not exceed the amount which may be taken as a lump
sum by the MEMBER or the BENEFICIARY in terms of the FUND
RULES and legislation.
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(3) In order to give effect to the provisions of this RULE and the
ACT, the FUND may exercise the right to commutation as
provided for in terms of RULE 8.5 on behalf of the MEMBER.
(4) Certain deductions which the FUND is entitled to deduct in
terms of the ACT are:
(a) any housing loan surety granted by the FUND;
(b) compensation (including any legal costs recoverable
from the MEMBER) in respect of any damage caused to
the PARTICIPATING EMPLOYER as a result of any
theft, dishonesty, fraud or misconduct by the MEMBER
and in respect of which the MEMBER has in writing
admitted liability to the PARTICIPATING EMPLOYER, or
judgement has been obtained against the MEMBER in
any court of law.
(c) payment of a divorce pension interest to the non-
member spouse in terms of a valid divorce order;
(d) payment of maintenance in terms of a valid court
order;
(e) tax owing to the SA Revenue Services.
(5) The FUND may for a reasonable period of time withhold the
payment of a benefit to a MEMBER pending a judgment or
acknowledgement of liability provided that the FUND may only
withhold an amount up to the value of the PARTICIPATING
EMPLOYER’s claim.
(6) In order for the benefit to be withheld the PARTICIPATING
EMPLOYER must have established a prima facie case against
the MEMBER.
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(7) The FUND must be satisfied that the PARTICIPATING
EMPLOYER is not at any stage of the proceedings responsible
for any undue delays in the institution of the prosecution
proceedings.
(8) Once the proceedings have been settled or withdrawn any
benefit to which the MEMBER is entitled shall be paid.
(9) The MEMBER may choose to have the benefit (or amount of
claim by the PARTICIPATING EMPLOYER), disinvested from the
FUND’s investments and separately invest this with the FUND’s
banker, whereby such benefit will be protected from market
fluctuations.
14.9 INTEREST ON LATE PAYMENT OF BENEFITS
(1) Benefits payable to a MEMBER, PENSIONER or BENEFICIARY
shall be due and payable the day after the date of the exit
event.
(2) Interest shall become due and payable from the date that the
benefit has been disinvested from the market. The disinvested
benefit shall earn interest at the FUND’s bank account current
rate from date of deposit to date of payment.
(3) The payment of any interest on the late payment of benefits
shall not form part of the benefit, but shall be deemed to be
interest in the hands of the BENEFICIARY and shall be subject
to the applicable tax laws at the time of the payment.
14.10 UNCLAIMED BENEFITS
(1) If a benefit is not paid to a MEMBER or a BENEFICIARY thereto
entitled within twenty-four (24) months as specified in the
applicable legislation after such benefit became legally due and
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payable such benefit shall be transferred to an APPROVED
PENSION PRESERVATION FUND, as approved by the BOARD
OF TRUSTEES from time to time and which has been set up for
the purpose of receiving UNCLAIMED BENEFITS.
(2) Where a MEMBER or a BENEFICIARY has not been traced by
the FUND and such UNCLAIMED BENEFIT has not been
transferred to an APPROVED PENSION PRESERVATION FUND
and such MEMBER or BENEFICIARY subsequently claims this
benefit, the FUND may pay the benefit from the reserve
account as described in RULE 6.2.5, should such benefit no
longer be held by the FUND in the Member Share Account
described in RULE 6.2.1. The FUND is required to have
adequate proof of existence of the MEMBER or BENEFICIARY
and have sufficient record of the non-payment of a previous
benefit to such person.
(3) The amount of the UNCLAIMED BENEFIT shall consist of the
MEMBER’s SHARE, together with any interest in terms of RULE
14.9(2) as at the date of transfer to an APPROVED PENSION
PRESERVATION FUND or date of payment to the MEMBER or
BENEFICIARY, less the costs indicated below.
(4) If any costs are incurred as a consequence of the FUND tracing
the MEMBER or any potential BENEFICIARY, or in order to give
effect to the provisions of section 37C of the ACT, any such
reasonable costs may be debited to the MEMBER’s SHARE,
provided sufficient funds exist.
