Pension Funds Act, 1956 (Act No. 24 of 1956)Chapter I : Administration and Application of Act and Interpretation of Terms1. Definitions |
| (1) | In this Act, unless the context indicates otherwise— |
in relation to a fund which is—
| (a) | subject to actuarial valuation, means the difference between— |
| (i) | the value, calculated in accordance with the prescribed basis, if any, that the valuator has placed on the assets of the fund less any credit balances in the member and employer surplus accounts; and |
| (ii) | the value that the valuator has placed on the liabilities of the fund in respect of pensionable service accrued by members prior to the valuation date plus the amounts standing to the credit of those contingency reserve accounts which are established or which the board deems prudent to establish on the advice of the valuator, calculated in accordance with the prescribed basis, if any; |
| (b) | valuation exempt, means the difference between— |
| (i) | the fair value of the assets of the fund less any credit balances in the member and employer surplus accounts; and |
| (ii) | the sum of the values of the amounts standing to the credit of all the accounts held for individual members, whether contributory or paid-up, plus the value of any other liabilities plus the amounts standing to the credit of any investment reserve account set up to facilitate the smoothing of fund return credited to member accounts and such contingency reserve accounts which are established or which the board deems prudent to establish: |
Provided that, for the purpose of quantifying the actuarial surplus in terms of section the surplus utilised improperly by the employer in terms of section 15B(6) shall be added to the difference calculated in paragraph (a) or (b), as the case may be;
[Definition amended by section 1(a) and (b) of Act No. 45 of 2013]
means a natural person admitted as a fellow member of the Actuarial Society of South Africa or any other institution approved by the registrar by notice in the Gazette;
[Definition amended by section 1(c) of Act No. 45 of 2013]
means the Pension Funds Adjudicator or Deputy Pension Funds Adjudicator and any acting Pension Funds Adjudicator appointed under section 30C(1);
[Definition deleted by section 1(b) of Act No. 22 of 2008]
means a person approved by the registrar in terms of section 13B(1);
[Definition deleted by section 1(d) of Act No. 45 of 2013]
means a fund which has been exempted by the registrar in terms of section 2(5)(a) from being required to be subject to audit;
"Authority"
means the Financial Sector Conduct Authority established in terms of section 56 of the Financial Sector Regulation Act;
[Definition inserted by section 290, item 1(a) in Schedule 4, of Notice No. 853 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018)]
"beneficiary"
means a nominee of a member or a dependant who is entitled to a benefit, as provided for in the rules of the relevant fund;
means a fund referred to in paragraph (c) of the definition of "pension funds organisation";
in relation to a fund, means any amount payable to a member or beneficiary in terms of the rules of that fund;
means the board of a fund contemplated in section 7A of this Act;
means any member of a board;
means the date of commencement of the Pension Funds Second Amendment Act, 2001;
means the Companies Act, 2008 (Act No. 71 of 2008);
[Definition inserted by section 1(e) of Act No. 45 of 2013]
means—
| (a) | any person who is, or who claims to be— |
| (i) | a member or former member of a fund; |
| (ii) | a beneficiary or former beneficiary of a fund; |
| (iii) | an employer who participates in a fund; |
| (iv) | a spouse or a former spouse of a member or former member, of a fund; |
| (b) | any group of persons referred to in paragraph (a)(i), (ii), (iii) or (iv); |
| (c) | a board of a fund or member thereof; or |
| (d) | any person who has an interest in a complaint; |
[Definition amended by section 1(f) of Act No. 45 of 2013]
"conduct standard"
has the same meaning ascribed to it in terms of section 1(1) of the Financial Sector Regulation Act;
[Definition inserted by section 290, item 1(b) in Schedule 4, of Notice No. 853 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018)]
means a complaint of a complainant relating to the administration of a fund, the investment of its funds or the interpretation and application of its rules, and alleging—
| (a) | that a decision of the fund or any person purportedly taken in terms of the rules was in excess of the powers of that fund r person, or an improper exercise of its powers; |
| (b) | that the complainant has sustained or may sustain prejudice in consequence of the maladministration of the fund by the or any person, whether by act or omission; |
| (c) | that a dispute of fact or law has arisen in relation to a fund between the fund or any person and the complainant; or |
| (d) | that an employer who participates in a fund has not fulfilled its duties in terms of the rules of the fund; |
but shall not include a complaint which does not relate to a specific complainant;
