Pension surplus: get your own back

2010-09-22 14:20

WHEN Paul* changed jobs in 2001, he was happy enough with the payout he received from his former employer's pension fund and invested it in a living annuity.

But rumours about a surplus in the company's pension fund kept surfacing and he decided to investigate.

Since the 1980s, most local pension funds moved over from being defined benefit (where the pension benefit due to the member is defined by the fund's rules and is often expressed as a percentage of salary for every year of service) to defined contribution (where the pension benefit is based on your contributions and the investment returns).

However, many of the funds did not transfer their surpluses to the new funds, and many people who withdrew their pension investments in the past 20 years did not get their share of the money.

A pension fund surplus is the assets in a fund that are left after its liabilities (what members are entitled to) and the reserves (protection against unforeseen circumstances) have been taken into account.

After years of queries and submitting numerous surplus claim forms, Paul was informed that there was no surplus and that a "nil apportionment return" had been submitted to the Financial Services Board (FSB) by the fund's trustees.

"I was not prepared to accept this advice and I wrote to the FSB, expressing my concern and requesting them to subject the nil return to critical scrutiny," he told

His enquiries dragged on for another couple of years. Then, out of the blue, he was informed that a surplus did in fact exist and that qualifying members would receive a payout. He received his part of the surplus earlier this year.

Paradoxically, Paul was very annoyed that the surplus payout was more than the amount paid to him when he retired from the fund. (This could be due to the compounding of the value of the benefit over the years.) The money has had a major effect on his life.

"Given my experience and despite a happy ending to my claim, I believe that there are probably plenty of cases where companies are not treating ex-members fairly.
"If members want their share of the surplus in their funds, this is best achieved by being bloody-minded and persistent."
South Africa adopted legislation in 2001 to force pension funds to repay former members of retirement funds their fair share of surpluses.

Most pension funds were not guilty of any wrongdoing because they paid benefits according to the fund rules. New legislation introduced new minimum benefits to be paid on exiting a retirement fund. 

Funds had to implement these minimum benefits retrospectively and, if a surplus existed, this was then used to provide a top-up to the “old” benefit paid earlier.

However, some companies like Alexander Forbes and Sanlam have had to repay hundreds of millions of rands to members after allegedly assisting companies to "strip" surpluses from their pension funds.

After long delays, almost R19bn has now been paid out and about 95% of pension funds have finalised their pension surplus apportionment process, with billions more still due to members.

The estimate of a total outstanding amount of R80bn, used by some, has always been known to be an overstatement, says Tommie Doubell, chairperson of the retirement matters committee of the Actuarial Society of South Africa.

He explains that the initial estimate of R80n was calculated before allowing for the new minimum benefits and allowing for reserves to protect funds and members. In addition, the investment returns were also very bad in 1997, 1998 and 2001 (the years between the estimate and the surplus apportionment dates), valuators realised that they needed to proper allowance for  improvements in mortality amongst pensioners, and inflation rates and bond yields reduced.

Are you entitled to pension surplus money?

If you were in a defined benefit pension fund, and particularly if you withdrew from the fund prior to retirement receiving only your contributions, there may be a chance that you are owed money.

Defined contribution funds may also have surpluses, although this is less likely than for defined benefit funds, said Doubell.

Since 2001, strict laws have been set in place to deal with the distribution of retirement fund surpluses.

The allocation of a pension fund surplus is determined by the board of trustees of the pension fund and the whole process must be fully documented and communicated, said Doubell.

"The rules that came into effect in 2001 prescribe equitable transfer values and fair treatment of pensioners. It is, however, less likely that huge surpluses will build up as they have in the past. Also, there are very few members left in defined benefit funds, meaning that any future surpluses will be very small."

How to get your money

Doubell recommends that you contact your former employer to determine which fund you were a member of. "Having previous records such as benefit statements is hugely helpful."

Your former employer will then be able to determine if the fund is still in existence and whether there is a surplus in the fund that needs to be distributed.

Doubell explains that once a scheme enters the process of a surplus distribution, then a “former member representative” is appointed.  He says former members should contact this person, who is responsible to look after the interests of all former members and help them with submitting a claim.

