Rules of the - crfund.co.zacrfund.co.za/wp-content/uploads/2019/02/CRF-Consolidated-Rules-vrs... ·...

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

Consolidated Retirement Fund for Local Government Rules: 1 August 2016 _______________________________________________________________________________________________________

_______________________________________________________________________________________________________

Page 2 of 108

Extract from the minutes of a meeting of the Board of Trustees held at Bellville on 8 April

2016


_______________________________________________________________________________________________________

Page 3 of 108

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 APPROVED PENSION PRESERVATION FUND: ________________________ 10 APPROVED PROVIDENT PRESERVATION FUND: ______________________ 10 APPROVED RETIREMENT ANNUITY FUND: __________________________ 11 AUDITOR: ____________________________________________________ 11 BENEFICIARY: _________________________________________________ 11 BOARD OF TRUSTEES: __________________________________________ 11 CITY OF CAPE TOWN: __________________________________________ 11 COMPLAINANT: ________________________________________________ 11 COUNCILLOR: _________________________________________________ 11 COUNCILLOR TRUSTEE: _________________________________________ 12 DEFERRED MEMBER: ___________________________________________ 12 DEPENDANT: __________________________________________________ 12 EFFECTIVE DATE: ______________________________________________ 12 ELIGIBLE CHILD: _______________________________________________ 12 ELIGIBLE SPOUSE: _____________________________________________ 13 EMPLOYEE: ___________________________________________________ 13 EXPECTED PENSION: ___________________________________________ 14 FUND: _______________________________________________________ 14 GROWTH PORTFOLIO: __________________________________________ 14 INSURER: ____________________________________________________ 14 INCOME CONTINUATION BENEFITS: _______________________________ 14 INSURED RISK BENEFIT: ________________________________________ 15 INVESTMENT CONSULTANT: _____________________________________ 15 INVESTMENT MANAGER: ________________________________________ 15 MEMBER: _____________________________________________________ 15 MEMBER’s SHARE: _____________________________________________ 15 MODERATE PORTFOLIO: ________________________________________ 16 MUNICIPAL ELECTIONS _________________________________________ 16 MUNICIPAL MANAGER: __________________________________________ 16 NEW EMPLOYEE: _______________________________________________ 16 NORMAL RETIREMENT AGE: _____________________________________ 17 NORMAL RETIREMENT DATE: ____________________________________ 17 PARTICIPATING EMPLOYER: _____________________________________ 17 PENSION: ____________________________________________________ 17 PENSION FUND: _______________________________________________ 18 PENSIONABLE REMUNERATION: __________________________________ 18 PENSIONER: __________________________________________________ 18


_______________________________________________________________________________________________________

Page 4 of 108

PRESERVATION PENSION ACCOUNT: ______________________________ 18 PREVIOUS SCHEME: ____________________________________________ 18 PRINCIPAL OFFICER: ___________________________________________ 19 PROTECTION PORTFOLIO: _______________________________________ 19 RECOGNISED MATRIMONIAL UNION: ______________________________ 19 REGISTRAR: __________________________________________________ 19 RULES: _______________________________________________________ 19 SERVICE: _____________________________________________________ 20 SHARIAH PORTFOLIO: __________________________________________ 20 TRANSFER VALUE: _____________________________________________ 20 TRUSTEES: ___________________________________________________ 20

2. MANAGEMENT OF THE FUND __________________________________ 21

2.1. INTRODUCTION _______________________________________________ 21 2.2 ELECTION OF TRUSTEES ________________________________________ 21

2.2.1 BOARD OF TRUSTEES MEETINGS ___________________________ 23 2.2.2 OFFICE OF A TRUSTEE ____________________________________ 25

2.3 DUTIES OF THE BOARD OF TRUSTEES ______________________________ 27 2.4 POWERS OF THE BOARD OF TRUSTEES _____________________________ 28

2.4.1 LEGAL ACTIONS _________________________________________ 28 2.4.2 PERSONAL LIABILITY _____________________________________ 29 2.4.3 FIDELITY INSURANCE ______________________________________ 29 2.4.4 INDEMNIFICATION _______________________________________ 30 2.4.5 COMMITTEES ___________________________________________ 30 2.4.6 APPOINTMENT OF OTHER PERSONS _________________________ 31 2.4.7 TRUSTEE COMPENSATION _________________________________ 32