14.11 PAYMENT OF PENSIONS
(1) PENSIONS are payable monthly.
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(2) The first PENSION payment shall be due at the end of the
calendar month following the month in which a PENSIONER has
retired or died.
(3) The last PENSION payment shall, subject to the provisions of
RULE 9.3, be due at the end of the calendar month in which:
(a) a PENSIONER dies,
(b) the ELIGIBLE SPOUSE dies in the case of an ELIGIBLE
SPOUSE's PENSION,
(c) an ELIGIBLE CHILD ceases being an ELIGIBLE CHILD.
(4) Whenever a PENSION commences, is changed or terminates,
payments due at the end of the month concerned will be based
on the circumstances applying immediately prior to such
commencement, change or termination.
(5) The FUND shall be entitled to request a certificate of existence
to be provided from time to time in respect of PENSIONERS.
When a certificate of existence is not returned by the due date,
the FUND shall be entitled to suspend the PENSION and the
PENSION shall be retrospectively reinstated once satisfactory
proof of existence has been received by the FUND.
The FUND shall regularly test the validity of the PENSIONER
data base with the Department of Home Affairs. When the
Department of Home Affairs has recorded a person as
deceased, the FUND shall be entitled to suspend the PENSION
and the PENSION shall be retrospectively reinstated once
satisfactory proof of existence has been received by the FUND.
Where any PENSIONS have been overpaid due to the non
notification of the PENSIONER’s death, such overpaid
PENSIONS shall be recovered from the PENSIONER’s estate.
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(6) The FUND shall be entitled to call for proof of full-time
education in respect of an ELIGIBLE CHILD who is 18 years and
older. The PENSION may be suspended by the FUND until such
satisfactory proof of study is received at which stage the
PENSION will be retrospectively reinstated.
14.12 PENSION ADJUSTMENTS
(1) PENSIONS payable to Category A PENSIONERS may be
increased from time to time at a rate determined by the
BOARD OF TRUSTEES after consultation with the ACTUARY
and in accordance with the PENSIONER increase policy and
the provisions of the ACT.
(2) PENSIONS payable to Category B PENSIONERS or to
Category C PENSIONERS may be increased or decreased
from time to time as determined by the BOARD OF
TRUSTEES after consultation with the ACTUARY and in
accordance with the ANNUITY STRATEGY.
(3) The BOARD OF TRUSTEES may, after consultation with the
ACTUARY, approve the payment of an ad-hoc bonus to
PENSIONERS, subject to the financial soundness of the
Pensions Account.
14.13 PAYMENT OF LIVING ANNUITIES
(1) LIVING ANNUITIES are paid on the 22nd of each month.
(2) The first LIVING ANNUITY payment shall be due at the end of
the calendar month following the month in which the MEMBER
became a LIVING ANNUITANT, or the LIVING ANNUITANT
died.
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(3) The last LIVING ANNUITY payment shall be due at the end of
the calendar month in which:
(a) the LIVING ANNUITANT elects to purchase a living
annuity or any other compulsory annuity outside the
FUND in his own name in terms of RULE 8.6(4),
(b) the full remaining credit balance in the Living Annuity
Account in respect of a LIVING ANNUITANT is paid to
him/her in a lump sum in terms of RULE 8.6(5),
(c) the last surviving LIVING ANNUITANT dies.
(4) The FUND shall be entitled to request a certificate of existence
to be provided from time to time in respect of LIVING
ANNUITANTS. When a certificate of existence is not returned by
the due date, the FUND shall be entitled to suspend the LIVING
ANNUITY and the LIVING ANNUITY shall be retrospectively
reinstated once satisfactory proof of existence has been
received by the FUND.
The FUND shall regularly test the validity of the LIVING
ANNUITANT data base with the Department of Home Affairs.