in relation to a fund, means an account provided for in the rules of the fund, which has been amended in accordance with the requirements of the registrar, or which has not been disallowed by the registrar, and to which shall be credited or debited such amounts as the board shall determine, on the advice of the valuator where the fund is not valuation exempt, in order to provide for a specific category of contingency;
[Definition amended by section 1(g) of Act No. 45 of 2013]
in relation to a—
| (a) | defined benefit category of a means payment by the employer of less than the contribution rate the valuator recommends be payable by the employer, taking into account the circumstances of the fund and ignoring any surplus or deficit; or |
| (b) | defined contribution category of a fund, means payment by the employer of less than the employer contribution rate defined in the rules prior to application of any credit balance in any employer reserve account as in the rules or employer surplus account; |
in relation to a category of a fund, means the change of the basis of the retirement benefit from defined benefit to defined contribution, or vice versa;
means a court of the provincial or local division of the High Court of South Africa;
"deferred pensioner"
means a member who has not yet retired but has left the service of the employer concerned prior to normal retirement date, as defined in the rules, leaving in the fund the member's rights to such benefits as may be defined in the rules;
means a category of a fund other than a defined contribution category of a fund;
means a category of members whose interest in the fund has a value at least equal to—
| (a) | the contributions paid by the member and by the employer in terms of the rules of the fund that determine the rates of both their contributions at a fixed rate; |
| (b) | less such reasonable expenses as the board determines; |
| (c) | plus any amount credited to the member's individual account upon the commencement of the member's membership of the fund or upon the conversion of the category of the fund to which the member belongs from a defined benefit category to a defined contribution category of a fund or upon the amalgamation of his or her fund with any other fund, if any, other than amounts taken into account in terms of subparagraph (d); |
| (d) | plus any other amounts lawfully permitted, credited to or debited from the member's individual account, if any, |
as increased or decreased with fund return: Provided that the board may elect to smooth the fund return;
[Definition amended by section 1(h) of Act No. 45 of 2013]
in relation to a member, means—
| (a) | a person in respect of whom the member is liable for maintenance; |
| (b) | a person in respect of whom the member is not legally liable for maintenance, if such person— |
| (i) | was, in the opinion of the board, upon the death of the member in fact dependent on the member for maintenance; |
| (ii) | is the spouse of the member; |
| (iii) | is a child of the member, including a posthumous child, an adopted child and a child born out of wedlock. |
| (c) | a person in respect of whom the member would have become legally liable for maintenance, had the member not died; |
in addition to the meaning ascribed to 'disclosure' in section 1 of the Protected Disclosures Act, includes the disclosure of information—
| (a) | regarding any conduct of a pension fund, an administrator or a board member, principal officer, deputy principal officer, valuator officer or employee of a pension fund or administrator, made by a board member, principal officer, deputy principal officer or valuator, or other officer or employee, of a pension fund or administrator; and |
| (b) | relating to the affairs of the pension fund which may prejudice the fund or its members; |
[Definition inserted by section 1(i) of Act No. 45 of 2013]
in relation to a fund, means an employer participating in the fund;
in relation to a fund, means an account provided for in the rules of the fund to which shall be credited—
| (a) | amounts allocated by the board in terms of sections 15C and 15F or transferred into the fund for the credit of the account in terms of section 15E(1)(e); |
| (b) | such contributions as are specified in the rules to be credited to this account; and |
| (c) | fund return on the balance in the account from time to time: Provided that the board may elect to smooth the fund return, |
and to which shall be debited—
| (d) | any actuarial surplus utilised by the employer; and |
| (e) | any actuarial surplus transferred to any other account in the fund at the request of the employer or transferred to another fund in terms of section 15E(1)(e); |
[Definition amended by section 1(j) of Act No. 45 of 2013]
in relation to an asset of a fund, means the fair value of that asset determined in accordance with South African Statements of Generally Accepted Accounting Practice;
means the Financial Sector Regulation Act, 2017;
[Definition inserted by section 290, item 1(c) in Schedule 4, of Notice No. 853 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018)]
[Definition deleted by section 290, item 1(d) in Schedule 4, of Notice No. 853 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018)]
