DE BEERS PENSION FUND

Transcription

1 DE BEERS PENSION FUND SCHEDULE OF RULINGS As at May 2013 Page 1 of 29

2 DE BEERS PENSION FUND SCHEDULE OF RULINGS RULING 1. FUNDING OF PAST SERVICE Funding by Employers for the past service of employees admitted to the Fund shall be in terms of the following formula: Monthly salary at date of transfer X *17,5 X Number of months previous service worked *This is always equivalent to the total of the members plus employers contribution rates. 2. ADDITIONAL PENSIONS 2.1 NORMAL AND EARLY RETIREMENT The contributions in respect of additional service purchases by members attracts interest at a rate determined by the Actuary each year. The additional pension payable is calculated as per the following formula: Contributions plus accumulated interest = Total additional annual pension 13,5 However, if a member elects to receive the higher spouse s and children s pensions in terms of Rule 4.2.5, the additional pension is calculated as follows: Contributions plus accumulated interest = Total additional annual pension 11,717 The member may commute up to 1/3 of the pension. 2.2 ILL HEALTH RETIREMENT The contributions in respect of additional service purchases by members attracts interest at a rate determined by the Actuary each year. The additional pension payable is calculated as per the following formula: Contributions plus accumulated interest = Total additional annual pension Age-related factor as per Ruling 4 The member may commute up to 1/3 of the pension for all of the above forms of retirement. Rule A2.4.2 (Old rule 12.2) Rule A2.3.1 & 2 Rule A (Old rule 11.2) Rule A4.2.5 Rule A2.3.1 & 2 Rule (Old rule 11.2) 16 June June August March Page 2 of 29

3 RULING 3. EARLY RETIREMENTS 3.1 DISCOUNTED PENSION Rule A3.3.1 & 2 (Old rule 13.27) a) RULINGS APPLICABLE TO 31 MAY 1990: It was reported that the amount of pension payable to a member who takes an early retirement under age 55 years shall be determined at 2% of pensionable salary for each year of pensionable service reduced by 0,5% for each month of uncompleted service to normal retirement age. A member who retires in terms of this rule is entitled to the annual bonus pension awarded to pensioners. In the case of female members who elected a retirement age of 55. They may proceed on early retirement at any age between 50 and 55, but they will not be grated any increase in their pension until they reach the ages of 55. b) RULING APPLICABLE FROM : Members 50 years of age and older, who retire in terms of Rule A3.3.2 will receive a pension discounted by nought point five per cent (0,5%) for each month of uncompleted service to normal retirement age. These pensions will attract the annual increases awarded to pensioners. Members 55 years of age and older, who retire in terms of Rule A3.3.2 after 6 June 1996 will receive a pension discounted by nought point two five per cent (0,25%) for each month of uncompleted service to normal retirement age. These pensions will attract the annual increases awarded to pensioners. In the case of female members who joined the Fund before the first day of May 1979 and who elected to retire at the age of 55 years may proceed on retirement in terms of Rule A3.3.2, at any age between 50 and 55 and may elect to take an undiscounted pension with no annual increases until they reach the age of 55 or receive a pension discounted by nought point two five per cent (0,25%) for each month of uncompleted service to normal retirement age, this pension will attract the annual increases awarded to pensioners. c) RULING APPLICABLE FROM : Members 50 years of age and older, who retire in terms of Rule A3.3.2 will receive a pension discounted by nought point five per cent (0,5%) for each month of uncompleted service to age 55 and nought point two five per cent (0,25%) to normal retirement age. These pensions will attract the annual increases awarded to pensioners. 28 August October February June September February Page 3 of 29

4 RULING 3.2 UNDISCOUNTED PENSION Rule A3.3.1 & 2 (Old rule 13.27) a) RULING APPLICABLE TO 31 MAY 1990: Members who take an early retirement at age 55 years or over will not be entitled to the annual bonus awarded to pensioners until the member reaches normal retirement age. b) RULING APPLICABLE FROM 1 JUNE 1990: Members at the age of fifty-five (55) years or older who retire in terms of Rule A3.3.2 will be entitled to elect at their option an undiscounted pension. These pensions will not attract the annual increases awarded to pensioners until the member reaches the normal retirement age. 4. COMMUTATION FACTORS Rule A4.2.1 & 2 (Old rules & ) AGE FACTOR AGE FACTOR AGE FACTOR Late retirement Normal retirement Early retirement Ill-health retirement The factor to be used for Members who elect to receive a higher Widow / Widower and Child s pension in terms of Rule A4.2.5, shall be 11, INTEREST ON DEATH BENEFIT ANNUITIES Interest at a rate to be determined by the Trustees from time to time will be credited to the dependants death benefit account on the balance standing to their credit. 16 June February June Rule A June Rule A5.2.3 (Old rule (c)) 16 January Page 4 of 29