When the Department of Home Affairs has recorded a person
as deceased, the FUND shall be entitled to suspend the LIVING
ANNUITY and the LIVING ANNUITY shall be retrospectively
reinstated once satisfactory proof of existence has been
received by the FUND. Where any LIVING ANNUITIES have
been overpaid due to non-notification of the LIVING
ANNUITANT's death, such overpaid LIVING ANNUITY shall be
recovered from the LIVING ANNUITANT's estate.
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15. HOUSING LOANS
(1) The FUND may guarantee housing loans and/or enter into suretyship
agreements with the service provider appointed by the FUND to provide
housing loans to MEMBERS as provided for in the ACT.
(2) The conditions applicable to a contributing MEMBER who applies for a
housing loan in terms of the ACT, shall be contained in the agreement with
the service provider or in a separate TRUSTEE GUIDELINES, PROTOCOL
AND POLICY, which may be amended from time to time.
(3) Where a MEMBER fails to make regular repayments on the housing loan
and the MEMBER is in default in terms of the service provider’s agreement,
the FUND shall be entitled to settle the outstanding housing loan with the
service provider. In such instance, the MEMBER’s SHARE shall be reduced
accordingly with the settlement amount and any tax payable thereon.
16. FINANCIAL MATTERS
(1) The BOARD OF TRUSTEES shall ensure that such accounts, entries,
registers and records as are necessary for the proper management of the
FUND are kept. The books of account must be closed off as at the last day
of June in each year and be audited by the AUDITOR of the FUND.
(2) The accounts shall be approved by the BOARD OF TRUSTEES and a copy
thereof shall be available for inspection by MEMBERS of the FUND and any
other person who has an interest in the FUND.
(3) The financial year of the FUND shall be from the first (1st) day of July up to
and including the thirtieth (30th) day of June of the following year.
(4) The BOARD OF TRUSTEES shall have power by resolution to write off any
debts, dues or other claims which are payable to the FUND and which the
BOARD OF TRUSTEES deem desirable to write off as being irrecoverable
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or the recovery of which would be too difficult or costly or, in the opinion
of the BOARD OF TRUSTEES, will not be reasonably practicable to recover.
16.1 EXPENSES
(a) All of the expenses in connection with or incidental to the
management or administration of the FUND shall be borne by the
FUND. Provided that the travelling and subsistence expenses of
every person delegated by a PARTICIPATING EMPLOYER of its
EMPLOYEES or COUNCILLORS to attend a general meeting of the
FUND shall be borne by such PARTICIPATING EMPLOYER.
(b) The reasonable costs of identifying and tracing a BENEFICIARY may
be deducted from that MEMBER’s SHARE.
(c) The BOARD OF TRUSTEES in conjunction with the ACTUARY shall
from time to time determine the amount to be paid by the
MEMBERS, PENSIONERS, DEFERRED MEMBERS and PAID-UP
MEMBERS to cover the FUND expenses.
17. ACTUARIAL VALUATIONS
(1) The FUND shall keep such registers and records as will enable the
ACTUARY to undertake an actuarial valuation of the FUND at any time.
(2) The FUND shall be valued by the ACTUARY at intervals not exceeding three
years. The ACTUARY shall submit a valuation report to the BOARD OF
TRUSTEES within six (6) months of the date of the valuation, which report
shall contain recommendations in respect of any surplus or deficit existing
at the date of the valuation. The FUND shall send a copy of such report to
the REGISTRAR and shall indicate to the REGISTRAR the action it proposes
taking with regard to any recommendation made by the ACTUARY in his
report. A copy of the valuation report or a summary thereof as prescribed
by the REGISTRAR shall be submitted to each PARTICIPATING EMPLOYER.
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(3) In carrying out such valuation, the ACTUARY shall establish the balance in
each account and he shall estimate what portion of the investment
earnings is attributable to the various accounts, to ensure that any gain
resulting from assets underlying each account is credited to that account.
The basis of such estimated portion shall be agreed to by the BOARD OF
TRUSTEES in consultation with the ACTUARY from time to time.