in relation to a fund, means—
| (a) | each period of twelve months, at the end of which the balance of its accounts is required to be struck in terms of its rules; or |
| (b) | such other period as may on any particular occasion be determined by the registrar at the written request of the fund, on such conditions as the registrar may impose; or |
| (c) | in the case of a fund which is registered at the commencement of the Financial Institutions Amendment Act, 1977, and which notifies the registrar in writing before 1 January 1979 that it intends changing the date on which its financial year ends from 31 December to another date, the period extending its last financial year, which ends on 31 December, to such other date, provided such period does not exceed eighteen months. |
means a pension fund organisation, and "pension fund" or "registered fund" has the same meaning;
in relation to—
| (a) | the assets of a fund, means any income (received or accrued) and capital gains and losses (realised or unrealised) earned on the assets of the fund, net of expenses and tax charges, associated with the acquisition, holding or disposal of assets; or |
| (b) | any portion of the assets of a fund if the assets are separately identifiable, means any income (received or accrued) and capital gains and losses (realised or unrealised) earned on those assets, net of expenses and tax charges associated with the acquisition, holding or disposal of assets; or |
| (c) | the assets of a fund, to the extent that those assets consist of long-term policies which are "fund member policies" as defined in Part 5 of the Regulations under the Insurance Act, 1998 (Act No. 52 of means the "growth rate" (as defined in those Regulations) applicable to those policies, as determined in accordance with those Regulations, |
which in any such case may be positive, negative or nil:
Provided that the board may use a reasonable approximation, made in such manner as may be prescribed, to allocate a fund return if there are sound administrative reasons why an exact allocation cannot be effected.
[Definition amended by section 1(l) of Act No. 45 of 2013]
in relation to a fund which has a defined contribution category, means an account of which the balance is determined as follows:
the excess of the value of the assets held in respect of the members' individual accounts and for any smoothing of fund return to be credited to such accounts, with allowances for expenses over the value of the balances in the members' individual accounts;
[Definition amended by section 1(m) of Act No. 45 of 2013]
"joint standard"
has the same meaning ascribed to it in terms of section 1(1) of the Financial Sector Regulation Act;
[Definition inserted by section 290, item 1(e) in Schedule 4, of Notice No. 853 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018)]
[Definition deleted by section 14(a) of Act No. 83 of 1992]
means, in relation to—
| (a) | a fund referred to in paragraph (a) or (c) of the definition of "pension fund organization", means any member or former member of the association by which such fund has been established; |
| (b) | a fund referred to in paragraph (b) of that definition, means a person who belongs or belonged to a class of persons for whose benefit that fund has been established, |
but does not include any person who has received all the benefits which may be due to that person from the fund and whose membership has thereafter been terminated in accordance with the rules of the fund;
[Definition amended by section 1(n) of Act No. 45 of 2013]
in relation to an individual member of a defined contribution category of a means the amount determined in terms of section 14B(1);
in relation to a fund, means an account provided for in the rules of the fund to which shall be—
| (a) | credited— |
| (i) | amounts allocated by the board in terms of sections 15B and to be used for the benefit of members; |
| (ii) | return on the balance in the account from time to time: Provided that the board may elect to smooth the fund return; and |
| (iii) | amounts reallocated from the employer surplus account to the account in terms of section and |
| (b) | debited— |
| (i) | the cost of any benefit improvements funded the account; and |
| (ii) | any expenses which would otherwise reduce benefits payable to members; |
[Definition amended by section 1(o) of Act No. 45 of 2013]
| (a) | in relation to a member of a defined benefit category of a fund, means the amount determined in terms of section 14B(2)(a); |
| (b) | in relation to a member of a defined contribution category of a fund, means the amount determined in terms of section 14B(2)(b); and |
| (c) | in relation to a pensioner or a deferred pensioner, means the amount determined in terms of section 14B(6); |
means the amount determined in terms of section 14B(4);
means the Minister of Finance;
in relation to a member of a means a person who is no longer the spouse of that member due to the dissolution or confirmation of the dissolution of the relationship by court order and to whom the court ordering or confirming the dissolution of the relationship has granted a share of the member's pension interest in the fund;
