Akani Welcomes Tribunal’s Decision on MEPF Board Composition and Pension Fund Rule Amendments

Akani Retirement Fund Administrators (Pty) Ltd is pleased to express its support for the recent ruling made by the Financial Services Tribunal regarding the Municipal Employees’ Pension Fund (MEPF). This decision provides essential clarity on the composition of the MEPF Board and approves amendments to the Fund’s rules, which had been delayed due to concerns raised by the Financial Sector Conduct Authority (FSCA).

The Tribunal's ruling—confirms that the regulator exceeded its authority by failing to approve the submitted rule amendments and name change applications from the Fund. These applications faced prolonged delays primarily due to the FSCA's concerns regarding the MEPF Board's composition. However, the Tribunal determined that these concerns did not justify the indefinite postponement of the application approvals.

The FSCA contended that the Board was not properly constituted, citing alleged non-compliance with the rules governing the election of employee representatives. The Fund countered this assertion by clarifying that election processes were conducted at the municipal level, with results communicated to the Fund by municipal managers, as stipulated in the Fund’s rules.

In its ruling, the Tribunal underscored the necessity for a reasonable approach when addressing administrative processes involving lay boards like the MEPF’s. It pointed out that the FSCA's decision to delay application approvals based on perceived issues with board composition was inconsistent with the powers granted to the regulator under the Pension Funds Act. Additionally, the Tribunal rejected the FSCA's claim that the Fund's failure to involve pensioners in the election of office-bearers constituted a significant violation of the rules, as those rules did not mandate such involvement.

The Tribunal also criticized the FSCA for its inconsistent position on board appointments, noting a contradiction in its objections regarding pensioner representation while 

simultaneously disregarding the appointment of a former employee-trustee, which was made to ensure continuity.

The Tribunal has annulled the FSCA’s decisions to delay or reject the rule amendment and exemption applications, instructing the FSCA to reconsider its invalidation of the MEPF Board's actions. It encouraged both the FSCA and the Fund to adopt a more constructive and collaborative approach in the future, stressing the importance of transparency and accountability.

Akani welcomes the Tribunal's decision, as it provides much-needed legal certainty not only for the MEPF but also for other pension funds facing similar issues. This ruling highlight the critical importance of adhering to the rules and procedures established in the Pension Funds Act while also acknowledging the practical challenges encountered by lay trustees and employee representatives.

Akani remains dedicated to supporting the MEPF in ensuring compliance with all regulatory requirements and urges the FSCA to act swiftly in reconsidering the applications. We call for constructive engagement between the FSCA and the Fund to resolve any unresolved matters.