In a landmark ruling, the Constitutional Court of South Africa handed down a judgment on 2 August 2023 that could have far-reaching implications for pension funds and their members. The case, Mudau v Municipal Employees Pension Fund and Others, centered around a dispute over a withdrawal benefit claim from the Municipal Employees’ Pension Fund – a registered pension fund in terms of the Pension Funds Act 24 of 1956.
At the heart of the matter was whether or not a pension fund could apply a retrospective rule amendment prior to its registration by the Registrar of Pension Funds. In its ruling, the Constitutional Court held that it could not. Leave to appeal was granted and the appeal was upheld. The order of the Supreme Court of Appeal was set aside and replaced with an order dismissing the appeal with costs.
This ruling is significant as it clarifies the rights and obligations of pension funds and their members when it comes to amending rules and calculating benefits. It serves as a reminder that pension funds must follow due process when making changes that could affect their members’ benefits.