in relation to a fund, means any member of a board, any manager, principal officer, treasurer, clerk or employee of the fund, but does not include an auditor appointed under section 9 or a valuator appointed under section 9A;
means a web site as defined in section 1 of the Electronic Communications and Transactions Act, 2002 (Act No. 25 of 2002), set up by the Financial Services Board;
[Definition inserted by section 1(p) of Act No. 45 of 2013]
in relation to a find, means a person who is in receipt of a pension paid from the fund;
means a pension find organization;
means—
| (a) | any association of persons established with the object of providing annuities or lump payments for members or former members of such association upon their reaching retirement dates, or for the dependants of such members or former members upon the death of such members; or |
| (b) | any business carried on under a scheme or arrangement established with the object of providing annuities or sum payments for persons who belong or belonged to the class of persons for whose benefit that scheme or arrangement has been established, when they reach their retirement dates or for dependants of such persons upon the death of those persons; or |
| (c) | any association of persons or business carried on under a scheme or arrangement established with the object of receiving, administering, investing and paying benefits that became payable in terms of the employment of a member on behalf of beneficiaries, payable on the death of more than one member of one or more pension funds, |
and includes any such association or business which in addition to carrying on business in connection with any of the objects specified in paragraph (a), (b) or (c) also carries on business in connection with any of the objects for which a friendly society may be established, as specified in section 2 of the Friendly Societies Act, 1956, or which is or may become liable for the payment of any benefits provided for in its rules, whether or not it continues to admit, or collect contributions from or on behalf, of members;
[Definition amended by section 1(q) of Act No. 45 of 2013]
means a fund that is a—
| (a) | pension preservation fund as defined in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962); or |
| (b) | pension fund as defined in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962), doing the business of a pension preservation fund as prescribed by the Commissioner in terms of that Act; |
[Definition inserted by section 1(r) of Act No. 45 of 2013]
[Definition deleted by section of Act No. 22 of 1996]
[Definition deleted by section 1 of Act No. 11 of 2007]
[Definition deleted by section 290, item 1(d) in Schedule 4, of Notice No. 853 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018)]]
in relation to a fund, means the employer defined as the principal employer in the rules;
means the officer referred to in section eight;
in addition to the meaning ascribed to 'protected disclosure' in section 1 of the Protected Disclosures Act, includes disclosure of information to the registrar in terms of section 9B;
[Definition inserted by section 1(t) of Act No. 45 of 2013]
means the Protected Disclosures Act, 2000 (Act No. 26 of 2000)
[Definition inserted by section 1(t) of Act No. 45 of 2013]
means a fund that is a—
| (a) | provident preservation fund as defined in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962); or |
| (b) | provident fund as defined in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962), doing the business of a provident preservation fund as prescribed by the Commissioner in terms of that Act; |
[Definition inserted by section 1(t) of Act No. 45 of 2013]
"prudential standard"
has the same meaning ascribed to it in terms of section 1(1) of the Financial Sector Regulation Act;
[Definition inserted by section 290, item 1(f) in Schedule 4, of Notice No. 853 of 2017 - effective from 1 April 2018 (paragraph (h) of Notice 169 of 2018)]
means any direct or indirect communication transmitted by any medium, or any representation or reference written, inscribed, recorded, encoded upon or embedded within any medium, by means of which a person, other than the registrar, seeks to bring any information to the attention of a person, or all or part of the public;
[Definition inserted by section 1(t) of Act No. 45 of 2013]
"Register"
means the Financial Sector Information Register referred to in section 256 of the Financial Sector Regulation Act;
[Definition inserted by section 290, item 1(g) in Schedule 4, of Notice No. 853 of 2017 - effective from 1 April 2018 (paragraph (h) of Notice 169 of 2018)]
in relation to a fund, means registered or provisionally registered under section four, and "registration" has a corresponding meaning;
means the registered office referred to in section seven;
[Definition deleted by section 290, item 1(h) in Schedule 4, of Notice No. 853 of 2017 - effective 1 April 2018 (paragraph (h) of Notice 169 of 2018)]
means a regulation made and in force under this Act;