2.5 AMENDMENT TO THE RULES ______________________________ 32

3. PRINCIPAL OFFICER ________________________________________ 33

3.1 APPOINTMENT OF PRINCIPAL OFFICER _____________________________ 33 3.2 DUTIES OF THE PRINCIPAL OFFICER _______________________________ 34 3.3 APPOINTMENT OF DEPUTY PRINCIPAL OFFICER: _____________________ 34

4. GENERAL MEETINGS ________________________________________ 34

5. MEMBERSHIP ______________________________________________ 35

5.1 ELIGIBILITY AND ADMISSION ____________________________________ 35 5.2 SPECIAL PROVISIONS IN RESPECT OF NEW _________________________ 36

EMPLOYEES ___________________________________________________ 36 5.2A SPECIAL PROVISIONS IN RESPECT OF COUNCILLORS _________________ 37 5.3 TERMINATION ________________________________________________ 37 5.4 TERMINATION OF MEMBERSHIP OF A MUNICIPAL MANAGER ___________ 38 5.5 TERMINATION OF MEMBERSHIP OF A COUNCILLOR ___________________ 39

6. FINANCIAL STRUCTURE OF THE FUND ___________________________ 39

6.1 FUND ACCOUNTS ______________________________________________ 39 6.2 COMPOSITION OF ACCOUNTS ____________________________________ 40

6.2.1 Member Share Account ____________________________________ 40 6.2.2 Pensions Account ________________________________________ 42 6.2.3 Reserve Accounts ________________________________________ 44 6.2.3(A) Processing Reserve Account _____________________________ 44 6.2.3(B) Expense Reserve Account ______________________________ 47 6.2.4 Risk Reserve Account _____________________________________ 48


_______________________________________________________________________________________________________

Page 5 of 108

6.2.5 Data Reserve Account _____________________________________ 50

7. CONTRIBUTIONS ___________________________________________ 52

7.1 MEMBER CONTRIBUTIONS _______________________________________ 52 7.2 PARTICIPATING EMPLOYER CONTRIBUTIONS _______________________ 53 7.3 ADDITIONAL VOLUNTARY CONTRIBUTIONS _________________________ 55 7.4 PAYMENT OF CONTRIBUTIONS ___________________________________ 55 7.5 TEMPORARY ABSENCE __________________________________________ 56

8. RETIREMENT ______________________________________________ 57

8.1 NORMAL RETIREMENT __________________________________________ 57 8.2 EARLY RETIREMENT ____________________________________________ 57 8.3 COMPULSORY EARLY RETIREMENT ________________________________ 58 8.4 LATE RETIREMENT _____________________________________________ 59 8.5 COMMUTATION AND PENSION OPTIONS ___________________________ 59

9. DEATH ___________________________________________________ 60

9.1 DEATH PRIOR TO RETIREMENT ___________________________________ 60 CATEGORY A __________________________________________________ 61 CATEGORY B __________________________________________________ 61 CATEGORY C __________________________________________________ 62 CATEGORY D __________________________________________________ 62 CATEGORY E __________________________________________________ 62 CATEGORY F __________________________________________________ 62 CATEGORY G __________________________________________________ 63

9.2 DEATH AFTER RETIREMENT ______________________________________ 63 9.3 FUNERAL BENEFITS ____________________________________________ 65

10. DISABILITY BENEFITS _______________________________________ 65

10.1 LUMPSUM DISABILITY BENEFITS __________________________________ 65 CATEGORY A __________________________________________________ 66 CATEGORY B __________________________________________________ 66 CATEGORY C __________________________________________________ 67 CATEGORY D __________________________________________________ 67 CATEGORY E __________________________________________________ 67 CATEGORY F __________________________________________________ 67 CATEGORY G __________________________________________________ 67

10.2 INCOME DISABILITY BENEFIT ____________________________________ 67 10.2.1 INCOME DISABILITY BENEFITS UP TO 30 JUNE 2002 ___________ 68 10.2.2 INCOME DISABILITY BENEFITS WITH EFFECT

FROM 1 OCTOBER 2009 ___________________________________ 71 10.3 NON INSURED RISK BENEFITS ____________________________________ 72 10.4 DREAD DISEASE BENEFIT ________________________________________ 73

