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Labour Relations Act, 1995 (Act No. 66 of 1995)

Schedules

Schedule 7 : Transitional Arrangements

Part F : Pension Matters

23. Continuation of existing Pension rights of staff members of Commission upon assuming employment

 

(1) Any staff member of the Commission who, immediately before assuming employment with the Commission, is a member of the Government Service Pension Fund, the Temporary Employees Pension Fund or any other pension fund or scheme administered by the Department of Finance (hereinafter referred to as an officer or employee), may upon assuming that employment—
(a) choose to remain a member of that pension fund, and from the date of exercising the choice, the officer or employee, despite the provisions of any other law, will be deemed to be a dormant member of the relevant pension fund within the contemplation of section 15(1 )(a) of the General Pensions Act, 1979 (Act No. 29 of 1979);
(b) request to become a member of the Associated Institutions Pension Fund established under the Associated Institutions Pension Fund Act, 1963 (Act No. 41 of 1963), as if the Commission had been declared an associated institution under section 4 of that Act; or
(c) request to become a member of any other pension fund registered under the Pension Funds Act, 1956 (Act No. 24 of 1956).

 

(2) In the case where an officer or employee becomes a member of a fund after making a request in terms of sub-item (1)(b) or (c)—
(a) the pension fund of which the officer or employee was a member ("the former fund") must transfer to the pension fund of which the officer or employee becomes a member of ( "the new fund" ) an amount equal to the funding level of the former fund multiplied by its actuarial liability in respect of that officer or employee at the date the officer or employee assumes office with the Commission, increased by the amount of interest calculated on that amount at the prime rate of interest from the date when employment with the Commission commenced up to the date of transfer of the amount;
(b) membership of the officer or employee of the former fund will lapse from the date when employment with the Commission commenced, and from that date the officer or employee will cease to have any further claim against the former fund except as provided in paragraph (a); and
(c) the former fund must transfer any claim it may have against the officer or employee, to the new fund.

 

(3) In the case where an officer or employee becomes a member of a new fund after a request in terms of sub-item (1)(c) the State must pay the new fund an amount equal to the difference between the actuarial liability of the former fund in respect of the officer or employee as on the date of the commencement of employment with the Commission, and the amount transferred in terms of sub-item (2)(c) to the new fund, increased by the amount of interest thereon calculated at the prime rate from the date of commencement of employment up to the date of the transfer of the amount.

 

(4) Sub-items (2) and (3) will apply, read with the changes required by the context, in respect of any officer or employee who, by reason of having made a choice in terms of sub-item (1)(a), has become a dormant member and thereafter requests that the pension benefits that had accrued, be transferred in terms of section 15A(1) of the General Pensions Act, 1979, to another pension fund referred to in that Act or a pension fund registered in terms of the Pension Funds Act, 1956.

 

(5) If, after an officer or employee has become a member of any other pension fund, by reason of having made a choice in terms of sub-item (1)(c), a lump sum benefit has become payable by that pension fund by reason of the death, or the withdrawal or resignation from the pension fund, or retirement, of the officer or employee, or the winding-up of the pension fund, then, for the purposes of paragraph (e) of the definition of "gross income" in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962), the pension fund will be deemed, in relation to such officer or employee, to be a fund referred to in paragraph (a) of the definition of "pension fund" in section 1 of that Act.

 

(6) For the purposes of this item—

 

"actuarial liability"

of a pension fund in respect of a particular member or a group of members of the fund, means the actuarial liability that is determined by an actuary who the Minister has nominated for that purpose;

 

"funding level",

in relation to a pension fund, means the market value of the assets of the fund stated as a percentage of the total actuarial liability of the fund, after those assets and liabilities have been reduced by the amount of the liabilities of the fund in respect of all its pensioners, as determined at the time of the most recent actuarial valuation of the fund or any review thereof carried out under direction of the responsible Minister; and

 

"prime rate of interest"

means the average prime rate of interest of the three largest banks in the Republic.