MC + EC – X + IC + OC
where—
| (a) |
MC represents the contributions paid by the member; |
EC represents the contributions paid by the employer in respect of the member;
X represents such reasonable expenses as the board determines;
IC represents the 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 a defined benefit category to a defined contribution category of a fund or upon the amalgamation of the member's fund with any other fund, if any, other than amounts taken into account in terms of OC; and
OC represents any other amounts lawfully permitted, credited to or debited from the member's individual account, if any; and
[Section 14B(1)(a) amended by section 21(a) of Act No. 45 of 2013]
(b) MC, EC, X, IC and OC are increased or decreased with fund return: Provided that the board may elect to smooth the fund return.
| (i) |
the fair value equivalent of the present value of the member's accrued deferred pension: Provided that— |
| (aa) |
where there is a uniform rate of accrual over the period of membership of the fund, the accrued deferred pension shall be calculated assuming a uniform rate of accrual as if the member had remained in service until normal retirement date as defined in the rules of the but which rate of accrual will not be less than the uniform rate of accrual that is calculated based on the period of service completed up to the date of calculation; |
| (bb) |
the fair value equivalent of the present value shall assume rates of increase in the pension before and after retirement, mortality rates and rates of discount as prescribed by the registrar; and |
| (cc) |
the term "accrued deferred pensions" in this section shall include the portion of any lump sum benefit payable at normal retirement date which corresponds to prior service; and |
| (ii) |
an amount equal to the value of the member's contributions, less such reasonable expenses as determined by the board as from the date of payment of a contribution plus any amount payable in of the rules of the fund in excess of the member contributions increased or decreased with fund return as from the date that the member joined the fund: Provided that the board may elect to smooth the fund return; and |
[Section 14B(2)(a)(ii) amended by section 21(b) of Act No. 45 of 2013]
| (b) |
defined contribution category of a fund, the board shall determine the value of the member's individual account as determined in terms of subsection (1) plus a share of the investment reserve account, the member surplus account, and such contingency reserve accounts as the board may determine should be included in terms of section in the proportion that the member's individual account value as at the effective date of the calculation bears to the total of all members' individual account values as at that date or such other method of apportionment as the board deems reasonable. |
(3)
| (a) |
The board shall establish and implement a policy with regard to increases to be granted to pensioners and deferred pensioners, which policy must— |
| (i) |
aim to award a percentage of the consumer price index, or some other measure of inflation which is deemed suitable by the board; and |
[Section 14B(3)(a)(i) amended by section 21(c) of Act No. 45 of 2013]
| (ii) |
set the frequency with which increases will be considered in line with the policy: Provided that increases should be considered each year, with comparison to the minimum pension increase at least once every three years. |
| (b) |
The policy contemplated in paragraph (a) must be communicated to pensioners and deferred pensioners when it is established and whenever it is changed. |
| (c) |
The policy contemplated in paragraph (a) will not be required where— |
| (i) |
pensioners on or after retirement in terms of the rules of a fund and in line with the pension increase policy of the fund at the time of purchase, purchase a policy from a long-term insurer registered under the Long-term Insurance Act, 1998 (Act No. 52 of 1998); |
[Section 14B(3)(c)(i) amended by section 21(d) of Act No. 45 of 2013]
| (ii) |
pensioners on whose behalf a fund, on or after retirement in terms of the rules of the fund and in line with the pension increase policy of the fund at the time of purchase, purchase a policy of insurance covering that fund's full liability in respect of those pensioners from a long-term insurer registered under the Long-term Insurance Act, 1998 (Act No. 52 of 1998); |
[Section 14B(3)(c)(ii) amended by section 21(d) of Act No. 45 of 2013]
| (iii) |
pensioners elected to receive a level pension, or a pension with fixed increases, or a pension the amount of which is elected by the pensioner time to time, paid from the fund in terms of the rules of the fund. |
(4)
| (a) |
In determining the minimum pension increase, the board shall increase pensions by a factor, P, where P is equal to the greater of the increase that the board would grant in terms of the pension increase policy established in terms of subsection (3) and— |
| (i) |
the increase in paragraph (b), if the increase in paragraph (b) is less than the increase in paragraph (c); or |
| (ii) |
the increase in paragraph (c), if the increase in paragraph (b) is greater than or equal to the increase in paragraph (c): |
Provided that if the application of the increase factor, P, causes a fund to become financially unsound, the board, after taking into account any balance in any contingency reserve account, may limit P to such amount as will not cause the fund to be in a financially unsound condition.
[Section 14B(4)(a) amended by section 21(e) of Act No. 45 of 2013]
| (b) |
The board shall determine the increase that would result from— |
| (i) |
accumulating with fund return the liabilities for pensioners at their dates of retirement in the fund or date of joining the fund if the pensioner retired from another fund and became a member of the fund as a result of an approval granted in terms of section 14(1) and deferred pensioners at their dates of termination of service, including any contingent liabilities payable, in terms of the rules of a fund, on of those or deferred pensions to persons who are still alive at the effective date of the calculation, adjusted to an equivalent fair value of assets less— |
| (bb) |
cash amounts paid on retirement; and |
| (cc) |
those expenses that the board deems reasonable, |
| (ii) |
plus the liability in respect of any special increases that have been granted to pensioners and deferred pensioners which were funded otherwise than through fund return: Provided that, if the board is unable to grant the full minimum pension increase as at the surplus apportionment date, the board may reduce the amount determined in of this subparagraph at that date such that the amount equals the pensioner liability as at the surplus apportionment date after enhancement in terms of section 15B(5)(b), if applicable, increased to an equivalent fair value of assets, and the board may accumulate thereafter in terms of this paragraph, using such reduced amount, as if it was the balance determined in terms of this paragraph as at the surplus apportionment date prior to such reduction; and |
| (iii) |
dividing the amount calculated in terms of subparagraph (i) by the present value of current pensions and deferred pensions after making allowance for mortality, expenses and future pension increases at the rate determined by the board, adjusted to an equivalent fair value of assets. |
| (c) |
The board shall determine the increase required to each pension to provide the pension payable in the month following retirement, nett of the commutation of any portion of the pension for cash or the deferred pension at the date of termination of service, multiplied by the change in the consumer price index the date of retirement in the case of a pensioner, or the date of termination of service in the case of a deferred pensioner, to the effective date of the calculation of the increase. |
| (d) |
Where the board it impractical to derive the increases in paragraphs (a), (b) and (c) for each individual pensioner or deferred pensioner, the board may use an approximate method which will preserve the broad principles behind paragraphs (a), (b) and (c). |
| (5) |
For purposes of subsection (4), where the pension has arisen because of the death of a member rather than the member's retirement, any reference in that subsection to "retirement" shall be construed as a reference to death. |
| (6) |
In determining the minimum individual reserve of a pensioner or a deferred pensioner, the board shall determine the fair value equivalent of the present value of the pension, or the deferred pension, payable to that member after implementation of any minimum pension increase in terms of subsections (4) and 5, including the present value of any contingent pension payable to the member's spouse, children and other dependants. |
[Section 14B has not yet commenced, per paragraph (h) of Notice 169 of 2018]
Gas Regulator Levies Act, 2002
