Good day,

We have been communicating on the Rationalisation of Retirement Funds and the window period that was set to commence on the 1st of July 2022, which would allow employees within Local Government the opportunity to move to a fund of their choice.

The freedom of employees to associate (or join) a fund of their choice formed part of the adoption of a Retirement Fund Collective Agreement (RFCA) reached between the South African Local Government Bargaining Council and the labour unions IMATU and SAMWU, and the South African Local Government Association (SALGA). This agreement was signed in 2021 as part of the salary increase agreements in the SALGBC.

All Local Government retirement funds were required to undergo an accreditation exercise to ensure that they met the criteria as set out by the South African Local Government Bargaining Council (SALGBC). The NFMW participated in this exercise, adhered to the set criteria and received confirmation of accreditation from the SALGBC in May 2022.

COMMENCEMENT DATE OF THE WINDOW PERIOD DELAYED

The SALGBC confirmed in its published circular 4/2022, that certain funds indicated that they would not be applying for accreditation and were taking legal action to set aside the RFCA.

One of these funds approached the courts on an urgent basis asking the courts to suspend the immediate implementation of the RFCA, pending hearing of the full facts/arguments of the matter in Court. The Gauteng Division of the High Court agreed that the full facts (called substantive arguments) should be heard in Court first to allow the Court to hear all sides/arguments before the RFCA is implemented. This delays the implementation of the window period and the freedom of association from 1 July 2022 to a date that will be published after the Court has heard the matter. The hearing date for this matter is expected to be around 19 July 2022.

As the NFMW, we believe that the final outcome of the justice system/process will ultimately be for the benefit of all employees/members within Local Government as envisioned by the RFCA.

It is important to note that this is a temporary suspension and has nothing to do with the substantive arguments being advanced by the funds, that are not in favour of giving employees/members the freedom to choose a retirement fund of their choice.

The NFMW confirms its support of the retirement funds restructuring exercise, as we believe that members who are locked into funds due to the current restrictions, should be given the freedom to choose retirement funds that are cost-effectively managed and whose management practices sound governance and responsible investing to provide members with desirable retirement outcomes.

We will, as always, keep you updated on further developments as soon as more information becomes available.

SUBMIT YOUR INFORMATION BY SCANNING THE QR CODE, E-MAILING JOIN@NATIONALFUND.CO.ZA OR BY CLICKING HERE!

Regards,

Mr Leslie Ndawana
Principal Executive Officer.