COSATU Submission (Part 2 - Proposed Amendments) on the

Pension Funds Second Amendment Bill

Submitted to the Finance Portfolio Committee, 22 August 2001

This table sets out all of COSATU's proposed amendments. The first column labelled "item" numbers each issue for ease of reference. The second column headed "Current provision in the Bill" cites the actual clause in the Bill as it stands. The third column indicates COSATU's view on the clause and, where appropriate, alternative drafting formulation. This table should be read in conjunction with Part 1 of our submission.

Contents

1 Definitions
2 Amendment of clause 14 - Amalgamations and Transfers
3 Insertion of clause 14A in Act 24 of 1956 - Minimum benefits
4 Insertion of clause 15A to 15K in Act 24 of 1956
5 Amendment of section 30 - Special Provisions relating to Liquidation of Funds
6 Amendment of clause 30H - Jurisdiction and prescription


1 Definitions

Item

Current provision in the Bill

COSATU's comments and proposals
  'actuarial surplus', in relation to a fund, means-
  1. in the case of a fund subject to actuarial valuation, the difference between-
  2. the value that the valuator has placed on the assets of the fund less the value of such contingency reserve accounts, established or to be established, as the board of the fund deems prudent on the advice of the valuator; and
  3. the value that the valuator has placed on the liabilities of the fund in respect of pensionable service accrued by members prior to the valuation date;
  4. in the case of a fund which is exempt from actuarial valuation, the difference between-
  5. the fair value of the assets of the fund less the values of any investment reserve account set up to facilitate the smoothing of investment returns credited to member accounts and such contingency reserve accounts as the board of the fund deems prudent; and
  6. the sum of the values of all the accounts held for individual members, whether contributory or paid-up, plus any outstanding benefits payable by the fund
No objection at this stage, save that the Act must ensure that, where actuarial surplus is drawn upon, paid out or allocated to a surplus account in terms of clause 15B and C, the value must be calculated by increasing the actuarial surplus by the investment reserve factor.
  Add the following definition for 'accrued liability'

In order to provide for a minimum benefit for members and former members equal to a fair share of the fund, the concept of an accrued liability should be introduced. This would ensure that members' benefits are protected against the negative effects of economic variables and that the valuation basis is free from manipulation and is objectively justifiable.

`accrued liability', means

(a) The actuarial liabilities in respect of past service benefits (including accrued bonus service) of active members, with due allowance for future salary increases where these affect the benefits in respect of past service, and with due allowance for increases in pension and deferred pensions at rates consistent with past practice, the current policy and the reasonable benefit expectations of members;

(b) the actuarial liabilities in respect of pensions in course of payment and deferred pensions, with due allowance for increases at rates consistent with past practice, the current policy and the reasonable benefit expectations of pensioners; and

(c) any other accrued actuarial liability

 Actuarial liability must be calculated using the statutory valuation basis prior to the first restructuring or transfer event in the fund, unless the trustees satisfy the Registrar that another valuation basis is objectively appropriate and is consistent with this basis.
  `commencement date' means the date of commencement of this Amendment Act No objection at this stage
  `contingency reserve account' in relation to a fund, means an account of the fund to which shall be credited or debited such amounts as the board of the fund concerned shall determine, on the advice of the valuator where the fund is not exempt from actuarial valuations, in order to provide for contingencies defined in the rules of the fund No objection at this stage
  `contribution holiday', in relation to a fund, means payment by the employer of less than-
    1. in the case of a defined benefit fund, the difference between the standard contribution rate as defined in generally accepted actuarial practice and the contribution payable by members; or
    2. in the case of a defined contribution fund, the employer contribution rate defined in the rules prior to application of any credit balance in the employer reserve account.
This definition will become obsolete as no contribution holidays is contemplated. A contribution holiday would be inconsistent with the proposed minimum benefit provisions in clause 14A and with the allocation of ordinary surplus in terms of clause 15C. The clause should therefore be deleted.
  `conversion', in relation to a fund, means the change of the basis of funding of the retirement benefit from defined benefit to defined contribution, or vice versa This definition is incorrect and should be amended to reflect that the conversion relates to the nature of the benefit rather than the nature of the funding of the benefit. The clause should therefore read as follows: `conversion', in relation to a fund, means the change of the basis of [funding of] the retirement benefit from defined benefit to defined contribution, or vice versa
  `deferred pensioner' means a member who has not yet retired but has left the service of the employer concerned prior to normal retirement age, as defined in the rules of the fund, leaving in the fund the member's rights to such benefits as may be defined in the rules No objection at this stage
  `defined benefit fund' means a fund other than a defined contribution fund This definition allows for confusion in cases where the rules of defined benefit funds also define the normal rate of employer contribution. The definition should therefore be amended as follows: `defined benefit fund' means a fund other than a defined contribution fund, irrespective of the manner in which the employer contribution rates are defined or calculated.
  `defined contribution fund' means a fund in respect of which any benefits payable on leaving service for a reason other than death or disability have a value equal to or less than the value of the contributions paid by and/or on behalf of the member accumulated with such investment returns as the board of the fund determines No objection at this stage
  `employer', in relation to a fund, means an employer participating in the fund No objection at this stage
  `employer surplus account', in relation to a fund, means an account of the fund to which shall be credited -
  1. amounts allocated by the board of the fund in terms of section 15A for use by the employer;
  2. such contributions as are specified in the rules to be credited to this account; and
  3. investment return on the balance in the account from time to time at a rate determined by the board of the fund after taking account of the earnings of the fund, and to which shall be debited any surplus utilised by the employer.
 		This clause will become redundant in light of the fact that no surplus may be allocated to the employer in terms of COSATU's proposals for minimum benefits and allocation of ordinary surplus in clauses 14A and 15 C. This clause should be deleted.
  `fair value', in relation to the assets of a fund, means the fair value of the assets of the fund determined in accordance with South African Statements of Generally Accepted Accounting Practice No objection at this stage
  Add the following definition of `former members` This definition is necessary in order to allow for a consistent cut-off date in allocating minimum benefits to former members. See clause 15B, which regulates the payment to former members. `former members', means all members that were subject to a conversion or left a fund on grounds related to transfers at any stage after 1980 and all members who exited funds due to dismissals (including retrenchments), and resignations since 1990.
  `investment reserve account', in relation to a fund which is a defined contribution fund, means an account of the fund to which shall be credited the gross investment earnings of the fund, and to which shall be debited the investment returns credited to individual member accounts and such expenses as the board of the fund determines are best levied against the gross investment earnings, including any tax payable on the investment build-up of the fund No objection at this stage
  Add the following definition of `investment reserve factor` `investment reserve factor` is the proportion that the fair value of the net assets bears to the accrued value of the net assets, as calculated on a prescribed basis.
  `Labour Relations Act, 1995' means the Labour Relations Act, 1995 (Act No 66 of 1995) No objection at this stage
  `member surplus account', in relation to a fund, means an account of the fund to which shall be credited-
    1. amounts allocated by the board of the fund in terms of section 15A to be used for the benefit of members;
    2. investment return on the balance in the account from time to time at a rate determined by the board after taking account of the earnings of the fund,
and to which account shall be debited-
    1. the cost of any benefit improvements funded from this account; and
    2. any expenses which would otherwise reduce benefits payable to members
 This clause will become redundant in light of COSATU's proposals that the minimum benefit that a member is entitled to is the member's share of fund and that ordinary surplus is proportionally allocated to members and pensioners. It would therefore not be necessary to distinguish for whose benefit surplus will be applied. This clause should be deleted.
  `minimum contribution accumulation' means the value of the member's contributions accumulated with a rate of interest which is reasonable in relation to the investment return earned by the fund, net of such expenses as the board of the fund determines should be offset against the investment return: Provided that the board of the fund may elect to smooth these interest rates over a period which should not exceed ten (10) years This clause must be amended to ensure that the gross investment return will be used as the basis for calculating the interest that will be allocated to members. This must be done to ensure that the full investment earnings are taken into consideration before offsetting any expenses. The clause must therefore be amended as follows: `minimum contribution accumulation' means the value of the member's contributions accumulated with a rate of interest which is reasonable in relation to the gross investment return earned by the fund, net of such expenses as the board of the fund determines should be offset against the gross investment return: Provided that the board of the fund may elect to smooth these interest rates over a period which should not exceed ten (10) years
  `minimum individual reserve' means
    1. in relation to a member of a defined benefit fund, the present value of the benefit payable from the member's normal retirement age in terms of the rules of the fund assuming that the member's pensionable remuneration remains constant from the effective date of the calculation to normal retirement age and pensionable service is fixed at the amount accrued at the effective date of the calculation: Provided that the present value will be determined using assumptions prescribed by the registrar by notice in the Gazette ; and
    2. in relation to a member of a defined contribution fund, the value of the member's individual account together with a share of the investment reserve account and any contingency reserve accounts, in the proportion that the member's individual account value as at the effective date of calculation bears to the total of all members' individual account values as at this date

