Pension Fund Second Amendment Bill
Louis Green MP - ACDP
Tuesday, 16 October 2001
Speech on the Pension Fund Second Amendment Bill, by African Christian Democratic Party Deputy President, Louis Green MP given in Parliament today:
The Bill is paving the way for equitable benefits where historically, pension fund payouts lacked legislative security in this regard.
Whatever surplus is accrued by the fund, negotiated arrangements will determine the minimum level or contribution that will be allowed for. This form of equitable or fair value calculation automatically raises the standards and norms of the pension fund industry.
The challenge this Bill offers to the pension fund is clause 15B(4) dealing with redressing past unfair calculation of the pension surplus.
A legal imperative will be placed upon the pension fund industry to re-examine and redress its historical payout scheme. In as much as this clause is laudable, and an acceptable provision, we must ensure that reasonable certainty exists that historical redress is feasible.
Actuarial research into historical data will be costly and probably a lengthly process. The retrieval of historical data as well as the economic assessment of such data may not yield the desired outcomes this bill hopes to achieve.
What is preferably needed is to introduce a formula upon which equitable surplus averages can be calculated against an historically acceptable rate.
Government and the pension fund industry can define a formula upon which such averages can be worked and in order to avoid the possible problems clause 15 B(4) may provide.
The ACDP accepts this Bill as appropriate to the savings needs of our nation’s future.
The idea of inflation-linked adjustments to the pension fund creates reasonable financial security to members.
South Africa needs to boost the savings culture of our nation. This bill subscribes to the right set of principles to follow in this regard.
I thank you.
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For more information please call Louis Green at 083 441 9295 or ACDP Media Liaison Liza Bloemetje at 082 4781037