(4) If the valuation reveals a surplus and the ACTUARY is in agreement
therewith, such surplus shall be allocated to the various accounts in such
proportions and in such manner as agreed to by the BOARD OF TRUSTEES,
in consultation with the ACTUARY, to be utilised in terms thereof to
increase the benefits supported by such accounts. If the valuation reveals
a shortfall, the BOARD OF TRUSTEES shall cause such shortfall to be
recouped as recommended by the ACTUARY, subject to the provisions of
RULE 7.2.9.
18. INVESTMENTS
18.1 BANK ACCOUNT
All monies received on account of the FUND shall be paid into an
account opened with a bank in the name of the FUND.
18.2 INVESTMENT PROCEDURES
(1) The BOARD OF TRUSTEES have the power, subject to the
provisions of the ACT, to invest in immovable property and/or
otherwise invest, lend, put at interest, place on deposit, make
advances of, or otherwise deal with all the monies of the FUND
upon such securities and in such manner as they from time to
time determine, and to dispose of immovable property, realise,
vary, reinvest, or otherwise deal with such securities and other
investments as they from time to time may determine.
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(2) The FUND may obtain an overdraft from a bank, or borrow
from any other party, on such terms as they deem fit, such sum
as the BOARD OF TRUSTEES approve for the purpose of
completing any investment or meeting any temporary cash
shortage, and for this purpose may give such security as they
deem necessary.
(3) Every document of title to an investment will be registered in
the name of the FUND or of a nominee company approved by
the REGISTRAR.
(4) The FUND must arrange for the safekeeping of all title deeds
and other securities belonging to or held by the FUND and for
the marking of those documents so as to easily establish at any
time those documents that belong to or are held by the FUND.
(5) All investments shall be subject to the conditions laid down in
the ACT and in the INVESTMENT POLICY STATEMENT.
Conditions and administrative processes are contained in the
TRUSTEE GUIDELINES, PROTOCOL AND POLICY.
18.3 GROWTH PORTFOLIO
18.4 PROTECTION PORTFOLIO
18.5 MODERATE PORTFOLIO
18.6 SHARIAH PORTFOLIO
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19. GENERAL PROVISIONS
19.1 MONIES NOT TO REVERT TO PARTICIPATING
EMPLOYER
The PARTICIPATING EMPLOYERS shall not derive any monetary
advantage from monies paid into or out of the FUND and no monies of
the FUND shall become the property of the PARTICIPATING EMPLOYERS
other than specifically provided for in the RULES or the ACT.
19.2 COPIES OF DOCUMENTS
(1) Every MEMBER shall on admission to membership be entitled to a
summary of the RULES.
(2) Every MEMBER shall also be entitled to inspect and make copies of
the current RULES of the FUND, the latest accounts of the FUND
and the latest valuation report by the ACTUARY.
(3) Any document that a MEMBER or another legitimate party requires
to be copied shall be subject to the payment of a reasonable fee
as determined by the FUND and as contained in the FUND’s
Promotion of Access to Information Manual.
19.3 COMPLAINTS
(1) A COMPLAINANT is entitled to lodge a written complaint to the
FUND in terms of the provisions of the ACT.
(2) A complaint so lodged must be properly considered and replied to
in writing by the FUND within thirty (30) days of receipt of such
complaint.
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(3) If the COMPLAINANT is not satisfied with the FUND’s response,
the COMPLAINANT may lodge the complaint with the
ADJUDICATOR.
20. PRESERVATION PENSION ACCOUNT
20.1 TRANSFERS INTO THE PRESERVATION PENSION
ACCOUNT
MEMBERS who transfer a benefit into the FUND from a PENSION FUND
will be required to transfer this benefit into the PRESERVATION
PENSION ACCOUNT.
20.2 FINANCIAL STRUCTURE OF THE PRESERVATION
PENSION ACCOUNT
The PRESERVATION PENSION ACCOUNT will be a separate account in
which a MEMBER’s transferred benefit in the abovementioned
circumstances is held. No further contributions by or on behalf of the
MEMBER may be allocated to the PRESERVATION PENSION ACCOUNT.