11. WITHDRAWAL _____________________________________________ 73

11.1 WITHDRAWAL BENEFIT _________________________________________ 73 11.2 REDUNDANCY OR RETRENCHMENT ________________________________ 73 11.3 PRESERVATION BENEFIT ________________________________________ 75

12. TRANSFERS FROM OR TO OTHER FUNDS _________________________ 76

13. DEFERRED MEMBERS ________________________________________ 78

14. MISCELLANEOUS PROVISIONS REGARDING BENEFITS ______________ 80


_______________________________________________________________________________________________________

Page 6 of 108

14.1 PAYMENT OF BENEFITS _________________________________________ 80 14.2 PAYMENT OTHER THAN SPECIFIED ________________________________ 81 14.3 PARTICIPATING EMPLOYER’S NOTIFICATION OF REASONS FOR

TERMINATION OF SERVICE ______________________________________ 82 14.4 BENEFIT INSURANCE ___________________________________________ 82 14.5 CESSATION OF INSURED RISK BENEFITS ___________________________ 82 14.6 CONVERSION OPTION: RISK BENEFITS ____________________________ 82 14.7 BENEFITS NON-ASSIGNABLE _____________________________________ 83 14.8 DEDUCTIONS FROM BENEFITS ___________________________________ 83 14.9 INTEREST ON LATE PAYMENT OF BENEFITS _________________________ 85 14.10 UNCLAIMED BENEFITS __________________________________________ 85 14.11 PAYMENT OF PENSIONS _________________________________________ 86 14.12 PENSION INCREASES ___________________________________________ 87

15. HOUSING LOANS ___________________________________________ 88

16. FINANCIAL MATTERS ________________________________________ 88

16.1 EXPENSES ____________________________________________________ 89

17. ACTUARIAL VALUATIONS _____________________________________ 89

18. INVESTMENTS _____________________________________________ 90

18.1 BANK ACCOUNT _______________________________________________ 90 18.2 INVESTMENT PROCEDURES ______________________________________ 91 18.3 GROWTH PORTFOLIO ___________________________________________ 91 18.4 PROTECTION PORTFOLIO _______________________________________ 92 18.5 MODERATE PORTFOLIO _________________________________________ 93 18.6 SHARIAH PORTFOLIO ___________________________________________ 94

19. GENERAL PROVISIONS ______________________________________ 95

19.1 MONIES NOT TO REVERT TO PARTICIPATING EMPLOYER ______________ 95 19.2 COPIES OF DOCUMENTS ________________________________________ 95 19.3 COMPLAINTS __________________________________________________ 96

20. PRESERVATION PENSION ACCOUNT ____________________________ 96

20.1 TRANSFERS INTO THE PRESERVATION PENSION ACCOUNT ____________ 96 20.2 FINANCIAL STRUCTURE OF THE PRESERVATION PENSION ACCOUNT _____ 97 20.3 RETIREMENT __________________________________________________ 98

20.3.1 NORMAL RETIREMENT ____________________________________ 98 20.3.2 EARLY RETIREMENT ______________________________________ 98 20.3.3 COMPULSORY EARLY RETIREMENT __________________________ 99 20.3.4 LATE RETIREMENT ______________________________________ 100 20.3.5 COMMUTATION AND PENSION OPTIONS ____________________ 100

20.4 DEATH ______________________________________________________ 102 20.5 DISABILITY __________________________________________________ 102 20.6 WITHDRAWAL ________________________________________________ 103 20.7 RETRENCHMENT ______________________________________________ 103 20.8 TRANSFERS OUT ______________________________________________ 104 20.9 HOUSING LOANS______________________________________________ 104 20.10 PROTECTION PORTFOLIO ______________________________________ 105 20.11 MODERATE PORTFOLIO ________________________________________ 105 20.12 UNCLAIMED BENEFITS _________________________________________ 105 20.13 COSTS 105 20.14 DEFERRED MEMBERS __________________________________________ 106


_______________________________________________________________________________________________________

Page 7 of 108

21. DISSOLUTION OF FUND _____________________________________ 106


_______________________________________________________________________________________________________

Page 8 of 108

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.


_______________________________________________________________________________________________________

Page 9 of 108

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


_______________________________________________________________________________________________________

Page 10 of 108

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;

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;


_______________________________________________________________________________________________________

Page 11 of 108

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;

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);


_______________________________________________________________________________________________________

Page 12 of 108

COUNCILLOR TRUSTEE:

A COUNCILLOR elected as a TRUSTEE as set out in RULE

2.2(1)(b);

DEFERRED MEMBER:

a member in respect of whom a deferred benefit has been

retained in the FUND, 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;

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;

Added 1 Dec 2017


_______________________________________________________________________________________________________

Page 13 of 108

(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.