5 RULING 6. INTEREST RATE ON CONTRIBUTIONS a) RULING APPLICABLE FROM JULY 1991 TO SEPTEMBER 1996 The rate of interest payable on members' contributions shall be established on the last working day of each month and is based on the average of 8 specified financial institutions. b) RULING APPLICABLE FROM SEPTEMBER 1996 The rate of interest on contributions be calculated every 6 months and that this be based on the average rate of the four major banks in respect of the 6 month fixed term deposits. 7. LATE RETIREMENT APPLICABLE FROM 1 JUNE 1990 a) In the case of a deferred pension, the pension will not share in annual bonus pensions but will be increased by 1% for each completed month from normal retirement date to actual retirement date. b) Where a member elects to continue contributing after normal retirement age, the pension shall be increased by 0,25% for each completed month from normal retirement date to actual retirement date. 8. DEFERRED PENSIONS (Other than those deferred on retirement in terms of Rule A3.5.2 (b)) Between the date of deferment and normal pension age, deferred pensions shall be increased on the same basis and at the same rate as the annual increases granted to pensioners. 9. FACTORS FOR MEMBERS ACCRUED PENSIONS ON WITHDRAWAL Table with effect from 1 December AGE AGE AGE AGE Def : Accumulated Contributions (Old rule 3.1) Def : Accumulated Contributions (Old rule 3.1) Rule A3.5.2 (b) (Old rule (b)) Rule A3.5.2 (c) (Old rule (c)) Rule A8.4.1, 2 & 3 (Old rule 13.26) Rule A8.1.1 (Old rule (a)) 18 July February February November (a) 6 December Page 5 of 29

6 RULING The preservation amount of Members who had transferred to the Fund from either the Anglo American Pension Fund or the De Beers Industrial Group Pension Fund on either 1 March 1998, 1 April 1998 or 1 July 1998, shall be subject to a minimum of the Rand value of the benefit they would have received had they left on the transfer date, based on the salary and service as at that date. 10. RE-INSTATEMENT OF WIDOWS PENSIONS Agreed to re-instate suspended pensions at the rate the pension would have been had the pension continued. Re-instatement date : 01 June EARLY RETIREMENT BETWEEN AGES Where a member elected a "no increase" early retirement, then this will apply to the total pension inclusive of voluntary additional pension. 12. UNDERGROUND WORKERS EARLY RETIREMENTS a) Discounting will apply from actual retirement date to the adjusted (underground service) date. b) Increases will apply from the adjusted date. 13. HOLIDAY LEAVE ALLOWANCES (SECONDEES) Secondees salary payable in RSA would be deemed to include the HLA and secondees would contribute 7,5% of the "home based" salary. 14. LATE PAYMENT OF COMMUTATION Agreed to pay interest at the rate applicable to death benefit annuities and additional voluntary contributions. 15. REFUND OF DEFERRED PENSION On the withdrawal of a members' interest in the Fund subsequent to deferring his pension the member shall be entitled to the benefit that would have been determined at the original deferment date in terms of Rule A8.0.0 "WITHDRAWAL BENEFITS". The benefit will accrue interest from the date of the original deferment to the date of payment at the annual rate of interest applicable to death benefit annuities. (Old rule (a)) Rule A3.3.1 & 2 (Old rule 13.27) Rule A3.3.1 & 2 (Old rule 13.27) Rule A9.3.2 (Old rule ) Rule A8.4.1, 2 & 3 28 June June June June August January Page 6 of 29

7 RULING 16. RETRENCHMENTS Eligibility of deferring a pension Retrenchees those service is greater than five years may defer their pensions, effective 1 June 1990 (Rule No. A8.2.1 and A8.4.0). Members who are 55 years or older and who are retrenched from the service of an employer may elect to receive a pension and that no discounting will be applied to their pensions and the members will be entitled to all pension increases. This ruling will remain in force until 31 December Rule A3.3.1 (Old rule 13.27) 22 February March Amended : Trustees resolution 23 October September Subject to specific directives from the Company, this ruling is extended to 30 June Ruling amendment: a) The cut off date of 30 June 1994 to be extended indefinitely. 20 January b) All retrenchments must be authorised by the General Manager of the office/mine where the member is employed. 17. RETRENCHMENTS KIMBERLEY AND PREMIER MINES Members who are 50 years of age and older who are retired from Kimberley and Premier Mines during 1992, may elect to receive a pension either with no discounting and no increases until age 55 or, the pension being discounted to age 55 and all pension increases being granted. 18. INTEREST ON WITHDRAWAL Interest is to be paid on the "Cash value" of withdrawals during the three month waiting period following resignation or retrenchment. The interest applied to accumulated member s contributions in the month of withdrawal from the Fund will be the interest rate applied to the cash value of withdrawals for the three months waiting period. 19. CHILD/STUDENT PENSIONS The last day of the month in which the child/student turns 18/25 years old shall be deemed to be the last day for which he/she shall receive a pension. Rule A3.3.1 & 2 (Old rule 13.27) Rule A8.1.1 Rule A8.3.2 (Old rule & 13.23) Rule A7.2.0 (Old rule 13.13) 14 April April 1992 Trustees resolution Replaced by Ruling October 1992 Trustees resolution 5 March August Page 7 of 29