The PRESERVATION PENSION ACCOUNT shall consist of the following:
(a) Credits
(i) an amount comprising the sum of each MEMBER’s benefit
transferred from a PENSION FUND;
(ii) investment earnings on the assets underlying this particular
account based on the investment yield achieved by the
particular portfolio during the period which the said
earnings are credited to the PRESERVATION PENSION
ACCOUNT;
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(iii) special transfers from the Processing Reserve Account as
determined by the BOARD OF TRUSTEES in consultation with
the ACTUARY.
(b) Debits
(i) adjustments to the investment earnings on the assets
underlying this particular account based on the investment
yield achieved by the particular portfolio during the period
which the said earnings are debited to the PRESERVATION
PENSION ACCOUNT;
(ii) lump sum benefits paid to or in respect of MEMBERS;
(iii) transfers to an INSURER of any part of the benefit being
utilised to purchase an ANNUITY;
(iv) settlement of any housing loans or housing loan guarantee
and any tax payable thereon;
(v) payment of any pension interest in terms of a valid divorce
order to the non-member spouse;
(vi) payment of any benefit in terms of a valid maintenance
order or court order and the tax payable thereon, if any;
(vii) tax payable to the SA Revenue Services;
(viii) any costs and expenses referred to in these RULES.
(ix) special transfers to the Processing Reserve Account as
determined by the BOARD OF TRUSTEES in consultation
with the ACTUARY.
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20.3 RETIREMENT
20.3.1 NORMAL RETIREMENT
If a MEMBER retires in terms of RULE 8.1 on his NORMAL
RETIREMENT DATE, in addition to the MEMBER’s SHARE
payable in terms of the abovementioned RULE, the
MEMBER shall be entitled to receive the benefit in the
PRESERVATION PENSION ACCOUNT.
20.3.2 EARLY RETIREMENT
A MEMBER may retire at any time after having attained
the age of 50 years. Any benefit payable prior to the age
of 55 years shall be taxed in accordance with the
withdrawal tax tables of the applicable tax legislation. If
a MEMBER retires early in terms of RULE 8.2, in addition
to the MEMBER’s SHARE payable in terms of the
abovementioned RULE, the MEMBER shall be entitled to
receive the benefit in the PRESERVATION PENSION
ACCOUNT.
A MEMBER who retires from SERVICE under this RULE
shall in addition to the commutation and pension options
available in the RULES, be allowed to elect to become a
DEFERRED MEMBER and in such instance the provisions
of RULE 13 shall apply mutatis mutandis.
20.3.3 COMPULSORY EARLY RETIREMENT
A MEMBER who has attained the age of 55 years may be
required by the PARTICIPATING EMPLOYER to retire and
in the event of such MEMBER receiving a benefit in terms
of RULE 8.3, the following benefit shall also be payable:
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(1) the benefit in the PRESERVATION PENSION
ACCOUNT, plus
(2) an amount payable by the PARTICIPATING EMPLOYER
concerned (and for which it alone shall be liable to the
MEMBER), which is calculated as:
the difference between the age of 65 years and his
age on his nearest birthday, multiplied by 8%,
multiplied by the value of the PRESERVATION
PENSION ACCOUNT; or,
All the provisions of RULE 8.3 shall apply mutatis
mutandis to the payment of the benefit payable in terms
of this RULE and any reference to the MEMBER’s SHARE
shall include the benefit payable in the PRESERVATION
PENSION ACCOUNT.
The provisions of sub rule (2) do not apply to any NEW
EMPLOYEE, MUNICIPAL MANAGER, a manager directly
accountable to the MUNICIPAL MANAGER and whose
appointment is for a fixed-term and which is not on a
permanent basis, or a COUNCILLOR and such MEMBER
shall only be entitled to receive the value of their
PRESERVATION PENSION ACCOUNT as described in sub
rule (1) on exit due to compulsory early retirement
benefit, unless this benefit is specifically provided for in
their contract of SERVICE or terms of engagement.
A MEMBER who retires from SERVICE under this RULE
shall in addition to the commutation and pension options
available in the RULES, be allowed to elect to become a
DEFERRED MEMBER and in such instance the provisions
of the RULES relating to DEFERRED MEMBERS shall apply
mutatis mutandis.