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

(b) in receipt of a PENSION if married to the MEMBER when

the MEMBER retired from SERVICE.

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;


_______________________________________________________________________________________________________

Page 14 of 108

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;

FUND:

the CONSOLIDATED RETIREMENT FUND FOR LOCAL

GOVERNMENT;

FUND YEAR:

means from 1 July to 30 June;

GROWTH PORTFOLIO:

a default investment portfolio wherein the MEMBER SHARES and

PRESERVATION PENSION ACCOUNT values are invested of those

MEMBERS who are not invested in other investment portfolios;

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;


_______________________________________________________________________________________________________

Page 15 of 108

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

terms of these RULES by the BOARD OF TRUSTEES from time to

time;

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


_______________________________________________________________________________________________________

Page 16 of 108

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:

an investment portfolio that provides less risk exposure than the

GROWTH PORTFOLIO but more risk than the PROTECTION

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.

Added 1 Aug 2016


_______________________________________________________________________________________________________

Page 17 of 108

This definition will include all employees employed by any

PARTICIPATING EMPLOYER and who elected to join the FUND

since 1 January 2007.

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;

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;

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;

Amended 1 Sept 2018


_______________________________________________________________________________________________________

Page 18 of 108

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;

PRESERVATION PENSION ACCOUNT:

an account which has been set up within the FUND in order to

receive benefits from a PENSION FUND;

PREVIOUS SCHEME:

the transferor fund from which a MEMBER transfers his benefit

into this FUND;


_______________________________________________________________________________________________________

Page 19 of 108

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;

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

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:

the REGISTRAR of PENSION FUNDS appointed in terms of the

Financial Services Board Act, 1990 (Act No. 97 of 1990);

RULES:

these RULES as amended from time to time;


_______________________________________________________________________________________________________

Page 20 of 108

SERVICE:

SERVICE as an EMPLOYEE, or otherwise, of one or more

PARTICIPATING EMPLOYERS depending upon the applicable

conditions of employment;

SHARIAH PORTFOLIO:

an investment portfolio which meets the requirements of Shariah

law;

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;

TRUSTEES:

the individual TRUSTEES who are represented on the BOARD OF

TRUSTEES;

UNCLAIMED BENEFIT:

an unclaimed benefit as defined in the ACT;


_______________________________________________________________________________________________________

Page 21 of 108

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

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;

Amended 1 Dec 2017


_______________________________________________________________________________________________________

Page 22 of 108

(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.

(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.


_______________________________________________________________________________________________________

Page 23 of 108

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.

(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.

Amended 1 Dec 2017


_______________________________________________________________________________________________________

Page 24 of 108

(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.

(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.

Amended 1 Dec 2017

Added 1 Dec 2017


_______________________________________________________________________________________________________

Page 25 of 108

(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;

(f) is found guilty, whether in the Republic of

South Africa or elsewhere of misconduct of

which dishonesty is an element;

Amended 1 Aug 2016

Amended 1 Dec 2017


_______________________________________________________________________________________________________

Page 26 of 108

(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

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

Amended 1 Dec 2017

Amended 1 Dec 2017

Deleted 1 Dec 2017


_______________________________________________________________________________________________________

Page 27 of 108

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;

(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;


_______________________________________________________________________________________________________

Page 28 of 108

(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.

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.


_______________________________________________________________________________________________________

Page 29 of 108

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.

(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.


_______________________________________________________________________________________________________

Page 30 of 108

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.

(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.


_______________________________________________________________________________________________________

Page 31 of 108

(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

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.


_______________________________________________________________________________________________________

Page 32 of 108

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.

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.


_______________________________________________________________________________________________________

Page 33 of 108

(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.

(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.


_______________________________________________________________________________________________________

Page 34 of 108

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.

4. GENERAL MEETINGS

Deleted 1 Dec 2017


_______________________________________________________________________________________________________

Page 35 of 108

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.

(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.


_______________________________________________________________________________________________________

Page 36 of 108

(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.

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.


_______________________________________________________________________________________________________

Page 37 of 108

(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.

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.