The minimum benefit of every member must be the member's share of fund. In order to achieve this, the definition in paragraph (a) should be replaced by the following definition: `minimum individual reserve' means in relation to a member of a defined benefit fund, the, the actuarial liability multiplied by the investment reserve factor." The definition in paragraph (b) should be amended to ensure that it is clear that both member and employer contributions are included in the member's individual account, as the employer's contribution is made on behalf of the member and therefore belongs to the member. The clause must therefore be amended as follows;
    1. in relation to a member of a defined contribution fund, the value of the member's individual account, including full employer contributions for retirement benefits, together with a share of the investment reserve account and any contingency reserve accounts, in the proportion that the member's individual account value as at the effective date of calculation bears to the total of all members' individual account values as at this date
  `minimum pension increase' means the lower of
    1. the increase that can be afforded from the difference between the investment return earned by the fund on the assets backing pensioner liabilities and the cost of pension increases awarded previously, in both cases projecting over the period from date of retirement to the effective date of calculation of the increase: Provided that, if the assets backing the pensioner liabilities are not administered separately from the other assets of the fund, the investment return earned on all the assets shall be used instead of the investment return earned on the assets backing pensioner liabilities; and
    2. the amount required to increase the pension to the pension payable in the month following retirement, net of the commutation of any portion of the pension for cash, increased by the change in the consumer price index from the date of retirement to the effective date of calculation of the increase:
Provided that, where the pension has arisen because of the death of a member rather than the member's retirement, retirement shall be replaced by death in 25 (a) and (b) above. 		Pensioners must get at least the defined rate of pension increase that has been promised to them. This must be topped-up with what the fund could have afforded from time to time. This will ensure that members get their defined pension increase benefit and will benefit from the investment surpluses related to the assets backing the pensioner's benefit. The clause must therefore be amended as follows: `minimum pension increase' means the [lower] greater of
    1. the increase that can be afforded from the difference between the investment return earned by the fund on the assets backing pensioner liabilities and the cost of pension increases awarded previously, in both cases projecting over the period from date of retirement to the effective date of calculation of the increase: Provided that, if the assets backing the pensioner liabilities are not administered separately from the other assets of the fund, the investment return earned on all the assets shall be used instead of the investment return earned on the assets backing pensioner liabilities; and
    2. the amount required to increase the pension to the pension payable in the month following retirement, net of the commutation of any portion of the pension for cash, calculated in terms of the promised rate of increase from the date of retirement to the effective date of calculation of the increase:
Provided that, where the pension has arisen because of the death of a member rather than the member's retirement, retirement shall be replaced by death in 25 (a) and (b) above.
  `pensioner', in relation to a fund, means a member of that fund, or a dependant of a former member of that fund, who is, in either case, in receipt of a pension paid from the fund No objection at this stage
  `principal employer', in relation to a fund, means the employer defined as the principal employer in the rules of the fund No objection at this stage
  Amend the definition for `regulation' The definition of 'regulation' in the Pension Funds Act should be amended to ensure that the regulations are made in consultation with all appropriate parties and with the necessary scrutiny by and agreement of NEDLAC and Parliament. A corresponding meaning must be accorded to "regulate". This clause should be amended as follows: 'regulation' means a regulation made in consultation with all appropriate parties and with the scrutiny and agreement of Parliament and the National Labour and Economic Development Council and in force under this Act;
  `repatriate' means the payment of any assets of the fund, in cash or by transfer of assets, to a person other than a member entitled to a benefit from the fund This clause will become obsolete, as no so-called "repatriation" will be possible in future, in terms of COSATU's proposals regarding minimum benefits (clause 14A) and allocation of future ordinary surplus (clause 15C). The clause should be deleted.
  `reserve account', in relation to a fund, means a contingency reserve account, or investment reserve account, as the case may be No objection at this stage
  `retrenchment', in relation to a member, means dismissal from employment based on the operational requirements of the relevant employer No objection at this stage
  'stakeholder', in respect of a fund, means current members, including pensioners and deferred pensioners, former members and the employers participating in the fund As discussed elsewhere in our submission, employers are not stakeholders in the fund and have no legal stake nor any other equitable claim on the fund. This definition should thus be deleted.
  `statutory actuarial valuation', in relation to a fund, means an investigation by a valuator contemplated in section 16 No objection at this stage
  `surplus apportionment date', in relation to a fund, means the effective date of the statutory actuarial valuation of the fund coincident with, or next following, the commencement date: Provided that, where the board of a fund elects to apportion actuarial surplus after the commencement date but prior to the effective date upon which the next statutory actuarial valuation would otherwise have taken place, the effective date of the next statutory actuarial valuation shall be advanced to the actual date of apportionment of the actuarial surplus by such board This definition must be amended to ensure that employers do not evade their obligations in terms of this Bill and to ensure that, from the date of commencement of the Bill, all members will receive their minimum benefits. The current clause allows employers to opt out from implementing the minimum benefit obligations, as set out in the current clause 14A(2). The clause should therefore be amended as follows: `surplus apportionment date', in relation to a fund, means the earlier of the date of liquidation, transfer, conversion or retrenchment and the effective date of the statutory actuarial valuation of the fund coincident with, or next following, the commencement date: Provided that, where the board of a fund elects to apportion actuarial surplus after the commencement date but prior to the effective date upon which the next statutory actuarial valuation would otherwise have taken place, the effective date of the next statutory actuarial valuation shall be advanced to the actual date of apportionment of the actuarial surplus by such board


