The Associated Institutions Pension Fund v Le Roux, Petrus Abraham Kriel and Others

Approximately 2 500 employees and pensioners of the University of South Africa elected in 1994–1995 to leave the Associated Institutions Pension Fund, a central pension fund established under the Associated Institutions Pension Fund Act 41 of 1963, and to join a newly established autonomous fund. In terms of transfer regulations promulgated in April 1994, departing members were entitled to a transfer value calculated by applying a ‘funding percentage’ to the Fund’s actuarial obligation in respect of each member, as determined by the appointed actuary. Because the Fund had been underfunded since 1985 and membership data were unreliable, the actuary (Mr de Wit) applied a 7.5% data loading factor to allow for unascertained members, resulting in a funding percentage of 60.8% as at 30 November 1994 and a transfer of approximately R459 million. Subsequent valuations using improved data reflected higher funding percentages. The respondents challenged the actuary’s determination, and the High Court set it aside.

The appeal was upheld with costs, including the costs of two counsel. The order of the High Court was set aside and replaced with an order dismissing the application with costs.

The case is important for clarifying that actuarial determinations under pension fund legislation are not exact mathematical exercises but involve professional judgment and assumptions. It affirms judicial deference to expert actuarial methodology where regulations expressly rely on such expertise and provides guidance on the review of administrative action involving technical discretion, particularly in the pension fund context.