_______________________________________________________________________________________________________

Page 38 of 108

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

DEFERRED MEMBER and in such instance the provisions of RULE 13

shall apply mutatis mutandis.

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.

Amended 1 Dec 2017


_______________________________________________________________________________________________________

Page 39 of 108

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.

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


_______________________________________________________________________________________________________

Page 40 of 108

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 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

Added 1 Sep 2016

Amended 1 Sep 2016


_______________________________________________________________________________________________________

Page 41 of 108

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

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

Amended 1 Sep 2016

Amended 1 Sep 2016


_______________________________________________________________________________________________________

Page 42 of 108

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


TRUSTEES in consultation with the ACTUARY.

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 RULE 6.2.1(b)(iii);

Added 1 Sep 2016


_______________________________________________________________________________________________________

Page 43 of 108

(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) such amount paid by the PARTICIPATING

EMPLOYERS to eliminate an actuarial shortfall

in the Pensions Account, as calculated by the

ACTUARY;

(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



(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;

Amended 1 Sep 2016

Amended 1 Sep 2016

Added 1 Sep 2016

Amended 1 Sep 2016


_______________________________________________________________________________________________________

Page 44 of 108

(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;

(v) amounts transferred to the Data Reserve

Account as a result of changes to PENSIONER

data.

(vi) special transfers to the Processing Reserve



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

Amended 1 Sep 2016

Added 1 Sep 2016


_______________________________________________________________________________________________________

Page 45 of 108

Pensions Account and the various Reserve

Accounts.

The following transactions shall be recorded in

the Processing Reserve Account:

(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


(iii) amounts debited to the

PRESERVATION PENSION

ACCOUNT as determined by the



(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;

Amended 1 Sep 2016

Amended 1 Sep 2016

Amended 1 Sep 2016

Amended 1 Sep 2016


_______________________________________________________________________________________________________

Page 46 of 108

(vii) any other income attributable to the

FUND not specified elsewhere in the

RULES.

(b) Debits

(i) amounts transferred to the Member

Share Account as determined by the



(ii) amounts transferred to the Pensions

Account as determined by the



(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



(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.

Amended 1 Sep 2016

Amended 1 Sep 2016

Amended 1 Sep 2016

Added 1 Sep 2016


_______________________________________________________________________________________________________

Page 47 of 108

6.2.3(B) Expense Reserve Account

The Expense Reserve Account has been

established to meet the ongoing FUND expenses.


the Expense Reserve Account:

(a) Credits

a. the amount determined from time

to time which is paid out of the

PARTICIPATING EMPLOYER

contributions to cover FUND

expenses;

b. transfers from the Pensions

Account in terms of RULE

6.2.2(b)(iii) in respect of the

PENSIONER 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.


_______________________________________________________________________________________________________

Page 48 of 108

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;

to account for reinsurance payments to the

FUND and insured death benefits transferred to

the Member Share Account and Pensions

Account.


the Risk Reserve Account:

(a) Credits

(i) an opening balance as determined

by the BOARD OF TRUSTEES in


(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

Amended 1 Sep 2016


_______________________________________________________________________________________________________

Page 49 of 108

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 the BOARD OF


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;

Added 1 Sep 2016

Added 1 Sep 2018


_______________________________________________________________________________________________________

Page 50 of 108

(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 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


Amended 1 Sep 2016

Amended 1 Sep 2016

Added 1 Sep 2016


_______________________________________________________________________________________________________

Page 51 of 108

(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.

(iv) special transfers from the

Processing Reserve Account as

determined by the BOARD OF


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;

Amended 1 Sep 2016

Added 1 Sep 2016

Amended 1 Sep 2016


_______________________________________________________________________________________________________

Page 52 of 108

(iii) special transfers to the Processing

Reserve 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.

(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.

Added 1 Sep 2016


_______________________________________________________________________________________________________

Page 53 of 108

(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

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.


_______________________________________________________________________________________________________

Page 54 of 108

(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.

(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.


_______________________________________________________________________________________________________

Page 55 of 108

(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

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


_______________________________________________________________________________________________________

Page 56 of 108

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

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.

Added 1 Aug 2017


_______________________________________________________________________________________________________

Page 57 of 108

(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.

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.

Amended 1 Aug 2016

Amended 1 Dec 2017


_______________________________________________________________________________________________________

Page 58 of 108

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.

