THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

REPORTABLE
CASE NO 183/06
In the matter between

THE JOINT MUNICIPAL PENSION FUND

First Appellant
THE MUNPEN RETIREMENT FUND

Second Appellant

and

LJ GROBLER

First Respondent
THE PENSION FUNDS ADJUDICATOR

Second Respondent
THE REGISTRAR OF PENSION FUNDS

Third Respondent
J MAHLANGU NO

Fourth Respondent
C MÜLLER NO

Fifth Respondent
_____________________________________________________________________

CORAM:
HOWIE P, NUGENT, HEHER, PONNAN JJA et MUSI
AJA
_____________________________________________________________________

Date Heard:
1 March 2007

Delivered:
30 March 2007
Summary:
Pension fund- whether rules validly empower amendment
depriving member of ‘established benefit’ – whether decision to
amend and validity of amendment can be subject of ‘complaint’
under Pension Funds Act 24 of 1956 to Pension Funds Adjudicator
– whether decision to amend reviewable by High Court in this
case.
Neutral Citation:   This judgment may be referred to as The Joint Municipal
Fund  v LJ Grobler  [2007] SCA 49 (RSA)
_____________________________________________________________________
HOWIE P

HOWIE P
[1] Until his retrenchment the first respondent, Mr Lodewyk Jacobus
Grobler, was in the employ of the first appellant, the Joint Municipal
Pension Fund and a member of the second appellant, the Munpen
Retirement Fund. I shall mostly refer to the appellants as ‘the JMPF’ and
‘Munpen’ respectively and I shall refer to the first respondent by his
surname.
[2] Just under 14 months before Grobler’s retrenchment Munpen’s
trustees, at the request of the JMPF, amended Munpen’s rules and
procured registration of the amendment by the registrar of Pension Funds
under the Pension Funds Act 24 of 1956 (the Act). The rules provide for a
retrenchment benefit. Crucial to the calculation of Grobler’s benefit was
the rules’ definition of ‘pensionable service’. Before amendment the
definition was such that all Grobler’s years in municipal service prior to
employment with the JMPF fell to be included in determining his
‘pensionable service’. The effect of the amendment was that his
pensionable service for purpose of calculating his retrenchment benefit
was limited to the six and a half years of his employment with the JMPF.
The result, needless to say, was that he was paid a very considerably
reduced retrenchment benefit.
[3] In terms of rule 49 of Munpen’s rules, amendments are permitted at
any time provided, among other things, that

‘the value of an established benefit before such amendment shall not be decreased ...’
(There is a provision allowing for a decrease if the fund is in financial
difficulties. It is irrelevant in this case.)
[4] Aggrieved by this outcome, Grobler laid a series of complaints at
various times before the Pension Funds Adjudicator, an official appointed
under the Act to deal with complaints against a pension fund
organisation. (Both appellants are pension fund organisations.)
Essentially, Grobler was throughout concerned about the computation of
his eventual benefit and that concern was inevitably coupled with the
assertion or implication that his benefit had been invalidly reduced by a
rule amendment in conflict with rule 49.
[5] The Adjudicator decided that because the rule amendment had
been registered he had no jurisdiction to consider Grobler’s complaint
about the rule amendment and conveyed that decision to him.
[6] Grobler thereafter applied successfully on review to the High Court
at Pretoria (R Claassen J) for an order which was granted in terms that
may be summarised as follows:
1.
The Adjudicator’s decision was set aside.
2.
Munpen’s trustees’ decision to amend the rules was set aside.
3.
The Registrar was ordered to cancel registration of the amended
rules.

