Pepcor Retirement Fund and Another v The Financial Services Board and Another

The Registrar of Pension Funds issued certificates under s 14(1) of the Pension Funds Act 24 of 1956 approving a series of transfers of business during the ‘unbundling’ of the Pepcor Pension Fund, a defined benefit fund, into several ‘daughter’ funds. These approvals were based on incorrect actuarial information provided by the fund’s valuator, which materially understated the funding level and surplus of the original fund. As a result, members transferred without knowledge of a substantial surplus, and an additional amount of R9.2 million was transferred to Pepkor Limited without authorisation under s 14. When the true position was later discovered, the Financial Services Board (FSB) and the Registrar sought to review and set aside the approvals and transfers, and to compel repayment of the R9.2 million. The High Court granted the relief, and the fund and employer appealed.

The appeal was dismissed. The review and setting aside of the Registrar’s s 14(1) certificates and the consequent transfers were upheld, as was the order directing repayment of the R9.2 million to the fund (subject to the High Court’s suspension order).

This case is a leading authority in South African administrative law on the locus standi of public regulators to review their own decisions and confirms that a material mistake of fact may justify judicial review. It is also significant in pension fund regulation, reinforcing the protective purpose of s 14 of the Pension Funds Act and the public-interest role of the Registrar and the FSB.