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20.3.4 LATE RETIREMENT
If a MEMBER proceeds on late retirement in terms of the
provisions of RULE 8.4, in addition to the MEMBER’s
SHARE payable in terms of the abovementioned RULE,
the MEMBER shall be entitled to receive the benefit in the
PRESERVATION PENSION ACCOUNT.
20.3.5 COMMUTATION AND PENSION
OPTIONS
(1) The MEMBER may commute a maximum of one-third
(1/3rd) of the value of the PRESERVATION PENSION
ACCOUNT on retirement, subject to the provisions of the
applicable tax laws at the date of retirement.
(2) The portion of the PRESERVATION PENSION ACCOUNT
that is not commuted by the MEMBER as a lump sum
benefit shall be utilized to purchase an ANNUITY from
one or more INSURERS, subject to the provisions of the
Income Tax Act and the SA Revenue Services. The
following conditions are applicable to the purchase of an
ANNUITY from an INSURER:
(3) The ANNUITY must be purchased from an INSURER
selected by the MEMBER with the MEMBER as the owner
of the policy.
(4) The FUND’s liability in respect of a retiring MEMBER is
limited to the conclusion of the ANNUITY policy with the
INSURER for the payment of the ANNUITY directly to the
MEMBER. Immediately after the FUND has paid the
premium on the ANNUITY policy and where applicable,
made payment of any lump sum benefit, the MEMBER’s
membership of the FUND ceases.
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(5) Subject to the right of conversion into a lump sum
payment, the ANNUITY policy must be non-commutable
and non-surrenderable during the life of the retiring
MEMBER. The ANNUITY policy may not be transferred,
assigned, reduced, hypothecated or attached by creditors
as contemplated by the provisions of sections 37A and
37B of the ACT.
(6) The ANNUITY must be payable at least until the death of
the MEMBER. It may be a single-life ANNUITY, a joint
and survivorship ANNUITY or a flexible ANNUITY.
(7) When a MEMBER retires from the SERVICE of a
PARTICIPATING EMPLOYER in terms of RULE 20.3, such
MEMBER may elect to postpone payment of his
retirement benefit and become a DEFERRED MEMBER of
the FUND. The provisions of RULE 13 shall apply to the
deferred benefit payment.
The retirement benefit shall accrue for tax purposes at the
earlier of:
(a) the date on which the MEMBER exercises his choice
regarding the manner of payment of the benefit, or
(b) the MEMBER reaches the maximum age at which the
benefit must be paid in terms of income tax legislation.
(8) The FUND will make RETIREMENT BENEFITS
COUNSELLING available to the MEMBER before the
MEMBER select any option in terms of this RULE.
20.4 DEATH
In the event of the MEMBER’s death and in addition to the benefits
payable in terms of RULE 9, the value of the PRESERVATION PENSION
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ACCOUNT shall also be payable. The value of the PRESERVATION
PENSION ACCOUNT shall be included with the benefit payable in terms
of RULE 9 and shall be distributed in accordance with the provisions of
the ACT.
20.5 DISABILITY
In the event of the MEMBER becoming entitled to a disability benefit in
terms of RULE 10, in addition to the benefits payable in terms of the
abovementioned RULE, the value of the PRESERVATION PENSION
ACCOUNT is also payable subject to the provisions of RULE 10.2.2. The
payment of the PRESERVATION PENSION ACCOUNT shall be payable as
a retirement benefit.
The MEMBER may commute a maximum of one-third (1/3rd) of the
value of the PRESERVATION PENSION ACCOUNT when retiring on the
grounds of disability / ill-health, subject to the provisions of the
applicable tax laws at the date of retirement.
The MEMBER shall be required to purchase an ANNUITY with an
INSURER with the balance of the value of the PRESERVATION PENSION
ACCOUNT, subject to the conditions specified in RULE 20.3.5.
20.6 WITHDRAWAL
In the event of the MEMBER leaving SERVICE prior to his NORMAL
RETIREMENT DATE in terms of RULE 11, in addition to the benefit
payable in terms of the abovementioned RULE, the value of the
PRESERVATION PENSION ACCOUNT is also payable.