Paul recommends writing a registered letter to the principal officer of the fund, enquiring whether there is a surplus in the fund and if so, what the status of the apportionment scheme is and when payment will be made.

Also ask that if no surplus exists, whether a nil return had been submitted to the FSB and what the response of the FSB was to the return - whether it was approved, rejected or if it is pending.
If you are not happy with the response from the principal officer, write a registered letter to the FSB, expressing your concern.
"This has the effect of placing the FSB on notice that fund members are disgruntled."

Fund members are given the opportunity to object as part of the process, before the submission is made to the FSB.
Paul's other tips:

  • Make every effort to obtain a personal contact and email address of someone at the fund.
  • Submit regular queries to the fund and if this does not help, write to the FSB.
  • When writing to stakeholders, use registered mail.
  • When sending emails, use the receipt function.
  • When submitting claim forms, make sure that this is done with scrupulous accuracy.
  • Insist on all advices being made in writing - never accept verbal input.
  • Make contact with former colleagues and encourage them to hassle the fund.
  • Try and obtain a copy of the valuation report on which the surplus is based.
How to protect yourself
Make sure that the management of your pension fund is above board by taking an active interest. Members vote for their trustee representatives and should receive regular feedback from them, said Doubell.

You can raise objections during your fund's surplus distribution process and, if not satisfied, can then object to surplus apportionment schemes by contacting the FSB.


*Name changed.

  • jane - 2010-09-22 12:22

    There are surpluses in both the Seardel and the Edcon Pension Funds and members were advised to apply for apportionment about 2 years ago. I was a director of companies in both groups in the 80's. Alexander Forbes is handling both funds. It is virtually impossible to get a sensible answer from them on the progress regarding the apportionment. Will hassling the FSB help in these cases?

      Karen Blake - 2015-09-03 22:49

      hi, wonder if you could help me, I just received this email from sanlam, this is regarding a 1995 retrenchment payout. They traced me after 20 years and this is the payout and reply on my query. I don't understand a word of it. Good day Karen   Refer your query regarding the surplus payment of R1 956. In terms of the Pension Funds Act, former members of the Fund have first claim to the distributable surplus, but only to the extent that the benefits previously paid to them (as determined in terms of the Rules of the Fund) are less than the prescribed minimum benefits (as determined by the Act). The payment of R1 956 therefore represents the top-up payment, i.e. the difference between the retrenchment benefit received previously and the prescribed minimum benefit.   Kind regards, Maryke Kotze Principal Officer: Aegis Pension Fund

  • André Kruger - 2010-09-22 12:40

    Who is the FSB you are referring to?

  • Sammy - 2010-09-22 13:07

    @ Andre, its the Financial Services Board

  • brian - 2010-09-22 13:30

    the ABSA pension fund took a contribution holiday to boost their profits in the late nineties yet have told us ex employees that there is a nil surplus - surely the FSB should fine these companies and not just depend on us hassling the companies to give our rightful share of the surplus?

  • Jayne - 2010-09-22 13:38

    I am awaiting a surplus payout from my previous employers which should happen sometime this year. my husband was with Datakor which also had surplus funds but this has been dragging out for 2 years already because of the bosses defrauding the pension scheme so how long it would take i dont know. the last we heard the FSB still had not made a ruling so i feel for the people who have been waiting for some action to happen, and as Andrew stated some are already passed so what happens to their monies does it pass onto the relatives that are still alive? i believe their are too many chiefs that have far too much say and the warriers have no leg to stand on.

  • George* - 2010-09-22 14:53

    It is extraordinary how companies regard their pension and retirement funds as piggy banks for them to abuse. I left a large engineering company ten years ago and the comapny agreed to leave my pension and retirement funds going indefinitely until I decised to withdraw, enabling them to continue to grow both as the fund grew. A chance remark to an ex-colleague some years later left me concerned as the "fund" had instead blocked the monies, withdrawn tax and held them in a non-interest bearing "account". After repeated failures to reply to my requests for information and answers I approached the PFA (Pension Funds Adjudicator). They secured a three-fold increase in the retirement fund payout, including a reversal of the tax. However, any claim on the pension fund surplus had to be made through the FSB, not the PFA. So far my correspondence has drawn a blank other than "our pension fund has no surplus". This is curious because out of hundreds of employees in the company, I had only know two that actually retired from the company. Over 95% of the employees had left, withdrawing their pension contributions. Did anyone else have such difficulties with the Fluor Pension Fund?