8 RULING 20. APPORTIONMENT OF THE PRESERVED WITHDRAWAL BENEFIT The calculation of the portion of the withdrawal benefit that may be preserved shall be determined according to the following formula. X = Y - (Y x C) Z Where: X=Preserved apportioned benefit Y=Preserved withdrawal benefit Z=Cash withdrawal benefit C=Amount elected to be paid in cash This ruling applies only in respect of transfers to approved retirement annuities and pension funds. Apportionment of the preserved withdrawal benefits in respect of transfers to approved preservation funds is not permitted. 21. RETRENCHMENTS (AGES 50 TO 55) For the ensuing period ending 31 December 1993, members between the ages of 50 and 55, may elect to receive a pension on the basis of either: Rule A8.0.0 (Old rule & 13.23) Rule A3.3.1 & 2 (Old rule 13.27) 13 August December October 1992 Trustees resolution a) No discounting and no pension increases until age 55, or b) Discounting of 0,5% per month from retirement date to age 55 with all pension increases being granted. Subject to specific directives from the Company, this ruling is extended to 30 June Ruling amendment: 9 September a) The cut-off date of 30 June 1994 to be extended indefinitely. 20 January b) All retrenchments must be authorised by the General Manager of the office/mine where the member is employed. 22. CHILD'S PENSIONS In circumstances where a child whose guardian is not in receipt of a pension from the Fund and that child's pension would be reduced as a result of the adjustment to widow/widower pensions made on 1 August 1992, that child's pension shall not be reduced to allow for the increase given to a widow/widower. 23. ADVANCES MADE ON DEATH BENEFITS Management may advance to the widow or widower of a member who has died in service an amount, to cover funeral expenses, subject to a maximum of 10% of the member's death benefit. Rule B (Old rule 14.8) Rule A5.1.1 (Old rule ) 14 April November June Page 8 of 29

9 RULING 24. UNPAID LEAVE WAIVER OF CONTRIBUTIONS a) Members who take unpaid leave will be granted a period of one month from the date they return from such leave in which to elect and advise the Fund, in writing, whether they wish to contribute to the Fund in respect of the unpaid leave period. They will then be granted a further period of two months in which to effect payment. Failure to do so, will be deemed to be an election not to contribute and the amount of the pension to which the member would become entitled under the rules would be reduced accordingly. b) The Trustees will only decide on the eligibility regarding the death benefit should the member die whilst on unpaid leave. c) The member must be advised in writing of his rights in terms of this ruling. 25. DELETED 26. CHILDREN'S PENSIONS OVER THE AGE OF 18 YEARS For the purposes of interpreting Rule A7.2.1(b) the Trustees agreed that management must exercise their discretion in the interpretation of what constitutes "formal study at an educational institution approved by the Trustees". 27. EARLY RETIREMENT OF MIGRANT EMPLOYEES WHO WERE ON AN ALLOWANCE SCHEME The penalties applicable to early retirement shall not be imposed on migrant employees who would have been eligible to retire at age 55 in terms of an allowance scheme and were in service on 1 June 1979 and who elect to retire between the ages of 55 and 60 years. [Refer to minute dated 18 October 1979]. 28. ILL-HEALTH APPLICATIONS - PAYMENT FOR SPECIALIST OPINIONS Management may at its discretion obtain opinions from specialists concerning the validity of certain ill-health applications, the costs of which shall be treated as an expense against the Fund. 29. DEATH BENEFIT DISTRIBUTION AND PAYMENT That management follows the decision tree as set out on Annexure 1 to the ruling. (Annexure 1) 30. PRESERVATION FUNDS Ex-members who wish to preserve their withdrawal benefit in a preservation fund may do so in any such fund that provides in their rules a provision stipulating the extent to which withdrawals may be made before retirement. The minimum age prior to which an ex-member may not be allowed to make any withdrawals shall be 55. Rule A2.2.0 (Old rule 11.1) 4 November Rule A September Rule A January Rule A June Section 37C of the Act 5 September Rule A September Page 9 of 29

10 RULING 31. BAD DEBTS The Trustees resolved that management were authorised to approve write-offs below an amount of R4987. Management is authorised to write off small debts owing to the Fund where the individual amount does not exceed R2 000, INTEREST RATE ON LATE PAYMENTS The interest rate applicable to late payments shall be the rate applicable to the Fund s Standard Bank cash management arrangement as at the end of each month (or nearest working day) effective from the 1st day of the following month and shall be used for the whole of that month. (E.g. if the rate is 3.5% on 30 September then the rate to be used for the period 1 October to 31 October shall be 3,5%) B March 2013, Rule B September September A register shall be maintained of all rates so determined. The interest rate to be used shall be the 32 day call deposit rate at Standard Bank as at the 15th of each month (or nearest working day) effective from the 1st day of the following month and shall be used for the whole of that month. (E.g. if the rate is 12,5% on 15 October 1998 then the rate to be used for the period 1 November to 30 November 1998 shall be 12,5%) 4 December A register shall be maintained of all rates so determined. Simple interest rates will be utilised with the interest being capitalised annually from the date the payment first became due and payable. All calculations must be dated and signed. 33. MAXIMUM MONTHLY REMUNERATION This ruling was withdrawn by the Trustees 23 June The regular monthly remuneration limit for children who are older than 18 years of age and are eligible for a child s pension in terms of Rule (b) be increased from R to R with effect from 1 March PROCEDURE TO BE FOLLOWED IN ORDER TO CONSTITUTE THE BOARD OF TRUSTEES The seven Elected Trustees shall be nominated/elected as follows: a) Four shall be nominated by the National Union of Mineworkers (NUM) representing Members who are members of NUM, and Pensioners who were Members of NUM at the date of their retirement: Provided that at least one of the four nominees shall be a NUM Pensioner. b) One shall be elected by Members who are not members of NUM. c) Two shall be Pensioners elected by Pensioners who were not members of NUM at the date of retirement or NUM pensioners who elect in writing to not be represented by NUM. Rule A7.2.1(b) 24 March Rule B1.3.5 September Page 10 of 29