The MEMBER may elect a cash withdrawal benefit or a preservation
benefit in terms of the provisions of RULE 11.3.
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20.7 RETRENCHMENT
Where a MEMBER’s SERVICE is terminated in terms of RULE 11.2, in
addition to the benefit payable in terms of the abovementioned RULE,
the MEMBER shall also be entitled to the following benefit:
(1) the benefit in the PRESERVATION PENSION ACCOUNT, plus
(2) an amount payable by the PARTICIPATING EMPLOYER concerned
(and for which it alone shall be liable to the MEMBER), being the
lesser of-
(a) the difference between the age of 65 years and his age on
his nearest birthday, multiplied by 8%, multiplied by the
value of the PRESERVATION PENSION ACCOUNT; or
(b) 100% of the PRESERVATION PENSION ACCOUNT.
All the provisions of RULE 11.2 shall apply mutatis mutandis to the
payment of the benefit payable in terms of this RULE and any reference
to the MEMBER’s SHARE shall include the benefit payable in the
PRESERVATION PENSION ACCOUNT.
The provisions of sub rule (2) do not apply to a NEW EMPLOYEE,
MUNICIPAL MANAGER, a manager directly accountable to the
MUNICIPAL MANAGER and whose appointment is for a fixed-term and
which is not on a permanent basis, or a COUNCILLOR unless specifically
provided for in their contract of SERVICE or terms of engagement.
Such MEMBER who is not entitled to the provisions of sub rule (2) above
shall receive the value of their PRESERVATION PENSION ACCOUNT as
described in sub rule (1).
The MEMBER may elect a cash withdrawal benefit or a preservation
benefit in terms of the provisions of RULE 11.3.
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20.8 TRANSFERS OUT
A MEMBER who is transferred out of the FUND in terms of the provisions
of RULE 12, shall in addition to the benefit payable in terms of the
abovementioned RULE be entitled to the value of the PRESERVATION
PENSION ACCOUNT as at the date of the transfer. The provisions of
RULE 12 shall apply to the payment of the PRESERVATION PENSION
ACCOUNT on a MEMBER’s transfer out of the FUND.
20.9 HOUSING LOANS
One-third (1/3rd) of the value of the PRESERVATION PENSION
ACCOUNT shall be included with the MEMBER’s SHARE when
determining the qualifying amount for housing loan purposes in terms of
RULE 15.
20.10 PROTECTION PORTFOLIO
20.11 MODERATE PORTFOLIO
20.12 UNCLAIMED BENEFITS
If a benefit is not paid to a BENEFICIARY thereto entitled within twenty-
four (24) months as specified in the applicable legislation after such
benefit became legally due and payable such benefit shall be transferred
to an APPROVED PENSION PRESERVATION FUND, as approved by the
BOARD OF TRUSTEES.
The UNCLAIMED BENEFIT shall consist of the amount held in the
PRESERVATION PENSION ACCOUNT less any costs provided for in these
RULES.
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20.13 COSTS
If any costs are incurred to administer and manage this account or as a
consequence of the FUND tracing the MEMBER or any potential
BENEFICIARY, or in order to give effect to the provisions of section 37C
of the ACT, any such reasonable costs may be debited to the MEMBER’s
value in their PRESERVATION PENSION ACCOUNT, provided sufficient
funds exist.
20.14 DEFERRED MEMBERS
If a MEMBER elected to preserve the value of their PRESERVATION
PENSION ACCOUNT in terms of RULE 13, any benefit payable to such
DEFERRED MEMBER shall be paid in terms of the provisions of RULE 13.
21. DISSOLUTION OF FUND
(1) If 90% of the MEMBERS of the FUND and 90% of the PARTICIPATING
EMPLOYERS decide to dissolve the FUND, the BOARD OF TRUSTEES shall
appoint a liquidator, subject to the approval of the REGISTRAR.