2 Amendment of clause 14 - Amalgamations and Transfers

Item

Current provision in the Bill

COSATU's comments and proposals
 

Clause 14(1)(c)(iii)

"(c) the registrar is satisfied that the scheme referred to in paragraph (a) is reasonable and equitable and accords full recognition-
  1. to the rights and reasonable benefit expectations of the members transferring in terms of the rules of a fund concerned, where such rights and reasonable benefit expectations shall relate to service prior to the date of transfer; and
  2. to any additional benefits, in respect of service prior to the date of transfer, the payment of which has become established practice; and
  3. to the payment of minimum benefits referred to in section 14A, and that the proposed transactions would not render any fund which is a party thereto and which will continue to exist if the proposed transaction is completed, unable to meet the requirements of this Act or to remain in a sound financial condition or, in the case of a fund which is not in a sound financial condition, to attain such a condition within a period of time deemed by the registrar to be satisfactory;".
No objection at this stage


3 Insertion of clause 14A in Act 24 of 1956 - Minimum benefits

Item

Current provision in the Bill

COSATU's comments and proposals
  "Minimum benefits Clause 14A

Comments:

The minimum benefit that each member is entitled to is the member's proportional share in the fund. Every member is entitled to at least his/her minimum entitlement in all the following circumstances:
  1. On retrenchment;
  2. On termination of the fund in terms of sections 28 or 29;
  3. On conversion of a fund from a defined benefit to a defined contribution fund;
  4. On transfer from one fund to another;
  5. On exit from a fund prior to retirement, despite anything contained in the rules of the fund
  14A. (1) Any registered fund shall provide the following minimum benefits to a member:
  1. the benefit paid to a member who is retrenched shall not be less than the minimum individual reserve
 There should be no distinction between the position of members on transfer, conversion, retrenchment, liquidation, dismissal or resignation. The benefit paid to a member in all these circumstances must be at least the minimum individual reserve, which COSATU has defined as the member's proportional share of the fund. Clause 14(A)(1)(a) should therefore be amended to read as follows: 14A. (1) Any registered fund shall provide the following minimum benefits to a member: (a) the benefit paid to a member who [is retrenched] exits the fund, including on the grounds of liquidation, and despite any conversion of a fund, shall not be less than the minimum individual reserve Clauses 14A(1)(b)–(d) should therefore be deleted. See amended definition of minimum individual reserve above.
  14A. (1) Any registered fund shall provide the following minimum benefits to a member:
  1. the benefit that is paid to a member if the fund is terminated in terms of sections 28 or 29 shall not be less than the minimum individual reserve: Provided that, where the fair value of the assets of the fund after recovery of any debt owed by the employer in terms of section 30(3) is lower than the total of the minimum individual reserves for all members who are being included in the distribution of the assets, after adjustment for any benefits paid previously, the minimum individual reserve may be proportionally reduced by the ratio which the fair value of the assets bears to the total of all the minimum individual reserves adjusted for any benefits paid previously;
 Delete in light of amendment to 14A(1)(a)
  14A. (1) Any registered fund shall provide the following minimum benefits to a member:
  1. if the fund is converted from a defined benefit to a defined contribution basis of funding, the amount that is to be credited to the member's individual account shall not be less than the minimum individual reserve;
Delete in light of amendment to 14A(1)(a)
  14A. (1) Any registered fund shall provide the following minimum benefits to a member:
  1. if the member is transferred from one fund to another, the transfer value shall not be less than the minimum individual reserve;
 Delete in light of amendment to 14A(1)(a)
  14A. (1) Any registered fund shall provide the following minimum benefits to a member:
  1. starting with the pension increase payable from the effective date of the statutory actuarial valuation coincident with, or next following, the commencement date, and at least once every three years thereafter, the pension increase to be granted to pensioners shall not be less than the minimum pension increase; and
 Pensioners must get at least the defined rate of pension increase that has been promised to them. This must be topped-up with what the fund could have afforded from time to time. This will ensure that members get their defined pension increase benefit and will benefit from the investment surpluses related to the assets backing the pensioner's benefit. In order to achieve this, the definition of minimum pension increase in clause 1 needs to be amended as discussed above. The clause should be renumbered as 14(1)(b)
  14A. (1) Any registered fund shall provide the following minimum benefits to a member:
  1. if a member leaves the fund prior to retirement with a benefit in terms of the rules which is based upon the accumulation of the member's own contributions with interest, the member shall not receive less, in respect of his own accumulated contributions, than the minimum contribution accumulation.
 The clause should be renumbered as 14(1)(c) See paragraph (b) of amended definition of "minimum contribution accumulation" above.
  (2) (a) In respect of a fund which is registered on or after a date three (3) months after the commencement date, subsection (1) shall apply immediately on registration. (b) In respect of a fund which is registered prior to a date three (3) months after the commencement date
  1. Paragraphs (a), (c) and (d) of subsection (1) shall, apply from a date twelve (12) months after the surplus apportionment date.
  2. Paragraph (f) of subsection (1) shall apply from the scheme anniversary coincident with or next following the commencement date.
  3. Paragraphs (b) and (e) of subsection (1) shall apply from the commencement date.
 This clause currently provides for a phasing in period for the provision of minimum benefits. COSATU acknowledges the need for phasing in periods in order to allow for the effective administration of the new benefit regime. However, the Bill should be amended to ensure that the rights to minimum benefits must vest or accrue from the date of the commencement of the Amendment Act. This clause must be amended to ensure that the whole of the Act must apply immediately on the commencement date to both existing and new funds, except that an administration period of 12 months should be allowed for in the case of existing funds. Clause 14A(2)(b) should therefore be replaced with the following clause: (b) A fund which is registered prior to a date three (3) months after the commencement date, shall have a period of twelve (12) months after the surplus apportionment date to administer the payment of the minimum benefits in terms of paragraph (a) of subsection (1) accruing as at the commencement date.
  (3) If the employer exercises any right that the employer has in terms of the rules of the fund to terminate the fund prior to the commencement date or change the basis upon which future benefits accrue prior to the date from which paragraphs (a) (c) and (d) of subsection (1) will apply to the fund, the members may not seek redress against the employer in respect of any increase in value of the benefits that would occur as a result of the application of minimum individual reserves to the fund.