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


_______________________________________________________________________________________________________

Page 59 of 108

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

DEFERRED MEMBER and in such instance the provisions of

RULE 13 shall apply mutatis mutandis.

8.5 COMMUTATION AND PENSION OPTIONS

(1) 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.

Amended 1 Dec 2017

Amended 1 Dec 2017

Amended 1 Sept 2018


_______________________________________________________________________________________________________

Page 60 of 108

(1) 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

utilised to purchase an 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.

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.


_______________________________________________________________________________________________________

Page 61 of 108

(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

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


cost of the lump sum disability benefit as contained in RULE

10.1; plus


_______________________________________________________________________________________________________

Page 62 of 108


OR

CATEGORY C

(a) a lump sum equal to that which can be purchased with two

percent (2%) of PENSIONABLE REMUNERATION; plus


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


OR

CATEGORY F

This category is applicable to MEMBERS who are between ages 65 and

75 years.

Amended 1 Dec 2017


_______________________________________________________________________________________________________

Page 63 of 108


percent (3%) of PENSIONABLE REMUNERATION; plus


OR

CATEGORY G

(a) a lump sum equal to that which can be purchased with 0.6% of

PENSIONABLE REMUNERATION; plus


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

Amended 1 Dec 2017


_______________________________________________________________________________________________________

Page 64 of 108

(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

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.

(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.


_______________________________________________________________________________________________________

Page 65 of 108

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.


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.

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.


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.


_______________________________________________________________________________________________________

Page 66 of 108

(5) A MEMBER eligible to lump sum disability benefits shall be

deemed an ill-health retiree.

(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


percent (3%) of PENSIONABLE REMUNERATION. The three


cost of the lump sum death benefit as contained in RULE 9.1,

plus


OR

CATEGORY B

(a) a lump sum equal to that which can be purchased with five (5)

percent (5%) of PENSIONABLE REMUNERATION. The five


cost of the lump sum death benefit as contained in RULE 9.1,

plus


OR


_______________________________________________________________________________________________________

Page 67 of 108

CATEGORY C


OR

CATEGORY D


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


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


_______________________________________________________________________________________________________

Page 68 of 108

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.

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


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


_______________________________________________________________________________________________________

Page 69 of 108

granted the MEMBER an additional PENSION such

that the total PENSION would equal 75% of the


time. The specified conditions are as follows:

(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.


_______________________________________________________________________________________________________

Page 70 of 108

(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.

(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.


_______________________________________________________________________________________________________

Page 71 of 108

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

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:


_______________________________________________________________________________________________________

Page 72 of 108

(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.

(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


_______________________________________________________________________________________________________

Page 73 of 108

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

(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.


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, an amount comprising the MEMBER’s SHARE shall be paid

to him.

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


_______________________________________________________________________________________________________

Page 74 of 108

having been declared redundant or having been retrenched, on receipt

of advice from the PARTICIPATING EMPLOYER, he shall be entitled to

receive a lump sum benefit comprising:

(1) the MEMBER’s SHARE;

PLUS



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


_______________________________________________________________________________________________________

Page 75 of 108

for in their contract of SERVICE or terms of engagement. Such

MEMBER who is not entitled to the provisions of sub rule (2)

shall receive their MEMBER’s SHARE as described in sub rule

(1).

11.3 PRESERVATION BENEFIT

(1) A MEMBER may elect to preserve any part of his benefit

entitlement in terms of RULES 11.1 and 11.2 above that he

does not take in cash.

(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 DEFERRED MEMBER of the

FUND in terms of RULE 13.


_______________________________________________________________________________________________________

Page 76 of 108

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.

(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.

(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;


_______________________________________________________________________________________________________

Page 77 of 108

(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

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 DEFERRED 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.


_______________________________________________________________________________________________________

Page 78 of 108

(a) the MEMBER may elect to receive the MEMBER’s SHARE as a cash

lump sum benefit, subject to the provisions of the transfer

agreement and transfer arrangements between the old and new

employers.

(b) the MEMBER will have the option to transfer his MEMBER’s SHARE

to the retirement fund of the new employer, subject to the

transfer provisions agreed to by the old and new employers.

(c) subject to the provisions of the transfer provisions between the old

and new employers, the MEMBER may elect to 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 DEFERRED MEMBER of the

FUND.

