Municipal Employees Pension Fund v SAMWU National Provident Fund and Another

The Ntabankulu Local Municipality was a participating employer in the SAMWU National Provident Fund. One hundred and twenty-four municipal employees, while remaining in service of the municipality, purported to terminate their membership of the SAMWU Fund and join the Municipal Employees Pension Fund (MEPF) with the municipality’s consent. From September 2013 the municipality ceased paying pension contributions to the SAMWU Fund in respect of those employees. The SAMWU Fund instituted proceedings to compel payment of arrear contributions. MEPF and its administrator, Akani, intervened and counter-applied, challenging the validity and constitutionality of rule 3.2.1 of the Fund rules and seeking to compel transfer of the employees’ benefits under sections 13A(5) or 14 of the Pension Funds Act 24 of 1956.

The appeal was dismissed with costs, including the costs of two counsel. Paragraph 2 of the High Court order was amended to direct the municipality to pay all arrear pension contributions withheld since September 2013.

The judgment authoritatively clarifies that municipal employees cannot unilaterally terminate membership of a compulsory municipal provident fund while remaining in service, and that section 13A(5) of the Pension Funds Act does not override fund rules. It distinguishes individual benefit transfers from section 14 business transfers and resolves conflicting High Court authority, reinforcing certainty in pension fund governance and stability of fund membership.