in relation to a fund, means a contingency or investment reserve account, as the case may be;
means the period commencing on the member's retirement date;
means a retirement annuity fund as defined in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962);
in relation to a member, means dismissal from employment based on the operational requirements of the relevant employer;
has the meaning assigned to it in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962);
means the rules of a fund registered in terms of this Act;
[Definition amended by section 1(v) of Act No. 45 of 2013]
means a person who is the permanent life partner or spouse or civil union partner of a member in accordance with the Marriage Act, 1961 (Act No. 68 of 1961), the Recognition of Customary Marriages Act, 1998 (Act No. 68 of 1997), or the Civil Union Act, 2006 (Act No. 17 of 2006), or the tenets of a religion;
in respect of a fund, means a current member, including a pensioner and a deferred pensioner, a former member and an employer participating in the fund;
in relation a fund, means an investigation by a valuator contemplated in section 16;
in relation to a fund, means the first statutory actuarial valuation date following the commencement date;
[Defintion deleted by section 14 (a) of Act No. 83 of 1992]
includes any matter prescribed by the registrar by notice in the Gazette and any regulation;
[Definition amended by section 1(w) of Act No. 45 of 2013]
means the Financial Services Tribunal established in terms of section 219 of the Financial Sector Regulation Act;
[Definition inserted by section 290, item 1(i) in Schedule 4, of Notice No. 853 of 2017 and commenced 1 April 2018 (paragraph (h) of Notice 169 of 2018)]
means—
| (a) | any benefit, other than a benefit referred to in paragraphs (aA), (b), (c) and (d) not paid by a fund to a member, former member or beneficiary within 24 months of the date on which it in terms of the rules of the fund, became legally due and payable; |
| (aA) | a death benefit payable to a beneficiary under section 37C not paid within 24 months from the date on which the fund became aware of the death of the member, or such longer period as may be reasonably justified by the board of the fund in writing; |
| (b) | in relation to a benefit payable as a pension or annuity, any benefit which has not been paid by a fund to a member, former member or beneficiary within 24 months of— |
| (i) | the expiry date of any guarantee period for pension payments provided for in the rules of the fund; or |
| (ii) | the date on which any pension payment or annuity legally due and payable in terms of the rules of the fund became unpaid; |
| (c) | in relation to a benefit payable to a former member who be traced in accordance with section 15B(5)(e), any benefit that has become legally due and payable to a former member in terms of a surplus apportionment scheme approved in terms of this Act not paid to that former member within 24 months of the date on which it became legally due and payable; |
| (d) | any benefit that remained unclaimed or unpaid to a member, former member or beneficiary when a applies for cancellation of registration in terms of section 27 or where the liquidator is satisfied that benefits remain unclaimed or unpaid; or |
| (e) | any amount that remained unclaimed or unpaid to a non-member spouse within 24 months from the date of the deduction contemplated in section 37D(4)(a)(ii), |
but does not include a benefit due to be transferred as part of a transfer of business in terms of section 14, where an annuity is purchased in respect of a pensioner or otherwise in terms of this Act;
[Definition amended by section 1(x) of Act No. 45 of 2013]
means a fund that is established for the receipt of unclaimed benefits contemplated in the definitions of a pension preservation fund and a provident preservation fund in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962);
[Definition inserted by section 1(y) of Act No. 45 of 2013]
[Definition deleted by section 14 (a) of Act No. 83 of 1992]
in relation to a fund, means a fund which has been exempted by the registrar under section 2(5)(a) from sections 9A and 16;
[Definition amended by section 1(z) of Act No. 45 of 2013]
means an actuary who, in the opinion of the registrar, has sufficient actuarial knowledge to perform the duties required of a valuator in terms of this Act.
[Definition amended by section 1(zA) of Act No. 45 of 2013]
| (2) | For the purpose of the application of the provisions of this Act in relation to an organization which is a pension fund organisation in terms of paragraph (b) of the definition of "pension fund organisation" in subsection (1), any reference in this Act to a fund shall be construed as a reference to that fund or to the board of that fund, as the circumstances may require. |
| (3) | Unless the context otherwise indicates, words and expressions not defined in subsection (1) have the same meaning ascribed to them in terms of the Financial Sector Regulation Act. |
[Section 1(3) inserted by section 290, item 1(j) in Schedule 4, of Notice No. 853 of 2017 and commenced 1 April 2018 (paragraph (h) of Notice 169 of 2018)]