13. DEFERRED MEMBERS

A MEMBER who leaves the FUND under certain circumstances described in these

RULES may elect to defer his 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

Amended 1 Sep 2016


_______________________________________________________________________________________________________

Page 79 of 108

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) If a member becomes a DEFERRED MEMBER in terms of these RULES he

shall become entitled to receive on attainment of the NORMAL

RETIREMENT AGE, a retirement benefit calculated and payable in terms

of RULE 8.

(f) On the death of a DEFERRED MEMBER, the MEMBER’S SHARE shall be

payable in terms of RULE 9.1.

(g) Should the DEFERRED MEMBER elect to terminate his membership of the

FUND prior to NORMAL RETIREMENT AGE, the MEMBER’sS SHARE

calculated as at the date of exit will become payable.

(h) The DEFERRED MEMBER may elect to retire from the FUND after his

NORMAL RETIREMENT DATE, subject to the provisions relating to the

maximum retirement age in terms of income tax legislation. The

MEMBER’s SHARE calculated at the date of such late retirement will

become payable.

(i) Should a DEFERRED MEMBER have deferred his benefit in the

PRESERVATION PENSION ACCOUNT, such benefit shall be paid together

with the MEMBER’s SHARE in accordance with the preceding RULES,

except where the MEMBER is retiring from the FUND. In such instance,

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.


_______________________________________________________________________________________________________

Page 80 of 108

(j) The provisions of these RULES regarding the regular repayment of a

housing loan will continue to apply to a DEFERRED MEMBER. Failure to

make regular repayments will result in the Financial Institution requesting

full payment 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.

(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


_______________________________________________________________________________________________________

Page 81 of 108

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

(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.

Added 1 Aug 2016


_______________________________________________________________________________________________________

Page 82 of 108

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.

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 or a DEFERRED MEMBER. A MEMBER

may convert all or part of this cover to an individual policy with the


_______________________________________________________________________________________________________

Page 83 of 108

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.

(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


_______________________________________________________________________________________________________

Page 84 of 108

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.

(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


_______________________________________________________________________________________________________

Page 85 of 108

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

payable such benefit shall be transferred to an APPROVED

PROVIDENT 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 PROVIDENT PRESERVATION

FUND and such MEMBER or BENEFICIARY subsequently claims

Amended 1 Sep 2016

Amended 1 Sep 2016


_______________________________________________________________________________________________________

Page 86 of 108

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 PROVIDENT

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.

(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,

Amended 1 Sep 2016


_______________________________________________________________________________________________________

Page 87 of 108

(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.

(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 INCREASES

(1) PENSIONS may be increased from time to time at a rate

determined by the BOARD OF TRUSTEES after consultation with


_______________________________________________________________________________________________________

Page 88 of 108

the ACTUARY and in accordance with the PENSIONER increase

policy and the provisions of the ACT.

(2) 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.

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.


_______________________________________________________________________________________________________

Page 89 of 108

(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

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 and DEFERRED 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.


_______________________________________________________________________________________________________

Page 90 of 108

(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.

(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.


_______________________________________________________________________________________________________

Page 91 of 108

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.

(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 FUND’s investment policy statement.

18.3 GROWTH PORTFOLIO

(1) The FUND makes provision for a default investment portfolio

wherein the MEMBER SHARES and the PRESERVATION


_______________________________________________________________________________________________________

Page 92 of 108

PENSION ACCOUNT values are invested in respect of all

MEMBERS who are not invested in any other portfolio.

(2) MEMBERS may transfer their MEMBER SHARE or

PRESERVATION PENSION ACCOUNT to the PROTECTION

PORTFOLIO or the MODERATE PORTFOLIO on the terms and

conditions contained in the TRUSTEE GUIDELINES, PROTOCOL

AND POLICY.