  • Sanet - 2010-09-22 14:55

    Where is Mr. Manual he announced the surplusses and gave the pension funds a certain time to pay out. Is he still in Government.

  • Carole - 2010-09-22 15:49

    What do you do if the company does not give you the relevant information and where do you get the FSB relevant addresses to write or email to?

  • Antoinette Courtney - 2010-09-22 16:18

    I agree with you. My brother worked for them for 16yrs and has also been waiting 11 yrs now for the Primovie Surplus Fund. I think its disgusting.

  • Francois - 2010-09-22 19:58

    This has been going on for too long. Alexander Forbes gives the same vague answers now for the last 5 years.Primovie is determent to get their cut it seems. The payout time of 8 weeks has been promised a few times since 2003. Primovie keeps on objecting. I think the FSB should take them to task and slap them with a big fine as they are wasting the funds money through there legal battles which the fund must defend.

  • Linda - 2010-09-23 07:15

    I too am waiting for the Primovie Fund to get its A into G through Alexander Forbes! Maybe we should all get together and go and picket AF offices. It's a disgraceful company and this dragging of feet is not making them any friends.

  • JOHAN - 2010-09-23 09:10

    I am also an ex-pensioner and got no joy from Alexander Forbes. I worked for a big bank for forty years but when I enquire about surplus funds I was told that I do not qualify as I left the service later. Matter was referred by me to the Ombutsman. Acknowledge of receipt was received by us from Alexander Forbes but after three weeks no comments. These companies like Alexander Forbes work to earn profits for themselves as these costs to keep them going come from the surplus funds and NOT the companies who apointed auditors like Alexander Forbes.

  • lizzy morakile - 2010-09-23 10:15

    I am very-very concern about what my company is doing,not only me, but with some of the staff: i work for this company sins from the 4th of August 1985, and i am still on with this company,there is no subsidys for buying a house,no nothing...if you ask them, how long am i going to rent rooms,with my three children, there is no good answer..they will tell you that there is no money..I remember one day i ask them, if is there any money i can gett to buy a house for my children, because i am still renting, with my children, then they says no, college have no money.It is a Goverment college: It is (CJC PARKTOWN CAMPUS) NO.5 PRINCESS OF WALES STREET,in PARKTOWN.idont no what to do? can you perhaps guide me what to do!! I am so depressed of this makes me sick.

  • asa - 2010-09-23 15:55

    I worked 18 years for Iscor and left in 1997. When I enquire about the surplus funds, I was told that there will not be a surplus. I enquired from the FSM (tephonically) how I could get in touch with the people working with the surplus payouts, so I could submit a claim, but there is simply no answer at the registered office. How do I get hold of these people?

      joseph.sibiya.52 - 2012-10-15 07:15

      Go to Metal Industries in Anderson Street JHB that's where all Steel and Engineering employees get help.

  • Alan - 2010-09-23 18:17

    I was a member of both Murray & Roberts Pension fund and Anglo American, On leaving both paid the least they could get away with. They are always retrenching people and made big surpluses every year for decades on their Pension Funds - this reduced the amount the company had to chip in. A contribution holiday they called it. The pension Fund was not theirs and yet they used it and manipulated it to their benefit. They also said they had no surpluses - impossible after so many years of taking advantage of their employees. Shame on them.

  • Sparky - 2010-09-24 07:04

    While I realise that the concerns of some of the letter writers are genuine, some however show a real ignorance of the provisions of the Pension Fund 2nd Amendment Act of 2001 which requires Pension Funds (NOT the Employer) to trace former members back to 1 Jan 1980 IF (I repeat IF) there is an Actuarial Surplus in the Fund as set out in the Act. The PFA must then sign off a Nil Scheme (if it applies)or the Fund (with the help of the Former Member Representative) must compile (after advertising as prescribed) a schedule of entitled beneficiaries (again per the Act) and get the Fund Valuer (an Actuary) to do the apportionment for submission to the FSB for approvbal. Only then can it begin paying. So many complications, so many steps especially working retrospectively to 1980 (30 years of former members) so many calculations (per the Act) so much correspondence. It is NOT simply cutting a slice of cake the same size fits all and dishing it out to anyone that claims a slice. Be fair to Alexander Forbes, Old Mutual and other administrators - the buck stops with your Fund's Trustees - the Administrators work for them - NOT the Employer. I know - I am a trustee on a Pension Fund and know the complications having been involved for 6 years with tne payment of surpluses.