4.
It was declared that Grobler had ‘an established right regarding the
acknowledgement of his years of pensionable service’ before
employment with the JMPF and that right was ‘unlawfully ...
reduced’. (the order repeated the notice of motion in the quoted
respects.)
5.
He was entitled to compensation for the full period of his
‘pensionable service’ within the meaning of the rules prior to
amendment.
6.
The JMPF was ordered to pay him R1 596 681 with interest.
7.
Munpen was ordered to pay him certain interest.
8.
The JMPF and Munpen were ordered to pay the costs.
[7] Leave to appeal to this Court was granted by the Court below to the
JMPF, Munpen and the Registrar. The grounds on which leave was
granted were confined to those raised by the JMPF and Munpen.
[8] Of the grounds advanced in the heads of argument for the JMPF
and Munpen their senior counsel (who was not involved in drawing the
heads) limited his submissions to the following.  The first was to the
effect that the amendment did not violate rule 49 because Grobler had, by
the time of the amendment, not yet acquired an established benefit.
Secondly, it was contended that the application before the High Court
was a review of the Adjudicator and as the Adjudicator had no power in
law to decide upon the validity of rule amendments, and therefore had no

jurisdiction in that regard, the court equally had no jurisdiction. Thirdly,
in the course of presenting the second submission counsel remarked that
in so far as the application was a review of the JMPF and Munpen it had
to have been brought under the Promotion of Administrative Justice Act 3
of 2000 (PAJA) and was outside the time limit laid down in that statute.
[9] The argument that Grobler had no ‘established benefit’ was based
essentially on those well known authorities and writings which deal with
vested rights as opposed to conditional rights. (It was not suggested that if
he had an established benefit it did not have a value nor that the
amendment had not decreased its value.)
[10] In the commonly encountered language of insurance contracts and
pension or provident funds a benefit, generally speaking, can mean the
actual financial payment which the insured or fund member will
eventually receive on the occurrence of the future event in respect of
which the benefit is payable. And accepting that it is only then that the
beneficiary becomes entitled to payment, it is only then that a right to the
payment can come into being. However, rule 49 does not speak of a right
but a benefit. Moreover, a right, whether vested or conditional, implies an
otherwise specific and unqualified entitlement. Conceptually a right does
not permit of reduction. If one has a right to payment of a specific amount
then it is a right to no more and no less. Again speaking generally, a right
is in this context subject only to its being conditional or having vested.

Accordingly, the principles of vesting of rights do not in my view provide
the answer. I say so for the following reasons.
[11] As I have indicated, what the rules of the fund provide for are
called ‘benefits’. They become payable on the occurrence of specific
events – retirement or death or physical incapacitation or retrenchment. In
each case the benefit that becomes payable is calculated according to a
formula. (I deal later with the formula for the calculation of the
retrenchment benefit.) It suffices to say that in each case a benefit
continually increases the longer the member remains a member of the
fund. In some cases the benefit also increases in steps from time to time
as the member ages or the member’s period of pensionable service
increases (as in the case of the retrenchment benefit).
[12] Naturally there can be no certainty which of those events – if any at
all – will occur while the member belongs to the fund. The member might
even resign before any of them occur. But in planning for the eventuality
of retirement or death or medical disability or retrenchment a member
will, when planning, naturally take account of the value of the benefits
that by that time have accumulated and be payable should one of the
events occur immediately. The important point is that a benefit is
calculable not only when it becomes claimable on occurrence of the
relevant event. Its accumulated value at an earlier time is also calculable.

[13] Accordingly the reference in rule 49 to ‘established benefit’ is, in
my opinion, a reference to the benefit that has accumulated at the time the
amendment is made. It is not a reference to the right to claim a benefit
that has finally matured. As indicated, that right might never arise. An
interpretation of rule 49 according to which the trustees, on the eve of an
event that would entitle a member to claim the benefits that have
accumulated during his or her membership of the fund, are empowered to
amend the rules so as to remove or reduce such benefits, is one which
would permit an intolerable injustice. One can only conclude that the
framers of the rule could never have intended it to have that meaning.
What the rule means, I consider, is that the trustees may amend the rules
in such a way that further benefits will not accumulate from the time the
amendment is made (which will enable the member to make other
arrangements to replace them) but that the member may not be deprived
of benefits that have accumulated by the time the amendment is made. To
find for the appellants in this regard would sanction an interpretation that
would be in direct conflict with the purpose of a pension fund, which is,
after all, to enable members to plan for the occurrence of the various
events for which benefits are provided.
[14] Grobler was employed by several municipalities. He entered
municipal service in 1974 and left it when he became employed by the
JMPF on 1 October 1996 as its Financial Manager.