11 The electoral official shall be the internal auditor to the Fund. The electoral official shall review the election process in totality and, if satisfied, certify the election to have been procedurally free and fair and list the names of the person/s nominated/elected as Trustees. The certificate and list of names shall be submitted to the Trustees. Provided that in respect of both nominated and elected Member (including Pensioner) Trustees in each constituency (as specified in (ii) below), the following shall apply (i) The electoral official in collaboration with the Principal Officer shall apply the nomination procedure whereby it is required that a nomination form be signed by three Principal Members/Pensioners from the relevant constituency. (ii) Trustees will be chosen/voted for from three constituencies as follows (i) (ii) (iii) Four Trustees from the NUM constituency, at least one of which must be a NUM Pensioner. This process will be administered by NUM and NUM will supply the Principal Officer with the names of the Trustees; One Trustee from the Non-NUM active Member constituency; and Two Trustees from the Non-NUM Pensioner constituency. (iii) The electoral official in collaboration with the Principal Officer shall conduct the election where applicable by secret / mail ballot. (iv) (v) In the event of more than one candidate being nominated for each Trustee vacancy in a constituency, an election as detailed above shall follow for the appointment of Trustees. Candidates receiving the highest number of votes in each constituency shall be elected to fill the Trustee vacancies: Provided that in the event of a tie in the final number of votes cast, lots shall be drawn by the Principal Officer in the presence of the electoral official to determine the successful candidates. (vi) In the event of the number of nominated candidates not exceeding the number of Trustee vacancies for a particular constituency, those persons nominated will automatically be appointed to the vacancies without the need for any vote. (vii) The electoral official shall, following an election, retain a full record of the nominated candidates and the number of votes cast in each constituency for a period of three years. (viii) Any vacancy that arises among the Member-elected Trustees in a constituency shall be filled as contemplated in the rules. The board may at any stage decide whether it is necessary to appoint alternate trustees and if so, may decide the number of alternate trustees that are necessary and the process that is to govern their appointment/election. Page 11 of 29

12 Candidates who have been nominated will be required to sign the declaration approved at the June meeting. The seven Elected Trustees, their primary and secondary alternates, shall be nominated/elected as follows: d) Three shall be nominated/elected by the National Union of Mineworkers (NUM) representing Members who are members of NUM, and e) One shall be nominated/elected by NUM representing Pensioners who were members of NUM at the date of retirement and f) Two shall be elected by Members who are not members of NUM, and g) One shall be a Pensioner elected by Pensioners who were not members of NUM at the date of retirement. B1.3.5 June 2007, The Trustees shall, jointly by majority vote, appoint the electoral official who shall issue a certificate stating that a nomination has been made or an election had been held. The official shall list the names of the person/s elected as Trustees and alternate Trustees and shall certify an election to have been procedurally free and fair, which certificate shall be submitted to the Trustees. Provided that in respect of both nominated and elected Member (including Pensioner) Trustees in each constituency (as specified in (ii) below), the following shall apply (i) The electoral official in collaboration with the Principal [Executive] Officer shall apply the nomination procedure whereby a nomination form is signed by [10] 3 Members/Pensioners from the relevant constituency. (ii) The Members will vote within 4 constituencies for their representatives as follows (iv) (v) (vi) (vii) 3 active NUM member representatives; 1 NUM pensioner representative; 2 Non-NUM active member representatives; 1 Non-NUM pensioner representative. (iii) The electoral official in collaboration with the Principal Officer shall conduct the election by secret / correspondence ballot. (iv) The appointment of primary and secondary alternates in each constituency shall be subject to the number of the nominated candidates exceeding the number of Trustee vacancies. (v) In the event of more than one candidate for each Trustee vacancy in a constituency, an election as detailed above shall follow for the appointment of Principal Trustees and their primary and secondary alternates; (vi) Candidates receiving the highest number of votes in each constituency shall be elected to fill the Principal Trustee vacancies: provided that in the event of a tie in the final number of votes cast, lots shall be drawn to determine the successful candidates; (vii) Any excess of candidates over vacancies in a constituency shall be appointed (based on the number of votes cast) to substitute each Principal Trustee. The excess will first be used to fill the positions of primary alternates for each Principal Trustee and thereafter the positions of secondary alternates: Provided that incumbents with no primary and/or secondary alternates, shall personally make appropriate appointments and if they fail to do so, these alternates will be appointed by the Principal Employer. (See also (xi and xii) below applicable to excess candidates). Page 12 of 29