18.4 PROTECTION PORTFOLIO

(1) The FUND makes provision for a separate PROTECTION

PORTFOLIO, which accord with the FUND’S investment

strategy;

(2) The terms and conditions applicable to the PROTECTION

PORTFOLIO shall be determined by the BOARD OF TRUSTEES

from time to time;

(3) The conditions and administrative processes that are applicable

to participation in the PROTECTION PORTFOLIO shall be

maintained in a separate TRUSTEE GUIDELINES, PROTOCOL

AND POLICY;

(4) These conditions and administrative processes will be

communicated to MEMBERS from time to time and the FUND will

require adherence to the applicable conditions. The failure of

MEMBERS to comply with the relevant conditions and

administrative processes will result in participation and / or

transfer out requests not being applied by the FUND;

(5) Neither the FUND nor the BOARD OF TRUSTEES shall be liable

for any loss or prejudice suffered by or in respect of a MEMBER

as a result of an election by the MEMBER to participate in the

PROTECTION PORTFOLIO;


_______________________________________________________________________________________________________

Page 93 of 108

(6) MEMBERS wishing to participate in the PROTECTION PORTFOLIO

should seek advice prior to making an election to transfer to such

portfolio;

(7) Any disinvestments from this investment portfolio shall coincide

with the events stipulated in RULES 8, 9, 10, 11, 12, 13 and 20

and shall be subject to any other conditions set out in the

underlying investment policy and agreement with the asset

manager(s).

18.5 MODERATE PORTFOLIO

(1) The FUND makes provision for a separate flexible investment

portfolio, which accords with the FUND’S investment strategy;

(2) The terms and conditions applicable to the MODERATE

PORTFOLIO shall be determined by the BOARD OF TRUSTEES

from time to time;


to participation in the MODERATE PORTFOLIO shall be

maintained in a separate TRUSTEE GUIDELINES, PROTOCOL

AND POLICY;










_______________________________________________________________________________________________________

Page 94 of 108


MODERATE PORTFOLIO;

(6) MEMBERS wishing to participate in the MODERATE PORTFOLIO


Investment Portfolio;





manager(s).

18.6 SHARIAH PORTFOLIO

(1) The FUND makes provision for a separate Shariah compliant

investment portfolio, which accords with the FUND’S investment

strategy;

(2) The terms and conditions applicable to the SHARIAH PORTFOLIO

shall be determined by the BOARD OF TRUSTEES from time to

time;


to participation in the SHARIAH PORTFOLIO shall be maintained

in a separate TRUSTEE GUIDELINES, PROTOCOL AND POLICY;








_______________________________________________________________________________________________________

Page 95 of 108




SHARIAH PORTFOLIO;

(6) MEMBERS wishing to participate in the SHARIAH PORTFOLIO


Investment Portfolio;





manager(s).

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.


_______________________________________________________________________________________________________

Page 96 of 108

(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.

(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.


_______________________________________________________________________________________________________

Page 97 of 108

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;

(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;

Amended 1 Sep 2016

Added 1 Sep 2016

Amended 1 Sep 2016


_______________________________________________________________________________________________________

Page 98 of 108

(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.

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

Amended 1 Aug 2016

Added 1 Sep 2016


_______________________________________________________________________________________________________

Page 99 of 108

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:

(1) the benefit in the PRESERVATION PENSION

ACCOUNT, plus



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


_______________________________________________________________________________________________________

Page 100 of 108

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.

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


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


_______________________________________________________________________________________________________

Page 101 of 108

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.

(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.


_______________________________________________________________________________________________________

Page 102 of 108

(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.

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

ACCOUNT shall also be payable. The value of the PRESERVATON

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.


_______________________________________________________________________________________________________

Page 103 of 108

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.

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


_______________________________________________________________________________________________________

Page 104 of 108

(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


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.

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.


_______________________________________________________________________________________________________

Page 105 of 108

20.10 PROTECTION PORTFOLIO

In addition to the MEMBER’s SHARE which may be transferred to the

PROTECTION PORTFOLIO in terms of RULE 18.4, a MEMBER may elect

to transfer the whole or a portion of his PRESERVATION PENSION

ACCOUNT to the PROTECTION PORTFOLIO on the conditions mentioned

in RULE 18.4.

20.11 MODERATE PORTFOLIO

In addition to the MEMBER’s SHARE which may be transferred to the

MODERATE PORTFOLIO in terms of RULE 18.5, a MEMBER may elect to

transfer the whole or a portion of his PRESERVATION PENSION

ACCOUNT to the MODERATE PORTFOLIO on the conditions mentioned

in RULE 18.5.

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.

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


_______________________________________________________________________________________________________

Page 106 of 108

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.

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.


_______________________________________________________________________________________________________

Page 107 of 108

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.

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.


_______________________________________________________________________________________________________

Page 108 of 108

(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.

Date post:	09-Feb-2019
Category:	Documents
Upload:	vuongnguyet
View:	214 times
Download:	0 times