[15] In his time as a municipal employee he was a member of the JMPF.
In 1993 the Commissioner ruled that because the JMPF was not a local
authority its employees could not enjoy the tax benefits then available to
members of municipal retirement funds. They therefore had to give up
membership of the JMPF. The ruling, which gave rise to the
establishment of Munpen, was later withdrawn subject to conditions. The
upshot was that employee-members of the JMPF were permitted to
switch membership to other funds and so retain what had been their tax
benefits. One of the other funds was the Municipal Gratuity Fund (MGF).
A window period was provided by the Commissioner for the switch.
Although not yet an employee of the JMPF, Grobler took advantage of
the opportunity to switch funds and retain the tax benefits. He became a
member of the MGF. In terms of the respective rules of the JMPF and the
MGF he had a transfer value in the JMPF which took into account his
municipal pensionable service up to that time. Then, when he left
municipal service he became entitled under the rules of the MGF to a
withdrawal benefit equal to his funds credit in the MGF. On entering the
employ of the JMPF he was obliged to become a member of Munpen but
because Munpen benefits were taxable he did not transfer his MGF
withdrawal benefit to Munpen but invested it privately.
[16] It was on the basis that Grobler had already received the benefits
referred to in the preceding paragraph in respect of his years of municipal

service that the appellants sought to say in the papers that the rule as
unamended served to advantage him unduly, which advantage was an
unintended consequence. That attitude serves to strengthen the impression
one gains from the record that the rule amendment was aimed specifically
at Grobler. Be those considerations as they may, they do not conduce to
solve the issues raised by the appeal. Any unintended consequence might
be capable of correction in an appropriate way but not by an amendment
in conflict with rule 49.
[17] Rule 36 of Munpen’s rules is headed “DISCHARGE OWING TO
RE-ORGANISATION’ and provides for two categories of retrenchment
benefit. One is for a member with at least 10 years’ pensionable service
and the other for a member with less than 10 years.  For each category a
detailed formula is provided by which to calculate the amount that will
eventually be payable on maturation of the right to the benefit. But it is
also possible to calculate the current value of the benefit at any prior
stage, for example, on the supposition that retrenchment were to follow
calculation virtually immediately. In either category the member will be
entitled to his or her member’s share of the pension fund plus two
specified amounts payable by the employer. In the case of a member with
10 or more years’ pensionable service one of those amounts is equal to
three months’ pensionable emoluments. The other amount is the product

of multiplying a x b x c where a is the member’s average annual
pensionable emoluments over the last three years of pensionable service,
b is the member’s pensionable service plus additional service (the latter is
defined and need not be considered for present purposes), and
c is a specified factor allocated to the member’s age (there is a factor for
every age from 20 to 64).
[18] In the case of a member with less than 10 years’ pensionable
service there will be payable by the employer, firstly, an amount equal to
(a x b)-c where
a is 20 percent of the member’s annual pensionable emolument over the
last three years’ of pensionable service, (or the full period if less than
three),
b equals the pensionable service, and
c equals the member’s share.
Secondly, the employer will pay six months’ pensionable emoluments.
(There is a qualification in this latter regard which need not be
considered.)
[19] What the disputed amendment did, as I have indicated, was to limit
Grobler’s pensionable service for purposes of rule 36 to the period from 1
October 1996 until his retrenchment took effect, which was on 1 June
2003. Before amendment his pensionable service included his years of
municipal service.