Clause 14A(3) of the Bill allows the employer to evade their minimum benefit obligations in the following two ways:
  1. The employer can terminate the fund before the commencement of the Amendment Act; and
  2. The employer may effect substantive changes in the fund that affect transfers, conversions and retrenchments in the period proceeding the date from which they will need to comply with the minimum benefit provisions. The effect of this will be that, for a period of between 1 and 4 years, members may not receive their minimum benefits and the employer may continue to manufacture extraordinary surplus.
This section should be deleted on the basis that it will extinguish members' existing rights and will allow for the objects of the Bill to be undermined.


4 Insertion of clause 15A to 15K in Act 24 of 1956

Item

Current provision in the Bill

COSATU's comments and proposals
 

Clause 15A Rights to the use of actuarial surplus

 
  15A. (1) All actuarial surplus in the fund, belongs to the fund. COSATU does not object to this clause, but believes that the principle that only members can benefit from these funds, must be included. The clause should therefore be amended as follows: 15A. (1) All actuarial surplus in the fund, belongs to the fund and must be used for the benefit of members only.

 

 (2) Once apportioned to either the member surplus account or the employer surplus account in terms of sections 15B and 15C, members and the employer acquire rights to use such actuarial surplus as provided for in this section. This clause will become redundant in light of COSATU's proposals that the minimum benefit that a member is entitled to is the member's share of fund and that ordinary surplus is proportionally allocated to members and pensioners. It would therefore not be necessary to distinguish for whose benefit surplus will be applied and surplus will not be allocated to surplus accounts. This clause should be deleted.
  (3) After the commencement date, the only portion of the assets of the fund that may be utilised by, or for the benefit of, the employer is any credit balance in the employer surplus account: Provided that the employer may continue a contribution holiday, which the employer was already taking immediately prior to the commencement date upon the following conditions:
  1. The value of any contribution holiday taken by the employer during any period between the commencement date and the surplus apportionment date, accumulated with the investment return earned by the fund, net of expenses, must be added to the actuarial surplus to be apportioned at the surplus apportionment date, and must after the surplus apportionment, be debited to the employer surplus account.
  2. If the employer surplus account has a debit balance after such debit, the debit balance will represent a debt owed by the employer to the fund and the employer must redeem such debt within a period deemed reasonable by the board of the fund, and the fund must then notify the registrar, in writing and in the prescribed manner, of the amount and terms of repayment of any such debt.
 All existing credits in employers' surplus accounts will be utilised in order to pay members since 1980 or 1990 their minimum benefits. All future ordinary surplus will be applied for the benefit of members. This clause will therefore become obsolete and should be deleted.
  (4) Any credit balance in the member surplus account must be used for the benefit of members as provided for in section 15D. All existing member surplus accounts will be applied to pay members since 1980 and 1990 their minimum benefits in terms of clause 15B, read with clause 14A. The clause is therefore redundant and must be deleted.

 

Clause 15B Apportionment of existing surplus

We propose that this clause should not deal with the distribution of future ordinary surpluses and should only deal with addressing past inequities. We therefore propose that the title should be amended to read: "Payment of former members' reasonable benefit expectations".
  15B. (1) The board of a fund must, within three months following the completion of the statutory actuarial valuation performed as at the surplus apportionment date, but not later than 15 months after the surplus apportionment date, submit a scheme for the proposed apportionment of any actuarial surplus (in this section referred to as the scheme) as at the surplus apportionment date to the registrar. Such scheme must comply with such conditions as the registrar may prescribe by regulation. COSATU is of the view that all former members that left a fund at any stage after 1980 on grounds related to transfers, conversions, dismissals (including retrenchments) or resignations is entitled to the same minimum benefits as current members. COSATU believes that 1980 is the most applicable cut-off date, since this was the date that the apartheid regime attempted to impose the compulsory preservation of pension fund benefits. This sparked the subsequent mass of restructuring of the pension funds industry and the deprivation of members' reasonable benefit expectations. For the same reason, all pensions now in payment should be increased in accordance with the minimum pension increase provisions, from 1980 or the date of retirement, whichever is the latest. The sub-clause should therefore be amended to refer to the equitable payment of benefits to former members and not to the apportionment of any actuarial surplus. The Amendment Act should make provision for Regulations that deal with only the technical implementation of these principles. In general, all core issues should be in the Act and not in the Regulations, as is currently the case in a number of instances. The clause should therefore read as follows:

15B. (1) The board of a fund must, within three months following the completion of the statutory actuarial valuation performed as at the surplus apportionment date, but not later than 15 months after the surplus apportionment date, submit a scheme for [the proposed apportionment of any actuarial surplus] payment of minimum benefits to former members and current pensioners (in this section referred to as the scheme) as at the surplus apportionment date to the registrar. Such scheme must [comply with such conditions as the registrar may prescribe by regulation] give effect to the following requirements:

  1. The financial history of the fund must be determined and all transfers, conversions, dismissals (including retrenchments) and resignations that took place in the period from 1980 to the commencement date must be identified;
  2. The fund must then identify former members' minimum benefits.
  3. The fund must calculate the difference between the minimum benefit and what members were paid on exit or conversion, expressed in present value.
  4. The former members' benefits must be paid to them.
  5. The fund must determine additional payments to pensioners to remedy unfair past practices. Pensioners must be paid their minimum pension increases.
See the inserted definition of "former members" above.
  (2) The scheme may involve the improvement of benefits to existing members and pensioners, increases to benefits or transfer values in respect of former members, the crediting of an amount to the member surplus account, and/or the crediting of an amount to the employer surplus account. This sub-clause should be deleted. This clause should not deal with benefits, as the purpose of this clause is to redress past practices.
  (3) The board of the fund must determine -
  1. who may participate in the apportionment of actuarial surplus, and shall include in such apportionment such former members as may be prescribed;
  2. what amount of actuarial surplus should be retained in contingency reserve accounts;
  3. an equitable distribution of the residual actuarial surplus between the various classes of stakeholder whom the board has determined shall participate in the apportionment, following which such portion as is due to the employer shall be credited to the employer surplus account;
  4. how, in the case of members and former members, the allocated portion of actuarial surplus will be applied for their benefit, including the crediting of any portion to the member surplus account after taking account of the financial history of the fund, in such manner as may be prescribed by notice in the Gazette.

This sub-clause should be deleted, as the purpose of this clause is to redress past practices.

 

 (4) At least 75 percent of the board of the fund duly constituted in terms 15 of section 7A must approve the scheme.

It appears that this sub-clause will become irrelevant, as the conditions of the scheme will be prescribed. This clause should be deleted.
  A new sub-clause (2) should be inserted (2) In the event that the redressing of past practices leads to a deficit in the Fund:
  1. a plan for the funding of the deficit by the employer must be dealt with in terms of section 18 of the Act.
  2. if there is no agreement on the funding scheme, and before the Registrar may exercise his discretion in terms of section 28 or 29, the matter must be referred to the Adjudicator.
  (5) Notwithstanding anything to the contrary in the rules of the fund, no person or persons other than the relevant board (or, in the event of a deadlock within the board, the special ad hoc tribunal referred to in section 15K), and the registrar may be required to approve the scheme. (6) Such apportionment shall be of no force or effect unless
  1. the scheme, including a copy of every actuarial or other statement taken into account for the purposes of the scheme, has been submitted to the registrar;
  2. the registrar has been furnished with a certificate signed by the valuator stating whether or not the valuator finds the apportionment of the surplus between the stakeholders to be equitable and, if not, why not, together with such additional particulars or such a special report by the valuator, as he may deem necessary for the purposes of this subsection;
  3. the registrar has been furnished with such additional report, as he may require, from an independent actuary appointed by the registrar, on such matters associated with the apportionment of the actuarial surplus as the registrar shall determine and including such information as may be prescribed: Provided that the registrar must require such a report where the board of the fund has been unable to reach agreement within the prescribed period, or where there are complaints in respect of the apportionment of surplus which have not been resolved to the satisfaction of the complainants concerned: Provided further that the costs consequent on the appointment of such independent actuary shall be borne by the fund;
  4. the employer, and members have been informed of the scheme in a manner which is clear and understandable to the members and which gives details of the allocation of the actuarial surplus for the benefit of the various stakeholders, including the Rand amounts of any actuarial surplus which it is intended to credit to the member surplus account and to the employer surplus account, respectively, and the Rand costs of any benefit improvements for members and former members: Provided that
  5. standards for the information to be included in this communication may be prescribed by regulation, including a requirement that the independent actuary and/or the valuator certifies that he or she is satisfied that the communication material is objective and contains sufficient information to enable the stakeholders to judge the reasonableness of the scheme, and
  6. the communication should be explicit about how and where any complaint should be lodged;
  7. the employer and members have had four (4) weeks after receipt of the communication in which to complain to the board of the fund;
  8. the board of the fund have considered such objections before submitting the scheme to the registrar;
  9. the principal officer of the fund has furnished the registrar with details of all objections lodged with the board and the actions taken to address such objections;
  10. the registrar is satisfied that the scheme is reasonable and equitable and accords full recognition to the rights and reasonable benefit expectations of members and former members; and
  11. the registrar has forwarded a certificate to the principal officer of the fund to the effect that all the requirements of this subsection have been fulfilled.
(7) If the board of a fund fails to submit a scheme as required by subsection (1) or the registrar doubts the equity of the scheme, possibly but not exclusively, as a result of outstanding complaints, the registrar shall refer the apportionment of the surplus to the special ad hoc tribunal referred to in section 15K, and such tribunal shall exercise the powers of the board in terms of this section: Provided that, if the apportionment of actuarial surplus is referred to the tribunal, any reference in section 15B to the board shall be construed as a reference to the tribunal.

