PENSION FUND LAW / EMPLOYEE BENEFITS

Our intricate understanding of the industry allows us to provide cost effective accurate and innovative legal solutions to our clients’ pension law issues. Our Pension Law department is led by one of South Africa’s leading Pension Law attorneys, Hunter Thyne. Our clients range from start-up to established retirement funds / pension funds / provident funds / retirement annuity funds, trustees, administrators, financial institutions, members/dependants/beneficiaries and many more.

Advising on Fund structures and the registration of new Funds

We advise clients on the identification and selection of appropriate fund structures, the drafting and implementation of project plans to register and bring funds into operation and assistance with regulatory and statutory compliance. 

Drafting of fund rules and amendments / Revision of fund rules

Drafting of Fund Rules and amendments. Revision of Fund Rules. Including the drafting of policies, member communication and commercial contracts with the assistance of our Commercial Law Department. Drafting and revision of service level agreements, administration agreements and all other agreements relevant to the relationships established between a Fund and third parties. 

Fund Governance

We advise boards of trustees on proper fund governance, assist with trustee meetings and provide guidance on the implementation of statutory and regulatory obligations and responsibilities.   

Matters concerning section 37C of the Pension Funds Act

In the event that a member of a pension fund dies before reaching retirement age (and if the rules of the particular fund permit), the lump sum benefit which becomes payable (hereinafter referred to as the “death benefit”) must be paid to the member’s dependants and/or nominees.

Section 37C of the Pension Funds Act regulates the payment of death benefits. The primary objective of section 37C is to ensure that those persons who were dependent on the deceased member are not left destitute after his/her death, irrespective of whether the deceased was legally required to maintain them.

The section 37C process can be summarised as follows:

1. The board of trustees must identify and trace “dependants” (as defined in section 1 of the Pension Funds Act) and those persons, if any, who have been nominated by the deceased member;
2. Make benefit allocations on a fair and equitable basis; and
3. Determine an appropriate mode of payment of the death benefit. 

We advise trustees on the proper application of Section 37C of the Pension Funds Act which includes assistance with disputes and matters referred to the Pension Funds Adjudicator. We also advise and represent dependents/beneficiaries where allocations by the board of trustees are not fair or equitable.

Matters concerning section 37D of the Pension Funds Act

We advise employers, funds and boards of trustees on the proper implementation of section 37D. With the assistance of our Employment Law Department, we assist the employer with the exercise of its rights in terms of section 37D in a lawful and procedurally correct manner.

The guiding principles surrounding section 37D has been cemented in case law on numerous occasions.

The Pension Funds Adjudicator in the matter of Records v Barlows Pension Fund [2000] 8 BPLR 920 (PFA summarised the provisions as follows:

1. There must be an amount due by a member to his employer on the date of his retirement or on which he ceases to be a member of the fund;
2. The amount must be in respect of compensation in respect of any damage caused to the employer;
3. The damage caused to the employer must be by reason of theft, dishonesty, fraud or misconduct by the member;
4. The member must either admit liability in writing to the employer or judgment must be obtained in any court;
5. The judgment or the written admission of liability must be in respect of the compensation due in respect of the damage caused.

The practical effect of 37D can therefore be summarized as follows – an employee misconducts himself, which misconduct causes the employer damage, the employer will then issue summons and obtain judgment against the employee, the employer can present his judgment to the fund and a deduction against the employees benefit should be allowed. 

Referring complaints to the Pension Funds Adjudicator / Defending Pension Fund Adjudicator complaints. Lodge appeals with the Financial Services Tribunal against determinations made by the Pension Funds Adjudicator.

We advise and represent funds, trustees, members, dependants/beneficiaries or any interested party with the launching or opposition of Pension Fund Adjudicator complaints.

Parties that are aggrieved by decisions of the Pension Funds Adjudicator may now lodge appeals with the Financial Services Tribunal. Previously, parties had to appeal Pension Funds Adjudicator determinations to the High Court at great cost within 6 weeks of the determination.

We assist with the launching or opposition of appeals lodged with the Financial Services Tribunal. 

Trustee Training

Knowledge of a trustee’s fiduciary duties, duties of care and skill and all legislative and regulatory requirements are of utmost importance for all parties involved. We provide our trustees with insightful and practical training incorporating all the latest developments in Pension Fund Law.