(2) The liquidator shall allocate the balance in the Pensions Account to the
BENEFICIARIES who are entitled to PENSIONS on a basis determined by
the liquidator in consultation with the ACTUARY and use each such
BENEFICIARY'S allocation to purchase an ANNUITY from an INSURER. The
conditions determined in respect of such ANNUITY shall as far as possible
be similar to the PENSION which is being paid by the FUND.
The liquidator shall simultaneously allocate the balance in the Member
Share Account to each MEMBER in proportion to the MEMBER’s SHARES at
the time.
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Such amount shall be invested in an APPROVED PROVIDENT
PRESERVATION FUND, an APPROVED RETIREMENT ANNUITY FUND, or
any other fund that has been approved by the REGISTRAR.
The Reserve Accounts shall be distributed equitably between the MEMBERS
and PENSIONERS as decided on by the liquidator after consultation with
the ACTUARY and after taking the liquidation costs into account.
Any amount held in the PRESERVATION PENSION ACCOUNT shall be
allocated to such MEMBERS in proportion to their value in such account at
the time. Such amounts shall be invested in an APPROVED PENSION
PRESERVATION FUND, an APPROVED RETIREMENT ANNUITY FUND or any
other PENSION FUND that has been approved by the REGISTRAR.
(3) Alternatively, the liquidator may determine another method of disposing of
the assets of the FUND for the benefit of the MEMBERS and PENSIONERS,
subject to the approval of the REGISTRAR.
(4) Every person who left the SERVICE of a PARTICIPATING EMPLOYER during
the 12 month period (or such other greater period as may be agreed upon
between the BOARD OF TRUSTEES and the liquidator) immediately prior to
the date of dissolution, either voluntarily or due to a reduction in or re-
organisation of staff, shall for the purposes of this RULE be regarded as if
he had been a MEMBER on the date of termination of the FUND, but the
benefit already paid to him shall be taken into consideration in determining
the amount payable to him.
(5) If the FUND is terminated or dissolved under Section 28 of the ACT, all
moneys remaining unclaimed for a period of six months from the date on
which payment of benefits commenced after completion of all necessary
formalities shall be paid in terms of legislation as an unclaimed benefit to
an APPROVED PROVIDENT PRESERVATION FUND. Thereafter there shall
be no claim against the FUND or the PARTICIPATING EMPLOYERS.
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Any amount payable from the PRESERVATION PENSION ACCOUNT shall be
paid to an APPROVED PENSION PRESERVATION FUND.
The liquidator shall indicate in his final liquidation account the amount thus
paid and shall simultaneously furnish the REGISTRAR with a certificate to
the effect that all reasonable steps were taken to trace persons entitled to
the amount. An AUDITOR approved by the REGISTRAR shall certify the
account as being correct.
(6) If the FUND is wound up in terms of Section 29 of the ACT, and the
winding-up order does not specifically make reference to unclaimed
moneys in terms of the provisions of the Companies Act, 2008 (Act 71 of
2008), or direct otherwise regarding unclaimed moneys, the provisions of
sub rule (5) above shall apply.
(7) If the FUND is wound up in terms of sections 28 or 29 of the ACT, the
provisions relating to the transfer of business as contained in the ACT shall
apply.
(8) Should a PARTICIPATING EMPLOYER wish to disassociate from the FUND,
the PARTICIPATING EMPLOYER shall apply to the BOARD OF TRUSTEES for
disassociation and give reasons for such disassociation.
(9) In the event of the disassociation of a PARTICIPATING EMPLOYER, the
MEMBERS’ MEMBER SHARE and / or value in the PRESERVATION PENSION
ACCOUNT, after the costs of the termination of the PARTICIPATING
EMPLOYER have been taken into account shall be paid as a cash lump sum
benefit to the MEMBER or on election by the MEMBER, such benefit shall be
transferred to the new fund of the PARTICIPATING EMPLOYER, to an
APPROVED PROVIDENT PRESERVATION FUND, an APPROVED PENSION
PRESERVATION FUND, or an APPROVED RETIREMENT ANNUITY, unless
the PARTICIPATING EMPLOYER and the MEMBERS have specifically agreed
that such benefits will be wholly transferred to the new fund of the
PARTICIPATING EMPLOYER.