Municipal Employees Pension Fund and Another v SAMWU National Provident Fund and Another (1412/2018) [2019] ZASCA 42 (29 March 2019)

Municipal Employees Pension Fund and Another v SAMWU National Provident Fund and Another (1412/2018) [2019] ZASCA 42 (29 March 2019)

The Supreme Court of Appeal held that rule 3.2.1 of the Fund unambiguously prohibits members from withdrawing from the Fund while they remain in service with the Municipality. Section 13A(5) of the Pension Funds Act only permits transfer of benefits after membership has ceased in accordance with the Fund's rules,...

Source-derived case information.

Citation
[2019] ZASCA 42
Parties
Appellant: Municipal Employees Pension Fund; Appellant: Akani Retirement Fund Administrators (Pty) Ltd; Respondent: SAMWU National Provident Fund; Respondent: Ntabankulu Local Municipality
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 March 2019
Case Number
1412/2018
Procedural Posture
Civil Appeal / Appeal From Eastern Cape Division of the High Court, Mthatha
Outcome
Appeal dismissed with costs, including costs of two counsel. Paragraph 2 of the order of the court a quo was amended to direct only the first respondent to pay arrear pension contributions.
Judges
Lewis, Tshiqi, Swain, Van der Merwe, Dlodlo
Legal Topics
Pension Fund Rules, Termination of Membership, Transfer of Benefits, Freedom of Association, Income Tax Act Compliance
Civil Procedure Commercial and Corporate Pension Fund Rules Termination of Membership Transfer of Benefits Freedom of Association Income Tax Act Compliance

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Parties

Municipal Employees Pension Fund

Appellant

Akani Retirement Fund Administrators (Pty) Ltd

Appellant

SAMWU National Provident Fund

Respondent

Ntabankulu Local Municipality

Respondent

Procedural Posture

Civil Appeal / Appeal From Eastern Cape Division of the High Court, Mthatha

Legal Issues

  1. 1 Whether employees of the Ntabankulu Municipality validly terminated their membership of the SAMWU National Provident Fund while remaining in service with the Municipality.
  2. 2 Whether the rules of the Fund prohibit elective in-service cessation of membership.
  3. 3 Whether rule 3.2.1 infringes the constitutional rights to freedom of association and freedom of trade.

Ratio Decidendi

The Supreme Court of Appeal held that rule 3.2.1 of the Fund unambiguously prohibits members from withdrawing from the Fund while they remain in service with the Municipality. Section 13A(5) of the Pension Funds Act only permits transfer of benefits after membership has ceased in accordance with the Fund's rules, and section 14 does not apply to individual voluntary withdrawals. The rules are consistent with the requirements of the Income Tax Act for provident fund approval and serve to ensure the stability and viability of the Fund. The constitutional challenges were rejected: compulsory membership for financial reasons does not infringe the right to freedom of association, and the MEPF,...

Court Disposition

Appeal dismissed with costs, including costs of two counsel. Paragraph 2 of the order of the court a quo was amended to direct only the first respondent to pay arrear pension contributions.

Orders

  • Paragraph 2 of the order granted on 14 August 2018 is deleted and replaced with: 'The first respondent is directed to pay to the applicant all arrear pension contributions pertaining to the employees listed in annexure SAM3 which have been withheld from it since September 2013 to date.'
  • The appeal is dismissed with costs, including the costs of two counsel.