13 (viii) In the event of the number of candidates not exceeding the number of Principal Trustee vacancies, those nominated are automatically appointed to the vacancies: the shortfall in the number of elected candidates for the primary and secondary alternate positions shall in such event be filled by persons nominated by the Principal Trustee. Where alternates fail to be thus appointed, the Principal Employer will appoint alternates. (ix) In the circumstances alluded to in subparagraph (viii) above, all primary and secondary alternates will personally; in the case of the 2 NUM constituencies, be appointed by NUM; and in the case of the 2 non-num constituencies, be appointed by the incumbents to substitute in their stead so as to ensure that every member-constituency is appropriately represented for the purpose of meetings. Where alternates fail to be thus appointed, the Principal Employer will appoint alternates. (x) In the event that the number of candidates is insufficient to fill all the Principal Trustee vacancies in a constituency, then these vacancies will be filled as follows: in the 2 NUM constituencies, by appointments made by NUM, or failing NUM by the Principal Employer; and in the 2 non-num constituencies, by appointments made by the Principal Employer; The primary and secondary alternates in respect of these principal Trustees vacancies will be filled as in subparagraph (ix) above. (xi) The electoral official shall, following an election, retain a full record of the nominated candidates and the number of votes cast in each constituency for a period of 3 years. (xii) Should a vacancy arise among the Member Trustees in a constituency during the term of office of an appointed Trustee for any reason, the nominee who had the next most number of votes in the immediate preceding election and/or had been appointed as primary or secondary alternates by the departing Trustee shall be appointed to the vacancy and shall hold office for the remainder of the original Trustee s term of office. NOTE: A REFERENCE TO PENSIONER(S) BELOW SHALL INCLUDED DEFERRED PENSIONERS AND PAID-UP PENSIONERS Rule AB June The seven Elected Trustees, their primary and secondary alternates, shall be nominated/elected as follows: h) Three shall be nominated/elected by the National Union of Mineworkers (NUM) representing Members who are members of NUM, and i) One shall be nominated/elected by NUM representing Pensioners who were members of NUM at the date of retirement and j) Two shall be elected by Members who are not members of NUM, and k) One shall be a Pensioner elected by Pensioners who were not members of NUM at the date Page 13 of 29

14 of retirement. RULING The Trustees shall, jointly by majority vote, appoint the electoral official who shall issue a certificate stating that a nomination has been made or an election had been held. The official shall list the names of the person/s elected as Trustees and alternate Trustees and shall certify an election to have been procedurally free and fair, which certificate shall be submitted to the Trustees. Provided that in respect of both nominated and elected Member (including Pensioner) Trustees in each constituency (as specified in (ii) below), the following shall apply (i) The electoral official in collaboration with the principal officer shall apply the nomination procedure whereby a nomination form is signed by 10 Members/Pensioners from the relevant constituency. (ii) The Members will vote within 4 constituencies for their representatives as follows (viii) (ix) (x) (xi) 3 active NUM member representatives; 1 NUM pensioner representative; 2 Non-NUM active member representatives; 1 Non-NUM pensioner representative. (iii) The electoral official in collaboration with the Principal Officer shall conduct the election by secret / correspondence ballot. (iv) The appointment of primary and secondary alternates in each constituency shall be subject to the number of the nominated candidates exceeding the number of Trustee vacancies. (v) In the event of more than one candidate for each Trustee vacancy in a constituency, an election as detailed above shall follow for the appointment of principal Trustees and their primary and secondary alternates; (vi) Candidates receiving the highest number of votes in each constituency shall be elected to fill the principal Trustee vacancies: provided that in the event of a tie in the final number of votes cast, lots shall be drawn to determine the successful candidates; (vii)any excess of candidates over vacancies in a constituency shall be appointed (based on the number of votes cast) to substitute each principal Trustee. The excess will first be used Page 14 of 29

15 RULING to fill the positions of primary alternates for each principal Trustee and thereafter the positions of secondary alternates: Provided that incumbents with no primary and/or secondary alternates, shall personally make appropriate appointments and if they fail to do so, these alternates will be appointed by the Principal Employer. (See also (xi and xii) below applicable to excess candidates). (viii)in the event of the number of candidates not exceeding the number of principal Trustee vacancies, those nominated are automatically appointed to the vacancies: the shortfall in the number of elected candidates for the primary and secondary alternate positions shall in such event be filled by persons nominated by the Principal Trustee. Where alternates fail to be thus appointed, the Principal Employer will appoint alternates. (ix)in the circumstances alluded to in subparagraph (viii) above, all primary and secondary alternates will in the case of the 2 NUM constituencies, be appointed by NUM; and in the case of the 2 non-num constituencies, be appointed by the incumbents personally; to substitute in their stead so as to ensure that every member-constituency is appropriately represented for the purpose of meetings. Where alternates fail to be thus appointed, the Principal Employer will appoint alternates. (x) In the event that the number of candidates is insufficient to fill all the Principal Trustee vacancies in a constituency, then these vacancies will be filled as follows: in the 2 NUM constituencies, by appointments made by NUM, or failing NUM by the Principal Employer; and in the 2 non-num constituencies, by appointments made by the Principal Employer; The primary and secondary alternates in respect of these principal Trustees vacancies will be filled as in subparagraph (ix) above. (xi) The electoral official shall, following an election, retain a full record of the nominated candidates and the number of votes cast in each constituency for a period of 3 years. (xii) Should a vacancy arise among the member Trustees in a constituency during the term of Page 15 of 29

