This week saw the promulgation of the Pension Funds Second Amendment Bill, which puts to rest years of wrangling and debate about who is entitled to surpluses which may have built up in retirement funds around the country. The value of the surpluses is estimated at R80 billion.
Importantly the new legislation - the Pension Funds Second Amendment Act - also makes provision for minimum benefits.
The legislation recognises that all stakeholders have a right to share in a surplus - including current fund members, former members and pensioners, deferred pensioners and the employers.
To figure out whether you are entitled to a share of the surplus in your current or a former fund, you first need to find out whether your fund, or former fund, currently has a surplus to share.
Bear in mind, too, that you should not expect a chunk of cash - anything due to you from a surplus will be used to enhance your retirement benefits.
The new legislation also provides for minimum benefits. If you were a member of a retirement fund in the past, going back to January 1, 1980, and got a less than fair withdrawal benefit, your benefit may be topped up to minimum levels if there is sufficient surplus.
Similarly, pensioners who did not get inflation-linked pension increases in the past, will be first to get their benefits topped up in line with inflation when it comes to distributing a surplus. If the fund cannot afford to give pensioners actual inflation-related top ups, funds will have to pay up as they can afford.
After the benefits of former members and pensioners have been topped up, any remaining surplus must shared out among existing members, former members and the employer.
All funds that have a surplus are obliged to draw up a surplus distribution scheme after their next statutory valuation. Funds have to have statutory valuations every three years.
Members must be given details of a surplus distribution scheme and must be given 12 weeks to object to it. A total of 75 percent of members have to approve a surplus distribution scheme the approval of the Registrar of Pension Funds is necessary before any of the surplus can be distributed.
Note that former fund members do not need the assistance of an intermediary to get any share of a surplus rightlfully due to them. All you need to do is to contact the princpal officer of the fund or funds to which you belonged and provide as much information as you can.