[20] Had this been a case where the benefit eventually payable in the
event of retrenchment were not calculable until occurrence of that event it
might not have been possible to calculate a present value. It would also
not have been possible to say that any benefit was ‘established’ prior to
such occurrence. However, that is clearly not the case here. As at the date
of the amendment one could calculate the amount which Grobler would
have been entitled to had he been retrenched on that date. The fact that he
was not retrenched till later does not mean that there was as yet no benefit
that was ‘established’. By simply applying the criteria applicable to the
first category of retrenchment benefits it was possible to determine that
whatever his eventual entitlement on retrenchment, he had at the least by
the date of amendment notched up enough years of service to establish, as
a minimum benefit value, the sum which those criteria yielded as on that
date.
[21] Of course, as I have said, he had to be retrenched to be entitled to
be paid a benefit and the right to claim it might, seen as at the date of the
amendment, never have accrued but that cannot save the amendment from
invalidity. What is determinative is whether the benefit had become
established, not whether the right to claim it had accrued. The question is:
‘Did the amendment decrease the value of an established retrenchment
benefit?’ and to answer that question one has to assume that retrenchment
would have ensued. Were it otherwise the fund’s trustees could, on the

eve of retirement or retrenchment, withdraw accumulated benefits and
simply shrug their shoulders the following day. The unfairness would be
manifest.
[22] I conclude, therefore, that the amendment was in conflict with rule
49 and consequently invalid.
[23] Turning to the submission that the court had no jurisdiction
because the Adjudicator had no power to rule on the validity of the
amendment, his powers and functions are limited to what is provided for
in the Act. His main object is to dispose of complaints in a procedurally
fair, economical and expeditious manner.1 A complaint is defined.2
The definition reads:

‘complaint’ means a complaint of a complainant relating to the administration of a
fund, the investment of its funds or the interpretation and application of its rules, and
alleging –
(a)
that a decision of the fund or any person purportedly taken in terms of the
rules was in excess of the powers of that fund or person, or an improper exercise of its
powers;
(b)
that the complainant has sustained or may sustain prejudice in consequence of
the maladministration of the fund by the fund or any person, whether by act or
omission;
(c)
that a dispute of fact or law has arisen in relation to a fund between the fund or
any person and the complainant; or
(d)
that an employer who participates in a fund has not fulfilled its duties in terms
of the rules of the fund, ...’

1  Section 30D.
2  Section 1.

[24] In Meyer v Iscor Pension Fund 3 this court considered a
complainant’s grievance professedly based on maladministration under
para (b) of the definition. The complaint was that the fund’s rules were
amended in breach of its fiduciary duty to members by discriminating
against them and by frustrating certain alleged legitimate expectations.
The fund’s answer was that this was not a complaint as defined because it
did not amount to maladministration. Maladministration, it was argued,
had to be confined to the administration of the fund contrary to its rules
and did not include rule amendments. The judgment reads4

‘Though I am inclined to agree with the meaning of the term “maladministration”
contended for by the fund, I find it unnecessary to come to any final conclusion on
this issue since Meyer’s objection falls within the ambit of para (a) of the definition of
a “complaint”. Paragraph (a) of the definition contemplates an objection ‘that a
decision of the fund ... purportedly taken in terms of the rules [of the fund] ... was an
improper exercise of [the fund’s] powers”. That would, in my view, include Meyer’s
objection that the way in which rule 6.2 was amended amounted to an improper
exercise of the fund’s powers under rule 12.8.’

[25] With respect, although a decision to amend a fund’s rules would
indeed be a decision ‘in terms of the rules’ if its rules did empower
amendments, the question whether a complainant’s case is a complaint as
defined is not limited to determining whether it fits any of the instances in
paragraphs (a) to (d). To be a complaint as defined it has also to conform

3  2003 (2) SA 715 (SCA).
4  Para [23] at 730H-J.

