Municipal Employees Pension Fund ordered to pay two-pot withdrawal benefit
· Citizen
The Office of the Pension Funds Adjudicator (OPFA) has ordered the Municipal Employees Pension Fund (MEPF) to allow a member access to her two-pot savings withdrawal benefit.
The ruling reinforces the principle that pension funds are bound by their registered rules.
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In a reconsideration ruling issued by Deputy Pension Funds Adjudicator Naheem Essop, the MEPF was directed to provide the complainant with details of her savings account and the process for claiming, and to pay the savings withdrawal benefit within two weeks of receiving her instruction.
The matter centred on a dispute over access to a savings withdrawal benefit under South Africa’s two-pot retirement system.
Access to two-pot savings disputed
The complainant worked for Ba-Phalaborwa Municipality from September 2015 until January 2018, during which contributions were made to the fund.
She applied for a withdrawal benefit when leaving that municipality and started work the following day at Polokwane Local Municipality, which also participates in the same fund.
She lodged a complaint after the fund refused her access to a savings withdrawal benefit, saying she had been informed that she did not qualify because she was not a contributing member.
The complainant argued that her entitlement arose from contributions made during her employment with Ba-Phalaborwa Municipality and sought to withdraw from the fund.
The MEPF maintained that the complainant remained a member when she moved between employers and was therefore not entitled to a resignation benefit.
It argued that both the complainant and her current employer remained liable for contributions from February 2018 onwards and that she would only be entitled to access the two-pot savings component once contributions were brought up to date.
The fund described the complainant as a defaulting active member whose benefits were frozen under its rules, except for a withdrawal benefit upon resignation.
Contributions in arrears
It relied on rule 27(2)(b), arguing that the provision applied to all benefits, including those under the two-pot system, and prevented access to benefits while contributions were in arrears.
The case returned to the adjudicator after the Financial Services Tribunal set aside an earlier determination from April 2025 and sent the matter back for reconsideration.
The tribunal instructed that the key issue was whether the complainant could access her savings withdrawal benefit under the fund’s rules while her contributions were outstanding.
In his fresh determination, Essop found that rule 27(2)(b) does not apply to defined contribution members and therefore could not be used to block the complainant’s access to her two-pot savings withdrawal benefit.
“Fund rules are treated as the fund’s constitution and the fund may act only within the powers conferred by the rules. It is not permissible to venture beyond them,” Essop said.
He added that any deviation would require a formal amendment and registration of the rules.
This article was republished from Moneyweb. Read the original here.