  • THABISO - 2010-09-27 12:44

    We have been taken from pillar to pillar by Alexander Forbes regarding our Pension funds since 1989....ex-NATIONAL SPRING EMPLOYEES.....can someone assis...we have been in FSB ...BUT NO ASSISTANT WE GET.

  • Brent McNeil-Spence - 2010-09-28 10:47

    Good day all. Should you require any assistance with regards to surplus funds that are currently being administered by Alexander Forbes, please do not hesitate to contact me on my email address provided below, as I would be more than happy to assist. Kind regards, Brent McNeil-Spence Client Liaison Officer Alexander Forbes Financial Services Email:

      Gino Erentzen - 2011-04-08 18:04

      Hi Brent I workded for Std Bank period August 1990 to Feb 2005.When i phoned to find out about the surplus they told me that I do not qualify.Could you kindly assist me in this matter.Also prior to Std bank i worked for First National Bank period 1982 to 1987 do I qualify for surplus pension from them

      alvin.pillay.54 - 2012-08-29 11:14

      Good day Brent, i was a member of the Grindrod Pension Fund for 14 years between 1990 and 2003. When i left, i was paid out just my contributions to the fund. When talk of the surplus funds arose, i approached Alexander Forbes, and was paid out an amount of +-R800. I left the shipping industry and was not a member of any fund between 2004 and 2011. I rejoined the industry in 2012 and my current employers Pension Fund is also administered by Aleaxander Forbes. After three months on the Fund, i logged onto the Online Portfolio and noted two figures on Life Cover as well as Disability Cover. One reflects Grindrod Pension Fund and the other my current employer with substantial amounts reflected for Life cover and disability cover for the Grindrod Pension Fund. I contacted AF and was told that this is an error and would be deleted from my Portfolio. I dont understand this error and require explanations. Who should i contact?

  • Sandra Govender - 2010-09-28 15:29

    I worked in the leather and clothing and would like to know if there is a surplus fund.

  • Shaks - 2010-09-29 13:40

    I only just recently received a payout from Alex Forbes Pension Fund after 16 years of service since 1983. How do we find out if justice is being done to the amount calculated at payout. Could it be that we might be entitled to more than what we're getting paid out. Whu allow the FAT cats to get FATTER at our expense?

  • Cheryl - 2010-10-01 13:06

    I resigned from the SAPS a few years ago. I do not know what funds our pensions were invested in and if there is a surplus. Could someone perhaps advise? Anything additional to the SAPS pension would be great.

  • wilma harris - 2010-10-05 10:39

    hi. i worked for standard bank from 1991 to 1999 when i was dismissed. alexander forbes first told me that i resigned therefore i wont get any surplus. i replied by telling them that i did not resign. then he told me that people who resigned,dismissed,or retrnched wont get any. my question to him was who is the former members then and that he should mail me a breakdown of the money i contributed towards the fund. he simply send me something where he multiplied my then salary of 2866 with 13mnths which came out more or less the money i please i have no clue about hese things

      joseph.sibiya.52 - 2012-10-15 07:09

      Surplus is a surplus whether you resign or not get advance help

  • kleinke - 2010-10-16 11:07

    anyone know if surpulus on the old Southern Life pension fund. merger with Momentum in 1999.

  • Vuyokazi Ngidi - 2010-10-29 16:14

    Require more details on this issue I resigned from Wentworth hospital in 1989,St Augustines Hospital 1991,Child Welfare society 1996 I need to check on the old Employers

  • Sue van der Merwe - 2010-11-07 10:30

    Can any ex employee of Vecor Vanderbilpark tell me if they received any payouts. I was told there were no funds in the Surplus Fund Please send me an email to

  • erica de beer - 2010-11-08 21:29

    Does anybody know if the Transnet/SAA company had any surplus fund pay outs,or who was handling their funds?