to what is stated in the preamble to the definition. It must, in other words,
while alleging one or more matters described in paragraphs (a) to (d),
nevertheless also concern one of the three subjects stated in the preamble:
(i) administration of the fund, (ii) investment of its funds, or (iii)
interpretation and application of its rules.5 None of those three subjects
entails the making or validity of rule amendments. It follows that the
Adjudicator had no power to consider Grobler’s complaint in so far as it
involved the amendment or its validity. In taking the view that the
Adjudicator had that power the Court below, with respect, erred.
[26] Another regard in which the learned Judge erred, in my opinion,
was in connection with the Adjudicator’s position vis à vis the Registrar.
There could be no problem, once the court held the amendment invalid, in
ordering the Registrar to cancel registration of the amended rule, as was
ordered. However, in arriving at the conclusion that that was what had to
be done the Court referred to the Adjudicatior’s power under s 30E(1)(a)
of the Act to ‘make the order which any court of law may make’ and
proceeded to say that ‘the Adjudicator was at liberty and should have
instructed the registrar to cancel such registration’.
[27] Plainly the Adjudicator can only ‘make the order which any court
of law may make’ in respect of a matter within his competence. As I have
said, a rule amendment and its validity are beyond that competence. So,

5  Shell and BP SA Petroleum Refineries v Murphy NO  2001 (3) SA 683(D) at 690D-E

without any doubt, is an instruction by the Adjudicator to the Registrar to
cancel a rule registration. Not surprisingly, the Registrar appeared by
counsel before us to contest the view adopted by the learned Judge.
Nevertheless what the registrar’s counsel did not object to was the
cancellation order granted by the Court below on the basis that the
amendment was invalid.
[28] The Adjudicator’s lack of jurisdiction to consider the rule
amendment would have been fatal to the High Court application had the
latter been confined to reviewing the Adjudicator or had the other relief
claimed been only in the alternative to reviewing the Adjudicator. The
application was not so confined and the relief sought against the other
parties cited was not claimed in the alternative. There are, it is true,
passages in the founding affidavit consistent with the relief against the
other parties having been sought on the footing that the decision of the
Adjudicator was to be set aside. As against those, there are annexures,
including letters from Grobler’s attorney to JMPF and Munpen, squarely
raising the matter of the invalid amendment and its effect on his
established retrenchment benefit. Even when addressing the Adjudicator
the attorney made it clear that if the Adjudicator lacked jurisdiction an
application would be made to the High Court for appropriate relief. There
is also a paragraph in the founding affidavit stating that the purpose of the
application was, inter alia, ‘to grant the relief in the Notice of Motion’.

Finally, one finds in the notice of motion an unqualified prayer for an
order reviewing and setting aside the decision of Munpen’s trustees
relative to the disputed amendment. In the circumstances I consider that
the application to the court below was sufficiently framed to include
review relief such as is within the ambit of PAJA even though PAJA is
not referred to.
[29] I have mentioned that counsel for the appellants remarked that a
review application under PAJA was out of time. In this respect there are
detailed submissions in the appellants’ heads but they were not urged
before us in argument. The Munpen decision sought to be reviewed was
dated 13 February 2002. Quite patently Grobler and his attorney thought
that a complaint to the Adjudicator had to be exhausted before all else,
provided he had jurisdiction. In that regard matters dragged unduly, not
least because the office of Adjudicator was not filled for some while.
Initially they were advised that he did have jurisdiction and they awaited
his decision. When the new Adjudicator took office his final response,
dated 19 November 2004, was that he had no jurisdiction. This was
received by Grobler’s attorney on 2 December 2004. The application to
the court below was launched in January 2005.
[30] PAJA requires a judicial  review to be brought without
unreasonable delay and in any case within 180 days after, inter alia,
exhaustion of internal remedies. Despite the absence in law of the

supposed internal remedy of recourse to the Adjudicator it seems to me
that the interests of justice warranted the Court below’s decision to
entertain the application. (See s 9 of PAJA.)
[31] It follows that Grobler was entitled to an order setting aside the
invalid amendment, as was indeed granted. Because the declaratory relief
took the matter no further it should not have been granted. And the
monetary relief was not appropriate to be dealt with on the affidavits
filed, nor was it appropriate relief to grant on review. The order of the
court below therefore requires amendment and the parties must be left to
deal as they are advised with the issues which flow from the setting aside
of the rule amendment. Finally, there was no justification for ordering, as
part of the costs order, that the appellants pay the costs of proceedings
before the Adjudicator. There was no attack on this aspect by them but
they should not be penalised for Grobler’s misdirected efforts to secure
relief before the Adjudicator. (Because the order of the court below, as
issued, also contains clerical errors it will be re-drawn.)
[32] Given the outcome of the appeal, the order against the Registrar
must stand. Grobler rightly sought no costs order against him.
[33] Despite the need to amend the order of the Court below the
appellants’ essential object was to argue for the amendment’s validity and
as they have failed they must bear the costs of appeal.

