Government Employees Pension Law, 1996

Annexure 2 : Government Employees Pension Law Transitional Provisions

4. Human resources arrangements

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(1)A person in the employ of an authority of body responsible by law for the management and administration of a fund referred to in section 3(1) or (2) on the day preceding the fixed date, shall, as from the fixed date, continue to perform his or her duties, on such terms and conditions as agreed upon by the Board and the Minister but not for a period longer than 12 months after the fixed date.

 

(2)A person in the employ of an authority of body responsible by law for the management and administration of a fund referred to in sections 3(1) and (2) above shall, notwithstanding the provisions of the Law or the provisions of any other law, but subject to the provisions of the acts governing such person's employment and conditions of service, with his or her written consent, on such terms and conditions as agreed upon in negotiations, be transferred and appointed to the administration instituted by the Board in terms of section 7 of the Law, from a date determined by the Minister of Finance in consultation with the Board, and as from that date he of she shall be deemed to have been appointed in terms of section 7(1) of the Law in an applicable position in the said administration:  Provided that—
(a)his or her salary and salary scale and other conditions of service in the employ of the administration instituted by the Board and his or her terms and conditions of employment in respect of the post to be occupied, shall not be less favourable than the salary or salary scale and conditions of service which was applicable to him or her before his or her date of transfer as a person employed by such authority;
(b)any sick or vacation leave which stood to the credit of such person immediately prior to his or her date of transfer and appointment to the administration instituted by the Board, shall be deemed to be leave credited to him or her in the employ of such administration. Accrued vacation leave with full pay shall be regarded as a right and which accumulated vacation leave with full pay or the remainder of such leave, shall be discounted in full to such personnel in their own right or their beneficiaries or their estate in the event of the termination of their service for whatsoever reasons;
(c)if applicable, pensionable service performed or bought back by such person before his or her date of appointment to the administration instituted by the Board shall be deemed to be pensionable service performed by him or her in the service of such administration;
(d)no person shall as a consequence of such appointment acquire a retirement age which is higher than that which applied to him or her as a person employed by such authority or body before such transfer; and
(e)probationary appointment shall not apply to any person who in terms of subsection (2) is appointed to the administration instituted by the Board and whose appointment was confirmed by an authority contemplated in section 3(1) or (2).

 

(3)The salary, salary scale and other conditions of service contemplated in subsection (2), shall, subject to negotiations and conclusion of agreements, not be altered without the written consent of the person concerned, and such salary and salary scale shall for two ensuing years from the date contemplated in subsection (2) not be less favourable than the salary and salary scales for relevant personnel in the Public Service.

 

(4)A person contemplated in subsection (1) who is a member of the Government Service Pension Fund or the Temporary Employees Pension Fund or a previous fund or the Fund or any other relevant fund who is appointed to the administration instituted by the Board shall, before a date determined by the Minister, in consultation with the Board, if applicable, exercise an option to—
(a)remain a member of such fund; or
(b)become if applicable a dormant member of the fund concerned as contemplated in section 15 of the General Pensions Act, 1979, and become a member of a pension fund referred to in subparagraph (c) or (d) or approved retirement annuity fund referred to in paragraph (e); or
(c)become a member of an own pension fund if such a pension fund is, subject to negotiations and in accordance with the agreement reached, established by the Board;
(d)become a member of the Fund if a pension fund referred to in subparagraph (c) is not established by the Board;
(e)become a member of an approved retirement annuity fund of his or her choice if an own fund is not established by the Board.

 

(5)Subject to subsection (11), the obligation of a pension fund contemplated in subsection (4)(c) or (e) to any person on the date on which he or she becomes a member of such fund, shall in respect of his or her previous pensionable service referred to in subsection (2)(c) above, not be less than the sum of the amounts referred to in subsection (7) and (8).

 

(6)In the case where a person becomes a member of a pension fund referred to in subsection (4) (c) or approved retirement annuity fund referred to in subsection (4)(e) and who was a member of the Government Service Pension Fund or the Temporary Employees Pension Fund or a previous fund or the Fund immediately prior to his or her appointment to the administration instituted by the[sic] Board, he or she shall—
(a)cease to be a member of the pension fund concerned;
(b)except in respect of any amount which was due by him or her to the pension fund concerned immediately prior to his or her date of appointment be released from all obligations towards, and shall relinquish all rights and privileges in respect of the pension fund concerned;
(c)subject to the provisions of the rules become a member of a fund referred to in subsection (4)(c) or (e) with effect from the date of his or her appointment; and
(d)with effect from the date of his or her appointment contribute to a fund referred to in subsection (4)(c) or (e) as provided by the rules of such fund.

 

(7)Notwithstanding anything to the contrary in any law contained—
(a)the Government Service Pension Fund or the Temporary Employees Pension Fund or a previous fund or any relevant fund shall, in respect of a person contemplated in subsection (1) who is a member of one of these funds and who elects to become a member of an own pension fund, in terms of subsection (4)(c), if such a fund is established by the Board or an approved retirement annuity fund referred to in subsection (4)(e), make an amount, whether in cash or in specie, equal to the funding percentage of the pension fund concerned multiplied by the actuarial obligation of the pension fund concerned in respect of that person on the date of his or her appointment, plus interest thereon calculated at the bank rate from his or her date of appointment until the date on which the said amount is paid, available to the member:  Provided that the member shall undertake to deposit the full amount plus any interest thereon, immediately into the own established pension fund or approved retirement annuity fund:  Provided further that such member, whilst employed by the Board, shall not be entitled to any benefits from the aforesaid own established fund; and
(b)the employer concerned shall pay to the own pension fund of the Fund or approved retirement annuity fund an amount equal to the difference between the actuarial liability if the pension fund concerned and the amount paid in terms of paragraph (a), plus interest calculated at the bank rate from the date of his or her transfer to the date of payment.

 

(8)For purposes of subsection (7)—
(a)"actuarial obligation"

means the actuarial obligation of the pension fund concerned with regard to the member concerned on the date of his or her appointment, as calculated by an actuary;

(b)"funding percentage"

means the market value of the net assets of the pension fund concerned on the date of his or her appointment, expressed as a percentage of the calculated aggregate actuarial obligation of the pension fund concerned on the date of his or her appointment, as determined by an actuary; and

(c)"bank rate"

means the rate determined from time to time in terms of section 10(2) of the South African Reserve Bank Act, 1989 (Act No. 90 of 1989).

 

(9)The provisions of subsection (7) shall mutatis mutandis apply to an employee who under subsection (4) (b) elected to be a dormant member and, at a later stage, elects to have his or her accrued pension benefits transferred to the own pension fund contemplated in subsection (4)(c) or approved retirement pension fund contemplated in subsection (4)(e) in accordance with subsection (7) and (8).

 

(10)Notwithstanding the provisions of subsection (2), those persons who elected not to be transferred and appointed to the administration instituted by the Board may, after the period contemplated in subsection (1) subject to their acts of employment be seconded to the administration instituted by the Board.

 

(11)In the event of a defined contribution fund, the pension entitlement in the case of the termination of service of a member referred to in subsection (2) in respect of pensionable service referred to in subsection (2)(c), shall be his or her accrued benefits in such fund.

 

(12)The authorities contemplated in section 3(1) and (2) and the Board shall comply with the terms and conditions of any transfer and appointment in terms of section 4(2) and such authorities and the Board shall offer any person concerned employment on the terms as were agreed upon by the relevant parties in the Departmental Chamber (Finance) of the Public Service Bargaining Council.