Victory for Tšehlana

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Prime Minister’s Office, Lehlohonolo Tšehlana
Prime Minister’s Office, Lehlohonolo Tšehlana

Court of Appeal rules former MP free to withdraw pension in full

Lekhetho Ntsukunyane

The Court of Appeal on Friday last week ruled in favour of veteran politician Lehlohonolo Tšehlana in a case in which the Specified Officers Defined Contribution Pension Fund (SODCPF) sought to retain 75 percent of his terminal benefits for investment against his will.

A former Member of Parliament (MP) and leader of Sankatana Social Democratic Party, Mr Tšehlana terminated his SODCPF membership in 2012 and wanted his pension from the Fund as a lumpsum.

However, SODCPF turned down Mr Tšehlana’s request citing a member was not entitled to the money as a once-off payment no-matter the circumstances.

SODCPF is described in court papers as “a corporate body established in terms of Section 4 of the Specified Officers Defined Contribution Pension Fund Act No19 of 2011, whose objective is to provide pension benefits to holders of offices set out in the Schedule”.

As an MP, the court papers indicate Mr Tšehlana was a “specified officer under the Schedule.”

The Fund argued in court that according to “Section 6 as read in harmony with Section 31 of the SODCPF Act No 19 of 2011, a retiree is not entitled to his 75 percent credit as a lumpsum in cash…”

The SODCPF went further to argue “upon the correct interpretation of Section 5 read in harmony with Section 29 of the PODCPF (Public Officers Defined Contribution Pension Fund) Act of 2008, a retiree is not entitled to his or her 75 percent fund credit as a lumpsum in cash irrespective of whether or not such an individual is no longer a member”.

The PODCPF has been described in court papers as “a body established in terms of Section 3 of the PODCPF Act of 2008 for the purpose of providing pension benefits to public officers.” The PODCPF had been cited as the second appellant in the matter.

The two Funds further argued their reasons for retaining the 75 percent cash credit for investment, from which they could continue paying Mr Tšehlana a monthly pension, was to “preserve the pension fund from collapsing and thus not undermine the objective of the social scheme”.

The organisations told the court about several requests made by pensioners to be paid their monies in full, and argued if agreed to, would lead to the collapse of the social scheme.

But Mr Tšehlana submitted Section 6 of the SODCPF Act “imposed membership to the Fund on holders of offices provided for in the Schedule”.

“The section specifically prohibits any serving officer from excluding himself or herself from the Fund, but does not, in any manner whatsoever, extend the same prohibition to those who have retired. The retiree is at liberty to retain or terminate his membership.”

When dismissing the Funds’ appeal on Friday, Justices Jennifer Yvonne Mokgoro, Phillip Musonda and Semapo Peete, noted while they agreed a 75 percent cash withdrawal could  cause “fiscal paralysis and may be unjust to the applicants (SODCPF and PODCPF), the role of the court is to pronounce the law as it is”.

The court then ruled that Mr Tšehlana should access the 75 percent terminal benefits whichever way he wanted.

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