[34] It remains to mention that the Registrar was out of time in filing his
notice of appeal and his heads of argument. He was required to ask for
condonation, the grant of which is appropriate in the circumstances. He
must bear the costs, including the costs of Grobler’s opposition.
[35] The following order is made:
A.
The order of the court below is amended to read as follows
‘1.
An order is granted reviewing and setting aside:
1.
The decision of the trustees of the third respondent as
requested by the second respondent and taken on 13
February 2002. “... dat slegs pensioengewende diens by die
laaste werkgewer in ag geneem word vir doeleindes van
herorganisasie.”
2.
The decision of the trustees of the third respondent of
13 February 2002 to amend the definition of pensionable
service (“pensioengewende diens”) in the rules of the third
respondent, as requested by the second respondent, to the
effect that only pensionable service of the member of the
third respondent with his last employer be regarded as
pensionable service at the date of termination of the
member’s service with his employer for purposes of Rule 36
of the rules of the third respondent (dismissal because of

reorganisation), unless the employer and the member agrees
otherwise.’
2.
The sixth respondent is ordered to cancel the registration of
the amended rules of the third respondent registered by him on 6
May 2002.
3.
The second and third respondents are ordered to pay the
costs of this application jointly and severally the one paying the
other to be absolved.’
B.
Subject to the order in A, the appeal is dismissed with costs.
C.
The third respondent is granted condonation but ordered to pay the
costs of the application for condonation as also the first respondent’s
costs of opposition.
_____________________
CT HOWIE
PRESIDENT
SUPREME COURT OF APPEAL

CONCUR:

NUGENT JA
PONNAN JA
MUSI AJA

HEHER JA:
[36] I have read the judgment of Howie P. I respectfully disagree with
his conclusion that Mr Grobler possessed an ‘established benefit’ the
value of which was decreased by the amendment to the rules. My reasons
can be succinctly stated.
[37] To understand the use of the word ‘established’ in relation to a
benefit it is necessary to examine the rule which brings the benefit into
operation. Thereby one will determine when and under what
circumstances a potential benefit reaches that degree of certainty, security
and permanence which is inherent in the meaning of the word.6
[38] The benefit of which Grobler was said to have been deprived was
the benefit of a pension on retrenchment following on a re-organisation
by his employer. The earliest date at which a member can qualify for a
benefit under the re-organisation rule must set the outer limit of when
such a benefit can properly be described as ‘established’. The relevant
pension fund rule (rule 36(1)) provides as follows (omitting matters
irrelevant to this judgment):
’36.
DISCHARGE OWING TO RE-ORGANISATION
(1)
If a MEMBER’S service is terminated owing to a reduction in, or re-
organisation of staff, or to the abolition of his post, or in order to effect

6 The Shorter OED sub nom ‘establish’: 1. To render stable or firm; 2. To fix, settle, institute or ordain
permanently; 3. To set up on a secure basis; To set up or bring about permanently; 6. To place beyond
dispute; to prove.

improvements in efficiency or organization, or owing to retrenchments in
general, he shall be entitled to his MEMBER’S SHARE on the date of his
leaving service, plus the following amount payable by the EMPLOYER
concerned:

(a)
in the case of a MEMBER who has at least ten years’ PENSIONABLE
SERVICE,

(i)
an amount equal to . . .’
Subrule (b) goes on to provide in equivalent fashion for a member who
has less than ten years’ pensionable service.
[39] The rule makes it clear that in order for a potential beneficiary to
qualify for a benefit on re-organization three factual requirements must be
satisfied (once again I limit the analysis to what is relevant to Grobler’s
case):
(1)
membership of the fund at the time of the termination of service;
(2)
retrenchment in consequence of a re-organisation;
(3)
the requisite minimum years of pensionable service.
[40] The third factual element does not on its own qualify a beneficiary
for the benefits of the rule. Unless and until the other two elements are
present it is impossible to know which, if any, members will be adversely
affected and who consequently surmounts the jurisdictional requirements
of the rule. No matter how probable any of the three requirements may
appear in advance it cannot be assumed in advance that any will be
satisfied: the potential beneficiary may die or leave the service of his

employer for many other reasons before that happens, or the rule may no
longer set the same qualifying criteria as a result of further amendments
in the interim.
[41] In Grobler’s case the amendment to the rule was passed long
before the re-organisation took place which resulted in his retrenchment.
At that time he did not qualify for the benefits of rule 36(1) and no-one
could say that the likelihood of his doing so was anything more than an
uncertain future event. The corollary was, of course, that he could not
validly have objected to the amendment because he could not at that time
have proved that he was a qualified member.
[42] The matter may also be approached from a different angle. The
amendment changed the qualifying conditions (relating to ‘pensionable
service’) for a benefit on re-organisation. But it did so before Grobler
himself qualified for such a benefit. At the time he had accrued no right to
have any future determination of his benefits on retrenchment decided
according to the rules before the amendment. In this regard his case is in
my view analogous to that of the attorney’s clerk who entered into
articles on a particular statutory basis but found that during his articles the
law was amended to change the qualifications for admission: Browne v
Inc Law Society of Natal 1968 (3) SA 535 (N) at 539H-540H. See also
Chairman, Board on Tariffs & Trade v Volkswagen of SA (Pty) Ltd 2001
(2) SA 372 (SCA) per Nienaber JA at 380D-F and per Harms JA at 387F-

I. It is only in this sense that I think that vested rights have anything to
contribute to the decision of this case.
[43] For these reasons I find that the amendment did not reduce the
value of any established benefit in favour of Grobler. The appeal should
accordingly be upheld and judgment of the court a quo set aside. As this
is a minority judgment it is unnecessary to be more specific in this regard.

___________________
J A   HEHER

JUDGE
OF
APPEAL

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

JOINT MUNICIPAL PENSION FUND AND ANTOHER v LJ
GROBLER AND OTHERS
FROM:

The Registrar, Supreme Court of Appeal
Date:

30 March 2007
Status:

Immediate
Little over a year before retrenchment of its Financial Manager, Mr LJ
Grobler, JMPF (Joint Municipal Pension Fund) asked Munpen
Retirement Fund, which all its employees belonged to, for an amendment
of Munpen’s rules. The request was implemented.  The rules provided for
a retrenchment benefit. They also barred an amendment reducing the
value of an ‘established benefit’. Crucial to the calculation of the value of
Grobler’s retrenchment benefit was the definition in the rules of
‘pensionable service’. Before amendment the definition would have
allowed inclusion of all Grobler’s 22 years in municipal service before he
joined JMPF.  The amendment’s effect was to limit his pensionable
service for the purposes of calculating his benefit to the just more than

6 years of his time with JMPF. As a result his retrenchment benefit was
vastly reduced.
Grobler successfully applied to the High Court at Pretoria for an order
setting aside the rule amendment as invalid because it reduced the
established accumulated value of his benefit. JMPF and Munpen appealed
to the SCA, arguing that Grobler had no established benefit when the
rules were amended.
The SCA confirmed that the amendment was invalid. It held that although
at the time of the amendment Grobler did not yet have the right to claim
the benefit, the rules did not speak of reducing an established right but an
established benefit.
According to the calculation formula contained in the rules he clearly had
an accumulated and calculable benefit when the amendment was made.
That benefit was invalidly reduced. Its effect was felt when he was
retrenched. The SCA emphasised that when pension fund members plan
their financial futures they take account of the benefits that have
accumulated up to the time they do their planning. If the rules had to be
interpreted so that on the eve of retirement accumulated benefits could be
removed or reduced the result would be an intolerable injustice.