The proposed dispute resolution procedure for disputes relating to surplus apportionment in the Bill exacerbates the current problems with the resolution of pension fund disputes. Although COSATU notes the intended advantages of an ad hoc tribunal, it remains concerned about duplication in functions and the dangers of forum shopping. See COSATU's proposed amendments to clause 15B(2) and 15K. This clause should be renumbered clause 15B(3) and should be amended as follows: (5) Notwithstanding anything to the contrary in the rules of the fund, no person or persons other than the relevant board (or, in the event of a deadlock within the board, the [special ad hoc tribunal referred to in section 15K)] Adjudicator, and the registrar may be required to approve the scheme. (6) Such [apportionment] payment made in terms of sub clause (1) shall be of no force or effect unless
  1. the scheme, including a copy of every actuarial or other statement taken into account for the purposes of the scheme, has been submitted to the registrar;
  2. the registrar has been furnished with a certificate signed by the valuator stating whether or not the valuator finds the [apportionment of the surplus between the stakeholders to be equitable] payment to former members and pensioners of their minimum benefits to afford members full recognition of their reasonable benefit expectations and, if not, why not, together with such additional particulars or such a special report by the valuator, as he may deem necessary for the purposes of this subsection;
  3. the registrar has been furnished with such additional report, as he may require, from an independent actuary appointed by the registrar, on such matters associated with the payment to former members and increases to pensioners of their minimum benefits as the registrar shall determine and including such information as may be prescribed: Provided that the registrar must require such a report where the board of the fund has been unable to reach agreement within the prescribed period, or where there are complaints in respect of the apportionment of surplus which have not been resolved to the satisfaction of the complainants concerned: Provided further that the costs consequent on the appointment of such independent actuary shall be borne by the fund;
  4. the employer, and members have been informed of the scheme in a manner which is clear and understandable to the members and which gives details of the [allocation of the actuarial surplus for the benefit of the various stakeholders,] payment to former members and increases to pensioners of their minimum benefits including the Rand amounts [of any actuarial surplus] which it is intended to credit to the member [surplus account and to the employer surplus account, respectively], and the Rand costs of any benefit improvements for members and former members: Provided that
  5. standards for the information to be included in this communication may be prescribed by regulation, including a requirement that the independent actuary and/or the valuator certifies that he or she is satisfied that the communication material is objective and contains sufficient information to enable the stakeholders to judge the reasonableness of the scheme, and
  6. the communication should be explicit about how and where any complaint should be lodged;
  7. the employer and members have had four (4) weeks after receipt of the communication in which to complain to the board of the fund;
  8. the board of the fund have considered such objections before submitting the scheme to the registrar;
  9. the principal officer of the fund has furnished the registrar with details of all objections lodged with the board and the actions taken to address such objections;
  10. the registrar is satisfied that the scheme is reasonable and equitable and accords full recognition to the rights and reasonable benefit expectations of members and former members; and
  11. the registrar has forwarded a certificate to the principal officer of the fund to the effect that all the requirements of this subsection have been fulfilled.
(7) If the board of a fund fails to submit a scheme as required by subsection (1) or the registrar doubts the equity of the scheme, possibly but not exclusively, as a result of outstanding complaints, the registrar shall refer the apportionment of the surplus to the [special ad hoc tribunal referred to in section 15K], Adjudicator, [who shall exercise the] whose powers in determining the dispute shall include the powers of the board in terms of this section: Provided that, if [the apportionment of actuarial surplus] a dispute regarding the payment to former members and increases to pensioners of their minimum benefits is referred to the [tribunal], Adjudicator any reference in section 15B to the board shall be construed as a reference to the [tribunal] Adjudicator.

 

Clause 15C Apportionment of future surplus

15C. (1) The rules of a fund may determine any apportionment of actuarial surplus arising in the fund after the surplus apportionment date between the member surplus account and the employer surplus account. (2) If the rules are silent on the apportionment of actuarial surplus arising after the surplus apportionment date, any apportionment shall be determined by the board of the fund in the proper exercise of their fiduciary duties towards the stakeholders of the fund: Provided that, notwithstanding anything to the contrary in the rules of the fund, neither the employer nor the members may exercise a right to veto such apportionment. 		This clause should be amended to regulate the allocation of existing ordinary surpluses and ordinary surpluses that arise after the surplus apportionment date. All ordinary surplus must be applied for the benefit of members. The allocation must be approved by the board of the fund in the proper exercise of their fiduciary duties. The trustees do not have and should not have fiduciary duties to all stakeholders – fiduciary duties are and should be owed to the fund and its members. Clause 15C(1) and (2) must be replaced by the following clauses:

15C. (1) Despite anything contained in the rules of a fund, actuarial surplus arising in the fund after the surplus apportionment date must be applied for the benefit of members. (2) The apportionment shall be approved by the board of the fund in the proper exercise of their fiduciary duties towards the members of the fund:
  Clause 15D Utilisation of surplus for the benefit of members 15D. (1) Notwithstanding anything to the contrary in the rules of a fund, any credit balance in the member surplus account may only be used by the board to
  1. improve benefits for existing members;
  2. improve the benefits previously paid to former members or the amounts previously transferred in respect of former members;
  3. reduce current contributions due from members; and
  4. meet, in full or in part, expenses which would otherwise reduce the proportion of the members' contributions that are invested for retirement.

This clause would become redundant in light of COSATU's proposals that minimum benefits are a member's share of fund and ordinary surplus is proportionally allocated to members and pensioners. It would therefore not be necessary to distinguish for whose benefit surplus will be applied and surplus will not be allocated to surplus accounts.

This clause should be deleted.

Clause 15E Utilisation of surplus for the benefit of the employer –

15E. (1) Notwithstanding anything to the contrary in the rules of a fund, the principal employer or, with the approval of the principal employer, any or all other participating employers, may use actuarial surplus allocated to the employer surplus account in terms of sections 15B and 15C, for any of the following purposes
  1. funding a contribution holiday;
  2. the payment of pensions, or an increase to pensions in course of payment, to compensate members for the loss of any subsidy from the employer of their medical costs after retirement;,
  3. meeting, in full or in part, expenses which the employer is obliged to pay in terms of the rules of the fund;
  4. improving the benefits payable to all, or a category of, members, as determined by the employer;
  5. transferring part, or all, of the employer surplus account to the employer surplus account in another fund where the employer is a participating employer in terms of subsection (2) of this section;
  6. on liquidation of the fund, repatriating to the employer in terms of section 151; and
  7. in order to avoid retrenchment of a significant proportion of the workforce, repatriating to the employer in terms of section 15J.

(2) The registrar may approve the transfer of a portion of the employer surplus account from the fund to the employer surplus account in another fund, provided the following conditions are satisfied, namely, that -

  1. the employer who has control of the employer surplus account in terms of the rules of the fund has similar control of the employer surplus account in the transferee fund;

  2. the transferee fund is either the fund from which some of the assets in the employer surplus account were transferred, or another fund to which assets and liabilities of either this fund or another fund from which assets and liabilities were transferred to this fund have been transferred;
  3. the employer applies to the registrar for approval of the transfer, giving such details and supporting reports as the registrar may require; and

d. the registrar is satisfied that such transfer is necessary in order to achieve an equitable distribution of the surplus between the funds.

 		COSATU is extremely concerned that this clause extinguishes existing rights that members have in terms of the rules of funds and consequently may reduce existing benefits or reasonable benefit expectations. Retirement funds are established and funded for the benefit of members and not employers and these provisions would change the entire nature of funds. COSATU is concerned that the Bill fundamentally changes the nature of retirement funds and has the following consequences –
  1. The employer is elevated to the status of a "beneficiary" of the fund and trustees are required to act in the interests of the employer. This may require trustees to breach their fiduciary duties to the fund and its members;
  2. Employers are given rights to utilise the assets of retirement funds for purposes which these assets, placed in retirement funds, were never intended;

The Bill gives rights to employers to access the assets of funds in an ongoing situation and on termination of the fund, notwithstanding the rules of the fund. In many funds these dramatic and far reaching amendments will reduce the benefits to which members presently have a right or reasonable expectation; This clause will become redundant in light of COSATU's proposals that minimum benefits are a member's share of fund and ordinary surplus is proportionally allocated to members and pensioners. It would therefore not be necessary to distinguish for whose benefit surplus will be applied and surplus will not be allocated to surplus accounts. This clause should thus be deleted.
 