  • Charlotte Kunene - 2010-11-09 15:33

    Alexander Forbes advertized on the media that all ex Vista University employees should apply for surplus. After applying we were told that we do not qualify. I am talking about millions of rands.

  • Trevor - 2010-11-09 21:56

    Hi I need to know when the engeneering industries surlpus fund will pay out Thanks Trevor

  • GERDA PACE - 2010-11-11 11:19


  • GLYNIS ULLBRICHT - 2010-11-12 14:39


  • yvonne pennicott - 2010-11-28 21:18

    My deceased husband worked for NCR for many years, then they pulled out of the country. Does anyone have any advise in a situation like this?

  • yvonne pennicott - 2010-11-28 21:22

    My deceased husband worked for NCR for many years, then they pulled out of the country. Does anyone have any advise in a situation like this?

  • Erich Beukes - 2010-11-29 14:07

    Hi the issues raised are valid hope the solutions were positive.

  • Raymond - 2011-01-06 14:55

    Does anyone have any information on ERPM & Goldfields pension surplus. I left the mining industry in 1981 and I need upgated info.

  • HILDA STRYDOM - 2011-01-07 12:53


  • Suzzette - 2011-01-08 09:03

    Mylate husband worked for Grinaker Precast and resigned. When he passsed away i had to fill in forms as their was an amount that they told me was due to me(big) filled in all the forms and then they told me widows are not getting this Surplus.???? I have all the proof that was sent to me, how does this work.It was due to my husband now where has that money gone.

  • cornel maselana - 2011-01-17 11:38

    can you be so kind please tell me where can i go and find out if I do qualify for surplus

  • Samaritan - 2011-01-26 13:01

    If you worked for Liberty life at any time - there is a surplus benefit from the Liberty Life pension fund. You can email them at - they will check for you and let you know.

  • Augustine Sambaba - 2011-02-07 10:36


  • Levi - 2011-03-04 15:22

    I worked at Vista University. Alexander Forbes asked us to fill forms so that we can be reimbursed our pension monies. You know what we are still waiting and rumours are that some already got thie monies.

  • Gladys Magubane - 2011-03-04 16:04

    I Filled in application forms about 5years ago with regards to the Seardel surplus funds. I am still waiting for a responce since then.I was working for Sharp Electronics left in 1994.I would like to find out why is it taking so long?

  • Stephen van Zyl - 2012-01-12 13:13

    Does anybody know whether Volkwagen SA declared any surplus on the provident fund administered by Alexander Forbes?

  • mike.moja - 2012-01-16 18:37

    does anyone knows about surplus pension for people who worked at AECI in Modderfontein? who do we contact and what are their contact details? please respond to me at Thanx Mike

  • Made - 2012-04-04 11:55

    gyz, i think the only way to fight these guyz is to get an attorney, he wll do the porceedings for you (stress free)!

  • Harriet - 2012-05-15 12:28

    I worked for the Perm Building Society from 1979 until 1983 - does anybody know who I can contact to find our if I qualify for surplus penison funds. I then worked for Peoples Bank from 1984 until 2002 - does anybody know who I can contact to find our if I qualify for surplus pension funds.

  • petrus.gouws - 2012-07-12 18:24

    Petrus Gouws Iscor Vanderbijlpark 1983 to 1999. Any response or info please?

  • joseph.sibiya.52 - 2012-10-15 07:19

    How do Sappi employees get their surplus please any one.

  • moeneeb.isaacs - 2013-02-16 11:33

    Does anyone know if theres a surplus for the Telkom Pension Fund or the Telkom Staff Retirement Fund???

  • Ursula Leeuw - 2013-11-06 23:34

    I dnt trust alexander forbes because when we apply fr my late father pension fund it ws already paid out to some one who ws nt even a relative of ours they just told us tht it ws paid out they didn't even border to investigate the matter so I wnder if they will pay out my fathers surplus because I feel tht we as he's chirldren are in title to it.BRENT plz help

  • Narainamah Shamla Moodley - 2014-03-21 03:01

    Shamla N.Moodley : I worked for Sasol 2 in Secunda during 1990-1992. Has Sasol paid out surplus funds.Does anyone perhaps know of any contact details in this Regard

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