16 RULING office of an appointed Trustee for any reason, the nominee who had the next most number of votes in the immediate preceding election and/or had been appointed as primary or secondary alternates by the departing Trustee shall be appointed to the vacancy and shall hold office for the remainder of the original Trustee s term of office. 35. PENSION INCREASES Taking into account the requirements of the Pension Funds Act, the Fund aims to grant a pension increase to existing pensioners and deferred and paid up pensioners on 1 January each year, subject to the affordability thereof by the Fund as determined by the Trustees. Rule A September 2008, The annual pension increase is targeted, but not guaranteed, to be equal to the year-on-year increase in the "Headline" Consumer Price Index (as published by the South African Department of Statistics) up to the preceding 30 September. Defined Benefit pensioners that have been on pension for less than 12 months as at the pension increase date will receive an increase pro rated in accordance with the period following their attainment of the age of 55 or 60 (whichever is applicable). The pro-rated basis means that if the new pensioner had been in receipt of a pension for 5 months at the date of the first increase in his or her pension, he or she will receive an increase equal to 5/12 th of the pension increase granted at that date. It is specifically provided that for members who retire before the age of 55 (in terms of retrenchment conditions) and between the ages of 55 and 60 (standard early retirement conditions) and who elect to receive no pension increase up to age 55 or age 60 (whichever is applicable), the first pension increase received after he/she turns 55 or 60 (whichever is applicable) will be pro-rated based on the period from the date of the attainment of age 55 or age 60 (whichever is applicable) to the applicable pension increase date. It is noted that the DC Pensioner Pool will be merged with the DB pensioner pool with effect from 1 November 2008 The DC pensioners so merged will receive a pro rated increase for the period they have been on retirement subject to a maximum period of 6 months counting if the pensioner retired on or before 30 June Taking into account the requirements of the Pension Funds Act, the Fund aims to grant a pension increase to existing pensioners and deferred and paid up pensioners effective from 1 January each year, or effective from such other date that the Trustees may decide, subject to the affordability thereof by the Fund as determined by the Trustees. March The annual pension increase considered for implementation annually on 1 January is targeted, but not guaranteed, to be equal to the year-on-year increase in the "Headline" Consumer Price Index (as published by the South African Department of Statistics) up to the preceding 30 Page 16 of 29

17 September. [Defined Benefit] Pensioners that have been on pension for less than 12 months as at the pension increase date will receive an increase pro rated in accordance with the period following their attainment of the age of 55 or 60 (whichever is applicable). The pro-rated basis means that if the new pensioner had been in receipt of a pension for 5 months at the date of the first increase in his or her pension, he or she will receive an increase equal to 5/12 th of the pension increase granted at that date. It is specifically provided that for Defined Benefit section pensioner members who retire before the age of 55 (in terms of retrenchment conditions) and between the ages of 55 and 60 (standard early retirement conditions) and who elect to receive no pension increase up to age 55 or age 60 (whichever is applicable), the first pension increase received after he/she turns 55 or 60 (whichever is applicable) will be prorated based on the period from the date of the attainment of age 55 or age 60 (whichever is applicable) to the applicable pension increase date. For any increase prior to 1 July 2009, pensioners who were members of the Defined Contribution section who were in receipt of a pension as at 1 July 2008 will have their increase prorated for the period 1 July to the date of the increase. Defined Contribution pensioners who went on retirement after 1 July 2008 will have their increase prorated in the same manner as Defined Benefit pensioners. [It is noted that the Defined Contribution Pensioner Pool will be merged with the Defined Benefit pensioner pool with effect from 1 November 2008 The Defined Contribution pensioners so merged will receive a pro rated increase for the period they have been on retirement subject to a maximum period of 6 months counting if the pensioner retired on or before 30 June 2008.] In granting pension increases, the Trustees will act on the advice of the Actuary, taking into account, but not bound by, the increase in the official consumer price index for the year to 30 September each year. Rule A December Refer to the Pension Increase Policy 24 March INCREASES TO PAID-UP PENSIONS Increases to paid-up pensioners shall be made each year at the average rate of salary increase pertaining to the grading band applicable to each paid-up pensioner at the time he/she became a paid-up pensioner. 37. ILL-HEALTH RETIREMENT : DETERMINATION OF BENEFIT In respect of members who joined the Fund prior to 4 December 2001, if a member receives an ill-health retirement benefit in terms of rule A3.4.5, provided he has at least three years pensionable service, projected service shall be taken into account in the determination of his Rule A December Rule A December Page 17 of 29

