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South Africa
Pension fund surpluses
After extensive negotiations, the
'Pension Funds Second Amendment
Bill, 2001' has now been gazetted.
The bill sets out the guidelines for the
distribution of pension fund surpluses
and makes provision inter alia for:
- Payment of prescribed minimum
benefits on retrenchment, fund
liquidation, conversion of funds from
defined benefit to defined
contribution, member transfers,
resignation and minimum pension
increases.
- An equitable apportionment of
existing surplus between members,
former members and the sponsoring
employer. The procedures to be
followed to arrive at this
apportionment are also stipulated.
- Granting rights to members and
the employer in respect of their share
of apportioned surplus. How the
surplus may be utilised subsequently is
also prescribed.
- The introduction of retrospectivity
to redress past benefit inequities.
- Repatriation of the surplus to the
employer will be allowed under
certain prescribed circumstances.
Regulations will be issued that will
address a number of unresolved
issues, such as actuarial calculations to
determine how much of a fund's
investment reserve should be made
available to its members.
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