Clause 15F Existing employer reserve accounts

15F. (1) On or after the commencement date, the board of a fund may apply to the registrar to transfer all or some of the credit balance in an existing employer reserve account to the employer surplus account. (2) The registrar may approve such transfer provided that the registrar is satisfied that the allocation of actuarial surplus to such account was negotiated between the stakeholders in a manner consistent with the principles underlying sections 15B and 15C. (3) Any remaining portion of the credit balance in an existing employer reserve account shall be treated as actuarial surplus to be distributed in terms of section 15B. 		This clause would become redundant in light of COSATU's proposals that minimum benefits are a member's share of fund and ordinary surplus is proportionally allocated to members and pensioners. It would therefore not be necessary to distinguish for whose benefit surplus will be applied and surplus will not be allocated to surplus accounts. This clause should be deleted.
 

Clause 15G Right to share in surplus accounts on exit –

15G. (1) Notwithstanding anything to the contrary in the rules of a fund, the board of a fund must consider the degree to which members, who are transferring to another fund or who are leaving the fund with payment of the benefit defined in the rules, should benefit from any credit balances in the member surplus account, investment reserve account and any contingency reserve accounts. (2) Unless the board of the fund considers that it would be inequitable to remaining members, or that there are sound administrative reasons why it should not be done, in which case the board should determine some reasonable alternative, members who transfer out of the fund should receive a share of any credit balances in the member surplus account, and investment reserve account in the ratio that the liability of the fund in respect of the past service of the members transferring bears to the liability of the fund towards all its members in respect of past service at the date of transfer. (3) Notwithstanding anything to the contrary in the rules of a fund, unless the relevant employer so directs, members and former members may not participate in the employer surplus account when they transfer out of a fund or when they become entitled to a benefit.

This clause would become redundant in the light of COSATU' s proposals regarding share of fund (in clause 14A) and the allocation of ordinary surplus (in clause 15C). This clause should therefore be deleted.
 

Clause 15H Use of the contents of any surplus accounts to fund deficits

15H. (1) If a fund has credit balances in any of its reserve accounts or the member surplus account or the employer surplus account and the fund is found to have a deficit following an actuarial valuation, including a valuation carried out for the purpose of distributing assets on liquidation of the fund, such credit balances shall be reduced in the same proportion by the amount of the deficit provided that no credit balance may be reduced by more than the amount to which the account was in credit. (2) If the deficit exceeds the credit balances in the reserve accounts, the member surplus account and the employer surplus account, the credit balances must be applied in full to reduce the deficit and should be reduced to zero.

This clause contradicts COSATU' s proposals regarding share of fund (in clause 14A) and the allocation of ordinary surplus (in clause 15C). Deficits must be funded by the employer in terms of section 18 of the Act. This clause should therefore be deleted.
 

Clause 15I Application of surplus accounts on liquidation of the fund

15I. (1) On liquidation of a fund, any credit balances in any reserve accounts, the member surplus account and the employer surplus account, may be drawn upon to secure the rights and reasonable benefit expectations of the members participating in the distribution: Provided that the credit balances in any such accounts shall be reduced by the same proportion. (2) On liquidation of a fund, any remaining credit balances in the member surplus account, any contingency reserve accounts and any surplus which has not been allocated to the member and employer surplus accounts, must be used for the benefit of the members and former members of the fund, in such manner as the liquidator, acting on the advice of the valuator, shall determine. (3) On liquidation of a fund, any remaining balance in the employer surplus account shall be paid to the employer unless the employer has been liquidated, in which case it shall be distributed amongst the members at date of liquidation and such former members as are eligible in terms of the rules to participate in the distribution.

This clause is redundant in the light of COSATU's proposals regarding share of the fund (in Clause 14A) and share of ordinary surplus on liquidation in terms of clause 15C. This clause should therefore be deleted.

 

Clause 15J Repatriation of actuarial surplus to prevent job losses

15J. (1) A fund may apply to the registrar for permission to repatriate actuarial surplus to an employer where the employer would otherwise have to retrench a significant number of its employees, provided that the negotiations in terms of section 189 of the Labour Relations Act, 1995, as amended from time to time, have confirmed the need for such retrenchments if additional capital is not obtained. (2) The application must be made to the registrar in the prescribed manner. (3) The registrar may only grant an application if the registrar is satisfied that -
  1. members have had full disclosure of the current financial position of the fund including the proposed distribution to the employer, in both cases in Rand, and the need of the employer for additional capital in order to maintain employment;
  2. members have had a reasonable opportunity to consider the proposal;
  3. at least two thirds of the members currently in employment have approved the proposal;
  4. the payment will not prejudice the rights and reasonable benefit expectations of the members;
  5. the payment is necessary in order to avoid a significant reduction in the number of employees employed by the sponsoring employer,
  6. and the registrar must, on being so satisfied, issue a certificate to the applicant to the effect that repatriation of the requested amount may take place.
 		COSATU is prepared to consider an exception to the general principle in cases where there is a genuine danger of job losses, in strictly circumscribed conditions. Sections (1) to (3) should be amended as follows: 15J. (1) A fund may apply to the registrar for permission to [repatriate] allocate actuarial surplus to an employer where the employer would otherwise have to retrench a significant number of its employees, provided that an independent auditor appointed by the fund has certified the extent of the operational requirement and that the negotiations in terms of section 189 of the Labour Relations Act, 1995, as amended from time to time, have confirmed the [need for] necessity of such retrenchments if additional capital is not obtained. (2) The application must be made to the registrar in the prescribed manner. (2A) An application may only be made in respect of actuarial surplus remaining in the fund after former members have been paid their minimum benefits in terms of section 15B. (3) The registrar may only grant an application if the registrar is satisfied that -
  1. members have had full disclosure of the report of the auditor and the current financial position of the fund including the proposed distribution to the employer, in both cases in Rand, and the need of the employer for additional capital in order to maintain employment;
  2. members have had a reasonable opportunity to consider the proposal and have been provided with all the information necessary to make an informed decision regarding their rights and reasonable benefit expectations, including but not limited to, any information that they may require to exercise their rights under the Labour Relations Act, 66 of 1995;
  3. at least [two thirds] seventy five percent of the members currently in employment have approved the proposal in writing;
  4. the payment will not prejudice the rights and reasonable benefit expectations of the members and may not affect the rights and reasonable benefit expectations of former members or pensioners;
  5. the payment is necessary in order to avoid a significant reduction in the number of employees employed by the sponsoring employer,
  6. and the registrar must, on being so satisfied, issue a certificate to the applicant to the effect that repatriation of the requested amount may take place.