18 benefit. If a member who joined the Fund after 4 December 2001 receives an ill-health retirement benefit in terms of rule A3.4.5, projected service will not be taken into account in the determination of his benefit. 38. DEATH BENEFITS DEATH IN SERVICE In respect of members who joined the Fund prior to 4 December 2001, if a member dies in terms of this rule, provided he as at least three years pensionable service, the increased benefit in terms of rule A5.1.1 (a) shall be payable. If a member who joined the Fund after 4 December 2001 and dies and is due a benefit in terms of A5.1.1 (b) the increase benefit in terms of rule A5.1.1 (a) shall not be payable. 39. SETTING UP OF PENSIONS Where the member elects to purchase a life annuity with the full value of his retirement benefits (less any commutation amount), then the Trustees require the member to provide in the purchased pension for: Rule A5.1.1(b) 4 December Rule B September A spouse pension of at least 50% of the pension (if married at retirement) future pension increases RULING Where the member elects to purchase a living annuity, with the full value of his retirement benefits (less any commutation amount), then the Trustees require a member declaration indicating that financial advice has been obtained and that the member understands the financial and mortality risks associated therewith. 40. RECOGNITION OF WIDOW/WIDOWER PENSIONS That, for the payment of widow/widower pensions the Fund recognises relationships of mutual dependency with the MEMBER, living together as if married with the commitment of doing so permanently and had been so cohabiting for 1 year or more. 41. CESSATION OF CHILD S PENSION Payment of the extended benefit would be subject to proof of enrolment bi-annually; submission of passrates/symbols annually continuation of payment would cease on failure in 2 consecutive years of study. 42. APPLICATIONS FOR ILL-HEALTH RETIREMENT The ill-health sub-committee be permitted to review applications and decide on the awarding of ill-health retirements in line with the following guidelines Definition of WIDOW/ WIDOWER 7 December Rule A7.2.1 (b) 7 March Rule A March Page 18 of 29

19 1. Independent medical report(s) must be obtained to establish the extent of the disablement (i.e. permanent, temporary, chances of full recovery and/or rehabilitation); 2. Funds medical consultant to express an opinion based on the report(s) and findings; 3. Sub-committee s final decision as to payment/declining of claim to be decided by consensus by all sub-committee members by signature of the decision. RULING Provided that each case would finally be determined on its own merits and that these guidelines would constitute no more than general policy provisions to be applied equitably to each case referred to the sub-committee. 43. APPLICATIONS FOR CHILD CONTINUATION PENSIONS BY PHYSICALLY OR MENTALLY HANDICAPPED CHILDREN OF DECEASED MEMBERS The ill-health sub-committee be permitted to review applications for life child pensions and extend payment where the child is physically or mentally handicapped in line with the following guidelines Rule A7.2.1 (b) 7 March An independent medical report as to the level of incapacity and permanency of the medical condition; 2. The Funds medical consultant to express an opinion based on the report; 3. The sub-committee s final recommendation as to continuation of a child s pension to be decided by consensus by all sub-committee members by signature of the decision. Provided that each case would finally be determined on its own merits and that these guidelines would constitute no more than general policy provisions to be applied equitably to each case referred to the sub-committee. 44. ANNUAL PENSIONER BONUS With effect from December 1998 the Trustees in line with Rule A4.3.0 approved an annual bonus equivalent to 60% of monthly pensions in payment in lieu of a special 5% pension increase. 45. PURCHASE OF AN ANNUITY FROM AN OUTSIDE INSURER ON RETIREMENT Members retiring in terms of rules A3.2.0 (Normal retirement), A3.3.0 (Early retirement from age 50) and A3.5.0 (Late retirement after age 60 up to 65) may elect to purchase a pension from an insurer in terms of rule B at the date of retirement. Members retiring in terms of A3.4.0 (ill health retirement) may not elect this option. The amount available for the purchase of a pension from an insurer is determined as follows: A September B March 2010, A. Members who elect not to receive any pension from the Fund. Page 19 of 29

20 Where as a result of the member s election no pension will be payable from the Fund, the amount available to purchase a pension will be determined by applying the member s early retirement pension (without the early retirement adjustment) or the late retirement pension (with the late retirement adjustment) to the following factors. The member may elect to take up to 1/3 of this amount by way of a cash commutation in terms of rule A AGE AGE The above-mentioned factors are applied as follows: Factors 50 to 59 apply to the early retirement pension without early retirement adjustment. Factor 60 applies to the normal pension. Factors 61 to 65 apply to the late retirement pension with enhancement. B. Members who elect to receive a portion of the pension from the Fund. A member may elect to receive a portion (if any) of the one third commutation (as determined in rule A4.2.0) in cash. Thereafter he may elect to apply [the whole or] a portion of the balance of the retirement benefit (as determined by the actuary)[one-third commutation (as determined in rule A4.2.0)] to purchase a pension from an [insurer] insurance company. Thereafter the member will receive the balance of his pension from the Fund. The purchase of any pension from an insurance company must comply with any and all the requirements of the Commissioner of Inland Revenue, as set out in Rule B Members retiring in terms of rules A3.2.0 (Normal retirement), A3.3.0 (Early retirement from age 50) and A3.5.0 (Late retirement after age 60 up to 65) may elect to purchase a pension from an insurer in terms of rule B at the date of retirement. Members retiring in terms of A3.4.0 (ill health retirement) may not elect this option. The amount available for the purchase of a pension from an insurer is determined as follows: Rule B September A. Members who elect not to receive any pension from the Fund. Where as a result of the member s election no pension will be payable from the Fund, the amount available to purchase a pension will be determined by applying the member s early retirement pension (without the early retirement adjustment) or the late retirement pension (with the late retirement adjustment) to the following factors. The member may elect to take up to 1/3 of this amount by way of a cash commutation in Page 20 of 29

