Retirement Fund Collective Agreement Interdicted

The Gauteng Division of the High Court issued a judgement on 27 June 2022 granting an interim interdict to the Municipal Workers Retirement Fund (MWRF) to restrain the SALGBC from implementing the Retirement Fund Collective Agreement (RFCA) on 1 July 2022.

The interim interdict effectively suspends the implementation of the RFCA, pending the outcome of the review application lodged by the MWRF. The MWRF previously filed a review application, seeking to set aside the RFCA, on the grounds that it interferes with the autonomy of pension funds to regulate their own affairs. Pending that decision, the MWRF also applied for an urgent interdict against the implementation of the RFCA pending the outcome of their review application, which application has now been granted.

The effect of the court order is as follows:

  • The RFCA, except for clause 8 thereof, will no longer take effect on 1 July 2022;
  • Employees will not be able to exercise freedom of association, i.e. freedom to join other funds, as from 1 July 2022; and
  • Municipalities must continue to make contributions to all funds regardless of whether they have been accredited.

The court order will remain in place pending the outcome of the MWRF’s review application.

The interdict does not affect the implementation of clause 8 of the RFCA, which limits new employees to membership of defined contribution funds, sets employer contribution rates at 18% of employees’ gross salary and protects higher contribution rates.

It should be noted that the interdict (court order) does not deal with the merits of the MWRF’s review application nor the case on behalf of the SALGBC and the SALGBC parties. The merits will be properly ventilated when the review application is argued.

The SALGBC’s Pension Fund Task Team will be convened to discuss the judgement and make recommendations to be considered by the Executive Committee at a special meeting to be convened later this week. It must be noted that IMATU has previously proposed, at the last meeting of the Executive Committee held on 23 June 2022, that the implementation of the RFCA should be delayed due to the pending court applications from funds and outstanding accreditation applications.

Members will be advised of the decision of the Special Executive Committee as well as any further developments as soon as more information becomes available.