 

Clause 15K Specialist tribunal –

15K. (1) Where a board of a fund is unable to reach agreement on the apportionment of an actuarial surplus in terms of section 13, within the prescribed period, or the registrar is not satisfied that the scheme submitted by the board in terms of section 15B is reasonable and equitable, or the registrar considers that unresolved complaints require investigation which may lead to a review of such scheme, the registrar shall appoint a special ad hoc tribunal to perform the functions of the board set out in the said section 15B. (2) The tribunal shall consist of at least three members who must all be independent of any stakeholder in the fund, and of whom -
  1. one must be a lawyer who satisfies the conditions set out in section 30C(2) of this Act, provided that such lawyer may be the Adjudicator; and
  2. one shall be an actuary who has experience in retirement fund financing.

(3) The tribunal shall perform the apportionment within such period as may be determined by the registrar.

(4) Three members of the tribunal shall constitute a quorum.

(5) The tribunal shall elect a chairperson from amongst its members; such chairperson shall have a deliberative vote but no casting vote.

(6) At least two-thirds of the members of the tribunal must agree to any decision or step taken in the performance of the functions of the board of a fund as set out in section 15B.

(7) The tribunal may follow any procedure which it considers appropriate in conducting an investigation, including procedures in an inquisitorial manner, and affording any stakeholder the right to a hearing.

(8) Notwithstanding section 22 of the Financial Services Board Act, 1990 (Act No. 97 of 1990), the tribunal may obtain copies of any document or correspondence contained in the files of the registrar relating to a fund in connection with which the tribunal is conducting an investigation.

(9) (a) For the purposes of an investigation, the tribunal may -

  1. under the hand of the chairperson, summon any person who in the opinion of the tribunal may be able to give material information concerning the subject matter of the investigation or who is believed by the tribunal to have in his or her possession or custody or under his or her control any book, document, record or thing which has any bearing on the subject matter of the investigation, to appear before it at a time and place specified in the summons, to be questioned or to produce that book, document, record, or thing, and may retain for inspection any book, document, record or thing so produced;
  2. through the chairperson administer an oath to, or accept an affirmation from, any person who was summoned under subparagraph (i) and question him or her, and require him or her to produce any book, document, record or thing in his or her possession or custody or under his or her control.

(b) A summons referred to in paragraph (a) shall be served in the same manner as a summons for the attendance of a witness at a civil trial in a magistrate's court.

(c) In connection with the questioning of any person who has been summoned under this section or the production by such person of any book, document, record or thing, the law relating to privilege as applicable to a witness summoned to give evidence or to produce a book, document, record or thing in a civil trial before a court of law shall apply.

(d) (i) Any person who has been summoned in terms of this subsection or who has given evidence before a tribunal shall be entitled to the same witness fees as if he or she had been summoned to attend or had given evidence at a civil trial in a magistrate's court held at the place where the investigation is held.

  1. Any fees which may become payable in terms of subparagraph (i) shall be paid by the fund.

(10) No party shall be entitled to legal representation at proceedings before the tribunal.

(11) The tribunal shall keep or cause to be kept, whether in writing or by mechanical or electronic means, a permanent record of the proceedings relating to the determination of a matter before it including the apportionment of actuarial surplus and any evidence given.

(12) After the tribunal has completed an investigation, it shall send a statement containing its determination and the reasons therefore, signed by the members of the tribunal, to all parties concerned as well as to the registrar.

(13) Any costs arising from the work of the tribunal, including periodical allowances or compensation for personal expenses of the members of the tribunal, shall be recovered from the fund out of the surplus being apportioned, provided that the tribunal satisfies the registrar that such costs were reasonably incurred in the performance of the required functions.".

(14) Any member of the public may obtain a readable copy of the record on payment of a fee determined by the registrar.

(15) The registrar may, for purposes of the performance of his or her functions in terms of this or any other Act, rely on a copy of the record of the tribunal without the need of any further proof.

 		The proposed dispute resolution procedure for disputes relating to surplus apportionment exacerbates the current problems with the resolution of retirement fund disputes. Although COSATU notes the intended advantages of an ad hoc tribunal, it remains concerned about duplication in functions and the dangers of forum shopping. COSATU believes that disputes arising regarding the payment of future and past benefits to members should fall under the jurisdiction of the Adjudicator. This section should be deleted and all dispute resolution should be dealt with in terms of Chapter VA of the Pension Funds Act.


5 Amendment of section 30 - Special Provisions relating to Liquidation of Funds

 

Current provision in the Bill

COSATU's comments and proposals
 

Clause 30(3)

"(3) If a registered fund is terminated or dissolved in terms of sections 28 or 29 ' after the date from which minimum individual reserves are payable on transfer or retrenchment, and the fair value of the assets of the fund, less any current liabilities, is less than the sum of the minimum individual reserves payable in respect of the members and former members who will participate in the distribution of the assets (with appropriate adjustment for benefits previously paid in the case of former members), the shortfall shall represent a debt payable by the employer to the fund."

This clause only protects members if the fund is liquidated after the expiration of the "phase-in" periods in clause 14A(2). The protection should be afforded to all members from the date of commencement of the Act. The clause should therefore be amended as follows: "(3) If a registered fund is terminated or dissolved in terms of sections 28 or 29 ' after [the date from which minimum individual reserves are payable on transfer or retrenchment,] the commencement date of the Act, and the fair value of the assets of the fund, less any current liabilities, is less than the sum of the minimum individual reserves payable in respect of the members and former members who will participate in the distribution of the assets (with appropriate adjustment for benefits previously paid in the case of former members), the shortfall shall represent a debt payable by the employer to the fund."


6 Amendment of clause 30H - Jurisdiction and prescription

Item

Current provision in the Bill

COSATU's comments and proposals
 

Clause 30H(4)

"(4) The Adjudicator shall not have jurisdiction over complaints which relate to the apportionment of surplus in terms of section 15B.".

 This section must be deleted in its entirety in light of COSATU's proposals regarding dispute resolution in clause 15K above.

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