21 RULING terms of rule A AGE AGE The above-mentioned factors are applied as follows: Factors 50 to 59 apply to the early retirement pension without early retirement adjustment. Factor 60 applies to the normal pension. Factors 61 to 65 apply to the late retirement pension with enhancement. B. Members who elect to receive a portion of the pension from the Fund. A member may elect to receive a portion (if any) of the one third commutation (as determined in rule A4.2.0) in cash. Thereafter he may elect to apply the whole or a portion of the balance of the one-third commutation (as determined in rule A4.2.0) to purchase a pension from an insurer. Thereafter the member will receive the balance of his pension from the Fund. 46. DEATH BENEFITS TO PENSIONERS The Trustees approved that where the 3 month death benefit is less than R5 919 this amount will be paid to the dependants or nominees The Trustees approved that where the 3 month death benefit is less than R5 610 this amount will be paid to the dependants or nominees The Trustees approved that where the 3 month death benefit is less than R that the sum of R be paid to the dependants or nominees. The increase was in line with increases in pensioner CPI since TYPE OF EDUCATIONAL INSTITUTION Only full time formal study at an educational institution registered with the Department of Education would be considered by management when awarding student pensions (children of deceased members between the ages of 18 and 25). A March 2013 A March A September A7.2.1 (B) 5 March Page 21 of 29

22 RULING 48. BASIS FOR THE CALCULATION OF INTEREST TO BE APPLIED TO MEMBER S ACCUMULATED CONTRIBUTIONS, ADDITIONAL VOLUNTARY CONTRIBUTIONS AND DEATH BENEFIT ANNUITIES. From 1 December 2001, the monthly investment return credited to the member s contributions (including AVC s) and paid on Death Benefit Annuities for a particular month will be determined as the monthly compound investment return for the 60 months ending at the end of the particular month. Where the investment return is not available for the relevant 60 months period, the compound monthly return for the particular month will be determined over a longer period not exceeding 62 months. This longer period will cover the latest available 60 months period available plus the period from the end of the latest available 60 months up to the end of the particular month. 5 March The investment return gross of all taxes and fees will be reduced by an allowance for expenses (including Retirement Funds Tax, fund administration and investment expenses) as determined by the trustees. From 1 December 2001, the deduction will be 0,125% per month. The deduction will be reviewed by the Trustees from time to time but at least with every statutory actuarial valuation of the Fund. 49. CONTINGENCY RESERVES In terms of Rule B1.9.1 (to be revised with effect from 13 September 2001), the Trustees hereby resolve to establish contingency reserve accounts in respect of the following fund contingencies: AIDS Asset/liability mismatching Impact of the Pensions Second Amendment Act, 2001 Additional spouse benefits in respect of deemed marriages Younger normal retirement ages as per conditions of services MOPF transfer The Trustees hereby resolve that the amounts to be allocated to these contingency reserves are as specified in the 1 March 2001 valuation of the Fund. B June The Trustees resolve that any contingency reserve accounts are not distributable to members that exit from the Fund. The Trustees will review the balances in the contingency reserve accounts as part of the actuarial valuation of the fund or more frequently as the Trustees decide. Page 22 of 29

23 50. INTEREST ON ADDITIONAL VOLUNTARY CONTRIBUTION S (AVC s) The Trustees were reminded that at the March 2002 meeting, it was agreed that the interest rate to be applied to members contributions be applied to additional voluntary contributions (5 years fund performance less fund expenses). However, previously, the rate applied to AVC s was a threee year moving average of the Fund s investment performance, there was no deduction for Fund expenses. 7 June The Trustees accordingly approved the following ruling amendment. underlined: Additions were Basis for the calculation of interest to be applied to the member s accumulated contributions, additional voluntary contributions and death benefit annuities. From 1 December 2001 (from 1 July 2001 for current in-service members in respect of AVC s), the monthly investment return credited to the member s contributions (including AVC s) and paid on Death Benefit Annuities for a particular month will be determined as the monthly compound investment return for the 60 months ending at the end of the particular month. Where the Investment return is not available for the relevant 60 months period, the compound monthly return for the particular month will be determined over a longer period not exceeding 62 months. This longer period will cover the latest available 60 months period available plus the period from the end of the latest available 60 months up to the end of the particular month. The investment return gross of all taxes and fees will be reduced by an allowance for expenses (including Retirement Funds Tax, fund administration and investment expenses) as determined by the Trustees. From 1 December 2001, the deduction will be 0,125% per month. The deduction will be reviewed by the Trustees from time to time but at least with every statutory actuarial valuation of the Fund. The deduction in respect of the allowance for expenses will not apply to additional voluntary contributions. The Trustees were reminded that member statements were issued annually for the year ending June each year. The applicable rates to be reported at the September 2002 meeting. Page 23 of 29