Municipal Workers' Retirement Fund v Financial Sector Conduct Authority and Another (1094/2018) [2020] ZAGPPHC 68 (3 March 2020)

Municipal Workers' Retirement Fund v Financial Sector Conduct Authority and Another (1094/2018) [2020] ZAGPPHC 68 (3 March 2020)

The court held that section 7A(1) of the Pension Funds Act does not require only direct election of trustees by fund members; indirect election, where fund members elect representatives who in turn elect trustees, also satisfies the statutory requirement. The purpose of the provision is to ensure that fund members...

Source-derived case information.

Citation
[2020] ZAGPPHC 68
Parties
Applicant: Municipal Workers' Retirement Fund; Respondent: Financial Sector Conduct Authority; Respondent: Financial Services Board
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
3 March 2020
Case Number
1094/2018
Procedural Posture
Review Application / Judgment
Outcome
Application granted. Declaratory order issued confirming compliance with section 7A(1) of the Pension Funds Act. Costs awarded to the applicant.
Judges
A C Basson
Legal Topics
Pension Funds Act, Board Composition, Exemption From Statutory Requirements, Declaratory Relief
Administrative Law Banking and Finance Pension Funds Act Board Composition Exemption From Statutory Requirements Declaratory Relief

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Summary, issues, holding and outcome

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Parties

Municipal Workers' Retirement Fund

Applicant

Financial Sector Conduct Authority

Respondent

Financial Services Board

Respondent

Procedural Posture

Review Application / Judgment

Legal Issues

  1. 1 Does the applicant's board of trustees comply with section 7A(1) of the Pension Funds Act regarding election by fund members.
  2. 2 Is the exemption granted by the first respondent, limited in time, lawful under section 78(1)(b)(i) of the Pension Funds Act.
  3. 3 Does section 7A(1) of the Pension Funds Act permit indirect election of board members by fund members.

Ratio Decidendi

The court held that section 7A(1) of the Pension Funds Act does not require only direct election of trustees by fund members; indirect election, where fund members elect representatives who in turn elect trustees, also satisfies the statutory requirement. The purpose of the provision is to ensure that fund members have at least equal say in the governance of the fund, and this can be achieved through various election mechanisms. The applicant's board, as constituted, meets the requirement that at least 50% of trustees are elected by fund members, whether directly or indirectly. The court found that the applicant is compliant with section 7A(1) and does not require an exemption under...

Court Disposition

Application granted. Declaratory order issued confirming compliance with section 7A(1) of the Pension Funds Act. Costs awarded to the applicant.

Orders

  • It is declared that the applicant's board of trustees, as presently constituted, complies with section 7A(1) of the Pension Funds Act.
  • The respondents are jointly and severally ordered to pay the costs of the application, including the costs of two counsel.