Share

Pension Funds Adjudicator slams provident fund

Cape Town – Pension Funds Adjudicator (PFA) Muvhango Lukhaimane has lashed out at a provident fund for causing ‘disharmony in the industry’.

Lukhaimane, was scathing in light of how Chemical Industries National Provident Fund (CINPPF) conducted its business in trying to get members of a rival fund on its books.

“It is the view of this Tribunal that the behaviour of the second complainant (CINPPF) constitutes an undesirable business practice that has the effect of causing disharmony in the industry and endanger its integrity if not sanctioned,” Lukhaimane said in a statement.

Sixty-eight employees of Packaging company Mpact Corrugated lodged a complaint that PPWAWU National Provident Fund refused to transfer their fund to CINPPF which, in their view, offered better benefits and performed better.

Interference

In its response, PPWAWU argued that “as part of their conditions of employment, the complainants were obliged to become members of a retirement fund organisation.

"They were given an option to join one of the three such organisations namely, the Mondi Mpact Group Fund, SATU Provident Fund or PPWAWU National Provident Fund”.

According to PPWAWU the Chemical Industries National Provident Fund did not have the authority to interfere with the contractual arrangements between the employer and the employees.

And a decision to transfer the employees’ funds to it would cause interference, as it would result in a breach of the conditions of employment.

PPWAWU also said that a petition submitted by the employees had been signed by 54 members and represented a small proportion of its 555 members.

Ruling

Lukhaimane ruled that once members in a plant felt that they wished to transfer out of the PPWAWU National Provident Fund, they may do so, but only to any approved provident fund.

“The primary issue which needs to be determined in the context of the present matter is whether or not the complainants are free to join any pension fund of their choice, which falls outside of the scope mentioned in their contracts of employment.

“It is imperative to note that an employment contract is a foundation which gives rise to fund membership. Minus a contract of employment, no fund membership exists.

“This Tribunal notes that the third respondent has a contingent of 555 employees and thus, from a proper employee management point of view, it was necessary for it to limit the number of pension funds to which it participates as failure to do so would have led to an administrative nightmare with each of its employees belonging to different pension funds.

“It is against this background that this Tribunal concludes that it favours a more purposive and practicable interpretation that the complainants’ rights to transfer out of the first respondent are limited only to the funds mentioned in their employment contracts,” she said.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,221.35
+1.2%
Silver
24.87
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders