THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 886/2019
In the matter between:

THE PUBLIC SERVANTS ASSOCIATION OF SOUTH AFRICA       FIRST APPELLANT

JAMES KILGOUR VAN WYK                                                         SECOND APPELLANT

BENSON BOY ISHMAEL OLIFANT                                                     THIRD APPELLANT

and

GOVERNMENT EMPLOYEES PENSION FUND                          FIRST RESPONDENT

MINISTER OF FINANCE                                                                SECOND RESPONDENT

MINISTER OF PUBLIC SERVICE AND ADMINISTRATION          THIRD RESPONDENT

SEVENTEEN TRADE UNIONS                             FOURTH – TWENTIETH RESPONDENT

PUBLIC SERVICE BARGAINING COUNCIL                      TWENTY FIRST RESPONDENT

Neutral citation: Public Servants Association of South Africa and Others v Government
Employees Pension Fund and Others (Case no 886/2019) [2020] ZASCA
126 (9 October 2020)

Coram:
NAVSA, SALDULKER, SCHIPPERS and DLODLO JJA and GOOSEN AJA

Heard:
7 September 2020

Delivered:
This judgment was handed down electronically by circulation to the parties'
representatives via email, publication on the Supreme Court of Appeal
website and release to SAFLII. The date and time for hand-down is deemed
to be 10h00 on 9 October 2020.

Summary: Pension Fund – Government Employees Pension Fund Rules require
consultation with employee organisations before a decision is made regarding actuarial
interest – discussion of what is meant by consultation – Rule must be complied with –
principle of legality – cannot be remedied by consultation with non-designated functionary
after implementation of decision – decision liable to be set aside.
______________________________________________________________________

ORDER
______________________________________________________________________

On appeal from: Gauteng Division of the High Court, Pretoria (Van der Westhuizen J,
sitting as court of first instance): judgment reported sub nom Public Servants Association
of South Africa and Others v Government Employees Pension Fund and Others [2019]
ZAGPPHC 199

The appeal is upheld with costs, including the costs of two counsel.
The order of the court below is set aside and substituted as follows:
‘(a)
The delay in bringing the application for review is excused;
(b)
The decision of the first respondent to amend, with effect from 1 April 2015,
the F(Z) and A(X) factors utilised in the calculation of actuarial interest under

Rule 14.4.2 of the Rules of the Government Employees Pension Fund is
reviewed and set aside;
(c)
The first respondent is ordered to consult with the first applicant, the second
respondent, the fourth to nineteenth respondents and all other employee
organisations as defined in the Rules of the Government Employees
Pension Fund concerning the calculation of the actuarial interest referred to
in (b) above, in respect of those affected thereby;
(d)
The first respondent is to pay the costs of the application, including the costs
of two counsel where so employed.’
_____________________________________________________________________

JUDGMENT
______________________________________________________________________
Navsa JA (Saldulker, Schippers and Dlodlo JJA and Goosen AJA concurring):

[1] This appeal concerns, principally, the propriety of a decision of the first respondent,
the Government Employees Pension Fund (the GEPF), taken on 3 December 2014, in
relation to the calculation of the actuarial interest of members whose membership
terminated after 1 April 2015.  As the name suggests, the GEPF was established to
administer and manage pension fund matters and schemes relating to government
employees.  The first appellant, the Public Servants Association (the PSA), a trade union
registered in terms of the Labour Relations Act 66 of 1995 (the LRA), and the second and
third appellants, Mr James Van Wyk and Mr Benson Boy Olifant (both former members
of the PSA), respectively, had sought, in the Gauteng Division of the High Court, Pretoria
(Van der Westhuizen J), to have the aforesaid decision by the GEPF reviewed and set
aside. The high court dismissed the application with costs, including the costs of two

counsel. It is against that order that the present appeal, with the leave of the court below,
is directed. The detailed background is set out hereafter.

[2] The PSA represents over 237 000 members employed in the public service, in
both the national and provincial spheres of government. The GEPF is a pension fund
contemplated in section 2 of the Government Employee Pension Law, 1996 (the GEP
law).1 It operates under the GEP law and the rules of the GEPF.2 The applicant and the
fourth to twentieth respondents are all trade unions and parties to the twenty first
respondent, the Public Service Co-ordinating Bargaining Council (the PSCBC),
established and registered in terms of s 36(1), read with Schedule 1, of the LRA. The
aforesaid respondents are also ‘employee organisations’ contemplated in the GEPF
rules.

[3] The application launched in the high court by the appellants was served on current
members of the GEPF and on members who, as at 1 April 2015, were members but
whose membership had been terminated subsequently, in terms of the GEPF’s rules. The
application was also served on beneficiaries of former members who had become entitled
to benefits after 1 April 2015 as well as on former spouses of members, for whom a
divorce debt was recorded.

1 The GEP law is a legislative instrument published under Proc 21 in GG 17135 of 19-04-1996 and came
into effect on 12 May 1996. The GEP law was authorised by section 237 of the interim Constitution of
South Africa, Act 200 of 1993, that provided for the rationalisation of public administration. It brought into
the fold of the GEPF former members of the liberation struggle and public service pension funds in former
Transkei, Bophuthatswana, Venda and Ciskei (the so-called ‘TBVC states’)
2 The Rules of the GEPF are published in Schedule 1 of the GEP law.

[4] Actuarial interest lies at the heart of this appeal. It is thus necessary to deal with
that concept at the outset. Actuarial interest is, simply, a member’s accrued benefit
payable to the member by the GEPF, as determined by the rules. More precisely, it is
described in the definitions section of the rules as follows:
‘[A]n amount representing the value of a member’s benefits in the Fund based on his or her
pensionable service, calculated in terms of rule 14.4.2...’

[5] Rule 14.4.2, in turn, reads as follows:
‘The actuarial interest of a member who has—
(a) not attained the age of 55 years, shall be calculated in accordance with the following formula:
Provided that the actuarial interest shall not be less than the amount of the benefit described in
rule 14.4.1(a):
N(adj) x FS x F(Z) x [1 + (0.04 x (60 – Z))]
Where—
N(adj) is the member’s period of pensionable service, taking into account all adjustments
thereto in terms of the rules, as at the date of termination of service;
FS is the member’s final salary;
F(Z) is a factor determined by the Board acting on the advice of the actuary, and after
consultation with the Minister [of Finance] and the employee organisations;
Z is the age of at which the member attains his or her pension-retirement date;
(b) attained the age of 55 years, shall be calculated in accordance with the following formula:
Provided that the actuarial interest shall not be less than the amount of the benefit described in
rule 14.4.1 (a):
G + [A x A(X)]
Where—

G is the amount of the gratuity the member would have received in terms of the rules had
he retired on that date. For this purpose, a member with less than 10 years pensionable
service, will be deemed to qualify for the same benefit as a member with 10 years or more
service;
A is the amount of the annuity the member would have received in terms of the rules. For
this purpose, a member with less than 10 years pensionable service, will be deemed to
qualify for the same benefit as a member with 10 years or more service;
A(X) is a factor determined by the Board acting on the advice of the actuary, and after
consultation with the Minister and the employee organisations.’ (Emphasis added)

[6] The appellants contended, in the court below and before us, that the GEPF had
unlawfully taken its decision on 3 December 2014 to amend, with effect from 1 April 2015,
the F(Z) and A(X) factors in the formula contained in the rule set out in the preceding
paragraph, relying only on an actuarial valuation report, that is, without prior consultation
with the PSA or any of the employee organisations prescribed by the rules. In short, the
appellants contended that the GEPF, in acting as it did, offended against the principle of
legality.

[7] In seeking relief in the court below the appellants stressed the importance of
consultation. They emphasised the fiduciary duty of the GEPF’s Board of Trustees to act
in the best interests of GEPF members and beneficiaries. They pointed to the fact that
the GEPF is funded by contributions from government and persons employed in the public
service. Insofar as the board’s power to amend the actuarial factors is concerned, the
appellants took the view that the GEPF was fulfilling a ‘legislative’ duty to make rules but

that this role made it necessary, in terms of the rules and the contextual setting, to engage
in processes that acknowledge collective bargaining.

[8] The appellants also placed reliance on s 29 of the GEP law, the relevant parts of
which provide as follows:
‘(2) The rules referred to in subsection (1), may—
…
(b) from time to time prescribe the conditions subject to which and the rate at which members
shall contribute to the [GEPF] and the times at which and the manner in which such contributions
or any amounts which are payable to the Fund in terms of this Law, shall be deducted from the
pensionable emoluments of members and paid over to the Fund;
…
(g) from time to time prescribe the benefits or other amounts payable from the [GEPF] to
members, their former spouses or their beneficiaries determined in the rules in cases or classes
or categories of cases specified by the rules, and the manner in which such benefits or other
amounts shall be calculated and the times at which and the manner in which such benefits or
other amounts shall be paid;  [and]
…
(k) that any change to the rules shall satisfy the condition that the real value of the accrued
benefits of every member of the [GEPF], as represented by the [GEPF’s] actuarial liability towards
the member and his or her beneficiaries, shall be maintained in such change, and provide for the
manner in which such value is to be determined.’

[9] According to the appellants, both the GEP Law and the rules place a premium on
the relationship between the State, as employer, and its employees as members of the

GEPF. Both the GEP law and the rules make various references to instances where
negotiations or consultations are required, with the responsible Minister and the labour
representative in the PSCBC or employee organisations. This is an aspect dealt with in
some detail later in this judgment. The appellants were adamant that the need for
consultation, negotiation and consensus, central to the employment relationship founded
in the LRA, is a constant theme in the GEP law and the rules.

[10] The rules set out the circumstances in which benefits become payable to members
who leave the service of the State. A range of benefits, such as lump sum payments,
gratuities and annuities, are payable under certain circumstances, including discharge
from service, retirement or end of contract. Benefits will differ, depending on a member’s
length of service, or whether they have reached pensionable age.

[11]  Rule 14.4 determines the benefits payable. The appellants submitted that the
amendment of the actuarial interest factors in the formula in that sub-rule, giving rise to
the application brought in the court below, is vital to the benefits to be paid to a member
who resigns, dies, divorces, or is discharged either for misconduct, or on account of
ill-health, or for a reason not specifically mentioned in the rules and who is not entitled to
benefits provided elsewhere in the rules. The pensionable amounts of members in these
categories depend directly on the application of the F(Z) and A(X) factors. Any
amendment to the F(Z) or A(X) factors directly impacts upon the ultimate pension
received by members. It was submitted on behalf of the appellants that this was the
rationale behind the rules requiring consultation prior to an amendment of those factors.
A decision to amend could only be determined by the GEPF Board, so the argument was

made, by acting on the advice of an actuary after consultation with the Minister and
employee organisations.

[12] ‘Employee organisation’, according to the rules of the GEPF, includes:
‘1.6.1 an admitted employee organisation referred to in s 1 of the Public Service Labour
Relations Act, 1994;
1.6.2 an admitted employee organisation referred to in s 1 of the Education Labour Relations
Act 146 of 1993;
1.6.3 an employee organisation or other employee structure formed by personnel appointed in
terms of the Intelligence Services Act 38 of 1994, the Defence Act 44 of 1957 and the
South African Police Service Act 68 of 1995 (Act 68 of 1995) and which has for negotiation
purposes been accepted by the employer.’

[13] In the envisaged consultation process, according to the appellants, the relevant
parties will be provided with all the relevant information to enable meaningful
engagement. The GEPF was accused of not having done any of this prior to the impugned
decision being taken.

[14] The appellants insisted that there had been no prior consultation, as contemplated
in the rule, with either the PSA or any of the other employee organisations. The GEPF
decision took effect on 1 April 2015. The first time that the PSA or the other two appellants
became aware of the decision was during July 2015. The PSA became aware of the
decision when it started receiving queries from its branches who, in turn, had been
receiving enquiries from members.

[15] After an article concerning the amendment was published in a Sunday newspaper
with national circulation, some PSA members, including the second appellant,
approached the PSA and complained about the absence of any response to their
enquiries from the GEPF concerning the amendment. The second appellant, with
reference to his latest pension benefit statement, wanted to know why the benefit initially
indicated by the GEPF had been substantially reduced. This is how the statements and
reduced benefit, on which the query was based, was described by the PSA:
‘This statement [as at 31 March 2015] reflects a resignation benefit of R2 547 716.00. In contrast,
Mr van Wyk’s 31 May 2015 benefit statement … reflects a resignation benefit of R2 399 206.00.
This is a reduction of R148 510.00 or 5.8%.’

[16] On 4 June 2015 Mr Abel Sithole, the then Acting Principal Executive Officer of the
GEPF, wrote a letter to Mr Frikkie de Bruyn, General Secretary to the PSCBC, proposing
that pension-related matters, including consultation on the actuarial interest factors and
queries surrounding reduced actuarial interest, be placed on the agenda of the PSCBS’s
next meeting. The following parts of the letter are instructive. First, Mr de Bruyn referred
to sections of the GEP law and a number of rules, including rule 14.4.2, which require
consultation and interaction by the Board with, amongst others, employee organisations
and the Minister. The introductory sentence to the paragraph containing the references
is revealing. It reads as follows:
‘The GEP Law and the GEPF Rules make various references to instances where negotiations or
consultation is required with the Minister of Finance and/or labour representatives in the PSCBC
or employee organisations, representing the Public Service, prior to any changes being made to,
amongst others, the benefit structures of the Fund…’ (Emphasis added).

[17] As revealing, is another part of that letter, which reads as follows:
‘[I]t seems appropriate for the Fund to establish a direct and ongoing relationship with the
PSCBC…’
A stated motivation, amongst others, was ‘[t]o facilitate consultation or negotiations on
the instances mentioned above (particularly around benefit improvements) as
contemplated in the GEP Law and/or the GEPF Rules’. A little later in the letter, the Board
made the following statement:
‘Due to a lack of such a direct ongoing relationship, the GEPF has had some difficulty in complying
with the Rules around the consultation process with the PSCBC. This is in regard to the F(Z) and
A(X) factors (also referred to as actuarial interest factors)... The consultation process regarding
these factors has been a subject of material debate by the Board of Trustees of the GEPF in
recent times…’
Towards the end of the letter the following appears:
‘In keeping with the main purpose of this letter, the GEPF would like to strengthen its relationship
with the PSCBC so as to, amongst others, deal with this and any other matters and to facilitate
the consultation process contemplated in the GEP Law and the Rules … We propose that
pension-related matters be made a standing item in the PSCBC agenda wherein the GEPF will
present any matters at the next PSCBC meeting’.
This letter came to the PSA’s attention by virtue of its membership of the PSCBC.

[18] When it became clear to the PSA that the GEPF wanted to consult, after the
decision to amend had been made, the former wrote to the latter, requesting that the

decision be withdrawn pending a proper consultation process. This met with no success.
There was also no response from the Minister.

[19] What followed was some form of post hoc consultation by the GEPF, not directly
with employee organisations but rather through the medium of the PSCBC. A special
PSCBC Council meeting was scheduled and held on 23 September 2015. The union
representatives, after discussions about benefits in terms of the rules, stated that there
was no endorsement of the presentation by the GEPF and requested that the
amendments be put on hold so as to allow meaningful input from employees.

[20] On 1 October 2015 Mr Sithole, now as Principal Executive Officer of the GEPF,
received a letter from the GEPF’s actuary indicating that, due to administrative factors,
the actuarial interest factors come into effect on 1 April in the year following the statutory
valuation. In relation to the present case, that would mean it was put into effect on 1 April
2015. In short, this occurred before the envisaged consultation process.

[21] On 7 October 2015, the PSA’s attorneys wrote to the GEPF calling upon it to
reverse the decision to amend the actuarial factors and to re-instate the previously
applicable factors. The GEPF’s attorneys responded by stating that the decision of the
Board of Trustees stood, and that changes in the actuarial interest did not translate into
a change in the benefit structure.

[22] The PSCBC met again on 29 October 2015. By this time it had become clear that
the GEPF had already implemented the amendments. Employee representatives asked

that it be put on hold. A further meeting of the PSCBC took place on 11 December 2015.
After the amendment of the actuarial interest factors had been discussed, unfortunately
from the perspective of the PSA, the labour representative said the following:
‘[I]f they can then document that for us so that we are able to explain these issues well to the
affected members, then on that note chair we do accept the proposals or the amendments as
proposed by the GEPF.’

[23] The PSA insisted that the PSCBC process was not the proper one and that, in any
event, what is recorded in the previous paragraph did not absolve the GEPF from having
to comply with the rules and consult, not through the PSCBC but through the channel
prescribed by the rules, namely, with employee organisations. The labour representative
on the PSCBC could not bind the PSA. Not all of the employee organisations required to
be consulted, so the PSA contended, are represented on the PSCBC.

[24] On 5 January 2016, the GEPF’s attorneys wrote to the PSA stating that the GEPF’s
position on the amendment to the actuarial factors remained unchanged.

[25] The GEPF appears to have consulted with the Minister over an extended period,
commencing in January 2013, which makes it all the more peculiar that the same
emphasis was not placed on prior consultation with employee organisations, the PSA
contended.

[26] On 25 April 2016 the PSA demanded that the GEPF withdraw the amendment.
The GEPF’s stance was that the PSCBC process amounted to a form of condonation of

the amendment in question. Mr Sithole based this on the resolution passed at the PSCBC.
The PSA was adamant that there is no mention of consultation with the PSCBC in the
rules and that the PSCBC process was irrelevant. It also insisted that the PSA’s
representative at the meeting was not present at the material time. The aforesaid were
the bases for the review application in the court below.

[27] In opposing the application, the GEPF pointed out that as at 31 March 2014 the
GEPF had approximately 1 280 000 active members and approximately 367 000
pensioners. GEPF members are members of various trade unions, ‘most’ of which,
according to the GEPF, are recognised and admitted members of the PSCBC.

[28] The GEPF considered the role of the actuary in terms of the rules to be of cardinal
importance. Rule 4.8 obliges the Board to appoint an actuary to be the valuator of the
GEPF. In terms of rule 4.9 the valuation must be done at least every three years and the
actuary must provide a report to the board. In the present case the Board considered it
prudent to have a valuation done every two years. The GEPF noted the objectives of the
valuation as follows:
‘The objectives of the statutory valuation of the GEPF are therefore, among other things, to:
(a) investigate and report on the financial position of the GEPF on an ongoing basis by assessing
whether the GEPF’s funding level meets the minimum funding requirement and the requirements
of the GEPF’s funding policy;
(b) analyse the financial progress of the GEPF since the previous statutory valuation;
(c) analyse the sources of any surpluses or strains that have arisen in the inter-valuation period;
(d) determine the assumptions to be used in the current valuation;
(e) advise on the required changes, if any, to the actuarial factors; and

(f) determine the required employer contribution rate for the period to the next valuation in respect
of future service accrual and the expected strain or release to the GEPF if the employers
contribute at a different rate.’ (My emphasis.)

[29] According to the GEPF, the result of the actuary’s valuation is presented to the
Board’s Benefits and Administration Sub-Committee, which then considers and
interrogates it in detail. The subcommittee then makes a recommendation to the Board
on whether it should be accepted and approved. The valuation of the GEPF in question
in this appeal was at 31 March 2014. The suggestion appears to be that the actuary’s
valuation trumps consultation with the employee organisations.

[30] The GEPF denied that the decision taken to amend the actuarial factors
constituted a decision reviewable under the Promotion of Administrative Justice Act 3 of
2000 (PAJA). The GEPF contended that the valuation conducted by the actuary showed
that the actuarial interest factors decreased, on average, as a result of a change in the
valuation basis which, in turn, came as a result of changes in demographic assumptions.
The F(Z) factors decreased by 7.5% when compared to the previous F(Z) factors. The
A(X) factors decreased on average by 3.5% when compared with the previous A(X)
factors. The decrease in the actuarial factors reduces the value of the benefits payable to
members to whom actuarial interest is due upon exit. All of this being taken into account,
it was submitted on behalf of the GEPF that it is not surprising that one does not find any
mention by the appellants that the actuarial factors recommended by the actuary were
not reasonable and not based on actuarially sound principles. Furthermore, so it was
submitted, the appellants have not shown that the recommended actuarial factors are not

in the best interests of the GEPF. It has been shown, so it was said, that the PSA, even
if they had been consulted before the decision to amend, would have asked the Board
not to approve the factors.

[31] I pause to set out the PSA’s response, in its replying affidavit, to those assertions
by the GEPF. In short, first, notwithstanding the Board’s scepticism about whether
employee organisations could make a meaningful contribution in relation to the actuarial
report, rule 14.4.2 required it to consult with them. Second, the employee organisations
could certainly question assumptions made by the actuaries and could question other
aspects of the report. Third, employee organisations might want to consult and take
advice from actuaries of their own. Fourth, employee organisations might have something
to say about the timing and manner of the implementation of the amendments. Fifth,
employee organisations, one would have to accept, would want to maximise benefits for
their members. Last, employee organisations might make suggestions about increased
contributions by government and engage in dialogue about it.

[32] Minutes of the Board meeting reflected that the Board resolved on 3 December
2014 that rule 14.4.2 should be amended to require it to notify the Minister and employer
organisations, rather than consult them. In terms of s 29 of the GEP Law, a rule which
reduces the benefit payable from the GEPF may not have retrospective effect. The rule
change and its validity, or subsequent implementation or otherwise, was not an issue in
this case. In respect of the decision to alter the actuarial interest factors, the Minister
notified the Board that he approved the decision. The GEPF dealt with the issue of prior
consultation with employee organisations as is set out hereafter.

[33] The GEPF referred, in the first instance, to the definition of ‘employee organisation’
in the rules of the GEPF. The GEPF contended that this meant the rules, properly
construed, contemplated consultation with employee organisations at a forum where
labour issues are ordinarily negotiated, namely the PSCBC. To require otherwise would
be to fragment the consultation process. Moreover, so it was asserted on behalf of the
GEPF, half of the Board members of the GEPF are appointed by members. Six of those
are nominated by employee organisations. In light of the above, it was submitted that
there can hardly be a complaint of a failure to consult employee organisations.

[34] The Board, after the implementation of the amendment, sought to engage the
PSCBC on the basis that it was prudent to do so. The GEPF noted that there had been
no objection to the PSCBC process by the PSA. Furthermore, a PSA representative was
present at the meeting on 11 December 2015, referred to earlier in this judgment.
Consequently, he was part of the decision taken. On 14 April 2016 the PSCBC wrote to
the GEPF, recording that there had been a full discussion of the amendment to the
actuarial factors and that agreement had been reached on the implementation of the
amendment.

[35] It was submitted on behalf of the GEPF that the expression ‘after consultation’ did
not mean that there had to be agreement between the person or entity being consulted
and the decision maker. It was also submitted that the law permits consultation after the
event, such as occurred in the present case.

[36] The GEPF denied that the decision in question was an ‘administrative action’ in
terms of the PAJA. It was contended that in making the decision the GEPF was not
exercising a public power or performing a public function. It was asserted on behalf of the
GEPF that the Board was doing no more than complying with its fiduciary duty to act in
the best interests of the GEPF, its members and beneficiaries, on the advice of the
actuary and within the requirements of the GEPF’s minimum funding levels. The GEPF
took the view that, in the event it was held that the decision constituted an administrative
action, there was in any event an unreasonable delay in bringing the application, which
should not be condoned, especially since there have been subsequent valuations of the
Fund.

[37] The GEPF noted that there was no countervailing valuation put up by the PSA to
contest the actuary’s valuation. It was submitted that there was case law in terms of which
it was held that a decision by a Board of Trustees was not administrative action, as
defined in case law. It was contended that to have the matter referred back for
consultation would be a waste of time as consultation had already occurred. That, then,
was the stance adopted by the GEPF. I now turn to the adjudication of the dispute by the
court below.

[38]  In interpreting and applying the rule, the court below said the following:
‘On a purposive reading of the afore quoted passage, there appears to be two requirements that
are to be considered when determining the respective factors, F(Z) and A(X). Those requirements
are: advice from the actuary and consultations with the Minister and employee organisations.

The first requirement is that of the advice of the actuary. The informed advice of the actuary is
paramount in determining the respective factors. That advice is provided on the strength of inter
alia important fiscal and other financial considerations that impact upon the determination of the
respective factors, to which the Board of GEPF [does] not have access to, [nor] the required
expertise to consider, analyse or make informed decisions thereon. The actuary referred to is that
of the Board of the GEPF.’3

[39] The court went on to say the following concerning consultation:
‘The second requirement is that of consultation. The Board is obliged to consult with the Minister
and the relevant employee organisations. This requirement appears from the language used in
rule 14, the syntax thereof and the grammatical rules to be applied. The requirement follows on
the use of a specific punctuation tool, ie a comma, which is immediately followed by the word
“and”. The so-called Oxford comma. The purpose of the Oxford comma is to introduce a second
category, in the present instance that of consultation.

In the context of the GEP Law, the Board of the GEPF has fiduciary duties in respect of its
members as well as towards the fiscus. The one is not more important than the other. Both are of
equal importance. A balance is to be struck.
It is submitted on behalf of the applicants that the requirement of consultation is to be complied
with prior to a determination of the relevant factors. It is further submitted on their behalf, that the
purpose of the prior consultation is to permit the consultees to obtain their own actuary to advise
on what the appropriate factors should be. That submission would entail that the Minister would
likewise be entitled to appoint his or her own actuary to advise on the appropriate factor.
In my view, the context of the GEP Law and the rules promulgated thereunder, do not lean to
such interpretation. As recorded above there is only one actuary involved, that of the GEPF.

3 Public Servants Association of South Africa and Others v Government Employers Pension Fund and
Others [2019] ZAGPPHC 199 paras 10-11. (Citations omitted.)

The purpose of the consultation required in the context of rule 14.4 is to inform the Minister and
the employee organisations of the advice of the actuary and of the effect of the proposed factors
and to discuss those issues, as those have financial implications not only for the employees, but
also for the fiscus.
It is of fundamental importance to note that the rule only requires consultation, and not the
reaching of an agreement. The phrase used is “after consultation”. That phrase has been
considered by the courts on numerous occasions. It means nothing more than discussion and not
to arrive at an agreement. The importance of this difference is manifest.
In my view, it does not matter whether the consultation took place prior to or after the taking of
the decision. The requirement only requires consultation and in terms of the dictum in Premier,
Western Cape v President of the Republic of South Africa4 … the Board of GEPF is not obliged
to accept any input from the employee organisations.
Compliance with the first requirement is common cause. The dispute is in respect of the second
requirement. In this regard, there is ample proof that the Minister was consulted on the issue as
required. The Minister in fact acquiesced in that regard in the form of a letter dated 28 January
2015.’5

[40]  In relation to the time and manner of the consultation that took place, the court
below stated:
‘It is common cause that the members have direct representation on the Board of GEPF. That
much is clear from the composition of the Board of GEPF as recorded above. It is also common
cause that the first applicant is represented on the Board of GEPF.
It is further apparent from the answering affidavit of the GEPF, that a letter was addressed to the
PSCBC during June 2015 from which it is clear that the GEPF was alive to the consultation

4 Premier, Western Cape v President of the Republic of South Africa 1999 (3) SA 657 (CC).
5 Public Servants Association (above fn 3) paras 12-19. (Citations omitted.)

process and that the issue of the relevant factors advised on by the actuary would be discussed
at the next PSCBC meeting. That meeting was held on 11 December 2015.
The GEPF submitted that at the meeting of 11 December 2015, the PSCBC agreed to the
implementation of the relevant factors provided by the actuary.
It is further submitted by the GEPF that the first applicant had a representative on the PSCBC
and, according to the attendance register, was present at the meeting. The minutes of that
meeting do not reflect that the first applicant’s representative was late. Further in that regard, no
proof was provided by the first [applicant], who bears the onus in that respect, of any late coming
on the part of that representative. It follows that the first applicant was in fact “consulted” on the
issue of the relevant factors to be used, both as a member of the Board of GEPF, as well as part
of the PSCBC. At neither time was any objection raised.
In my view, determining the relevant factor primarily depends upon the actuary’s advice. That
much flows from the dicta in Premier, Western Cape v President of the Republic of South Africa…6
The GEPF is not obliged to accept the input of the employee organisations. Furthermore, in the
present instance, both parties acquiesced in the determination of the relevant factors.’7

[41] Having reached the conclusions set out above the court below, as stated earlier,
dismissed the application with costs. The court below, because of the manner in which it
decided the dispute between the parties, did not consider it necessary to deal with the
issue of whether condonation ought to have been granted and whether the decision to
alter the actuarial interest factors constituted administrative action, as defined in the
PAJA, and further, whether a conclusion in regard thereto would be decisive. We are
required at the outset to deal with both of those questions.

6 Premier, Western Cape (above fn 4).
7 Public Servants Association (above fn 3) paras 20-24. (Citations omitted.)

[42] There is presently no judicial consensus on whether decisions of pension funds,
either generally, or in limited circumstances, constitute administrative action as
contemplated in the PAJA.8 It must, in my view, depend on the nature of the power being
exercised by the fund, having regard to the related statutory provision or rule under which
it is exercised.9 However, in the present case, counsel were ultimately agreed that the
classification of the decision to amend the interest factors is not decisive and that it is not
strictly necessary for that analysis to be undertaken. The challenge to the decision in this
case is based on a failure to comply with the rules of the GEPF, which are mandated by
the PFA. It is, in essence, a legality challenge. It was accepted by the parties, condonation
aside, that if we were to conclude that rule 14.4.2 dictates that consultation should
precede a decision to alter the actuarial interest factors and that consultation has to take
the form of consultation with employee organisations, rather than through the PSCBC,
and that the majoritarian principle relied on by the GEPF before us was without merit,
then the appeal should succeed. Conversely, if we were to incline on the side of the
stance adopted by the GEPF, namely, that consultation could occur after the decision
had been taken to alter the actuarial interest factors, that the PSCBC was an appropriate
forum within which the consultation could take place and that the consultation process
was of minor importance because it was superseded by the important role of the Board’s
actuaries, the appeal falls to be dismissed.

8 See Gerson v Mondi Pension Fund and Others [2013] ZAGPPHC 160; 2013 (6) SA 162 (GJ) para 45
and the discussion preceding it. See also Moshoesoe v Sentinel Retirement Fund and Others GJ 13-09-
2019 case no 2506/19; 2019 JDR 1972 (GJ) para 11 et seq; Themba and Another v Retail Provident
Fund (Shoprite) and Others WCC 06-05-2014 case no 9647/13 para 21; and the minority judgment in
Government Employees Pension Fund and Another v Buitendag and Others [2006] ZASCA 166; 2007 (4)
SA 2 (SCA) paras 24-30.
9 See Grey’s Marine Hout Bay (Pty) Ltd and Others v Minister of Public Works and Others [2005] ZASCA
43; 2005 (6) SA 313 (SCA) para 24.

[43] The enquiry into the delay in launching the review application is the anterior
question, which will determine whether the other questions require to be addressed.
Delay, and whether it should in the circumstances of a particular case be condoned, must
feature in a PAJA or legality review. In terms of the PAJA the outer limit is 180 days from
being informed, or from the time the person might reasonably have been expected to
know, of the administrative action, within which an application for the review thereof must
be brought.10 Section 9(2) of the PAJA enables a court, on application by a litigant, to
grant an extension of the 180-day period ‘where the interests of justice so require’. In
respect of a legality review, it is a long-standing rule that it must be initiated without undue
delay and that courts have the discretion to refuse a review application in the face of an
undue delay or to overlook the delay.11 In exercising that discretion a court must be
informed by the values of the Constitution.12

[44] In considering whether the delay should be overlooked, a court will have regard to
the delay and the attendant circumstances. The chronology of events has to be revisited.
As stated at the beginning of this judgment, the Board resolution concerning the alteration
of the actuarial interest factors was taken on 3 December 2014, contemplating
implementation from 1 April 2015. In its founding affidavit, the PSA stated that it first
obtained knowledge of the GEPF decision during July 2015. Shortly thereafter it received
queries from members concerning the benefits they had received subsequent to the

10 See s 7(1) read with s 6(1) of the PAJA.
11 Altech Radio Holdings (Pty) Ltd and Others v City of Tshwane Metropolitan Municipality [2020] ZASCA
122 para 18.
12 Khumalo and Another v MEC for Education, Kwazulu-Natal [2013] ZACC 49; 2014 (5) SA 579 (CC)
para 44.

decision. The GEPF in its answering affidavit contended only that it was improbable that
the PSA became aware of the impugned decision as late as July 2015 because its
members served on the GEPF Board of Trustees, suggesting knowledge of the decision
at an earlier stage and consequently an earlier court challenge. This stance by the GEPF
discounts the continuing engagement between the parties after the decision was taken,
albeit with entrenched attitudes on both sides. The GEPF does not, however, take issue
with the assertion by the second appellant that he only became aware of the alteration
and the effect it would have on his withdrawal benefits on 12 July 2016 when he was
contacted by the PSA’s attorney. Nor does it take issue with the statement that the second
appellant first approached the PSA with queries after an article on the amendment to the
actuarial interest factors had appeared in a Sunday national newspaper during August
2015. The GEPF, in an attempt to sanitise its failure to engage employee organisations
before the decision was taken engaged the PSCBC, by way of the letter referred to in
para 17 above, proposing that pension related matters be discussed there and that issues
such as consultation on actuarial interest be placed on the agenda for the next meeting
of the PSCBC.

[45] On 18 August 2015, the PSA wrote to the GEPF requesting that the decision be
withdrawn, pending consultation as envisaged in rule 14.4.2. The GEPF, however, was
determined to press on with the idea that the matter should be dealt with at the PSCBC.
A special PSCBC Council meeting was held on 23 September 2015. Labour’s reaction
was to call on the GEPF to put the amendments on hold. They requested time to make
‘meaningful inputs’. This, against the fact that the decision had already been taken. As to
whether the PSCBC was the appropriate forum the Employer, in this case Government,

asked whether it was there only as observer. It clearly did not understand its role. It was
agreed by the meeting that labour would consult and revert.

[46] On 7 October 2015 the PSA’s erstwhile attorneys wrote to the GEPF calling upon
it to reverse the decision to alter the actuarial interest factors. It was pointed out that the
decision was taken in contravention of the rules. The GEPF’s response, in a letter dated
28 October 2015, through its attorneys, is revealing. The following is the contents of that
letter:
‘We wish to state the following:-
1) That the [Board of Trustees] is scheduled to meet on 4 December 2015 to amongst others
deliberate on the matter and unless a resolution is passed by [it] setting aside its previous
resolution relating to the “benefit structure”, the status quo shall remain.
2) That we wish not to deal at length with intricacies of this matter and failing of such should not
be construed as an admission of any issues and our Client’s rights are fully reserved herein’

[47] A further meeting of the PSCBC was convened on 29 October 2015. Labour again
called for the amendments to be put on hold. On 11 December 2015 the next meeting of
the PSCBC was held. It was there where the labour representative responded as
described in para 23 above.

[48] On 5 January 2016 the GEPF’s attorneys wrote as follows:
‘1) That the [Board of Trustees] indeed has deliberated on this matter on 4 December 2015.
2) That’s its position as previously advised stands which has been extensively articulated on in
principle that “changes in actuarial interests are not changes to the benefit structure, albeit such

changes can result in an increase or a decrease in the amount of benefit paid to members on a
particular mode of exit”.’ (Emphasis added).

[49] On 29 January 2016 there was a further communication from the GEPF in which
it was stated that agreement had been reached at the PSCBC in respect of issues related
to the alteration of the actuarial interest factors. In April 2015 the PSA’s new attorneys
wrote to the GEPF calling upon it to reverse its decision, failing which there would be an
approach to court. On 28 April 2016 the GEPF wrote in response, stating that the last
PSCBC meeting had 'condoned’ the application of the altered actuarial interest factors
and expressing surprise that legal action was being threatened.

[50] The PSA in its founding affidavit stated that as early as January 2016 it had
instructed its erstwhile attorneys to prepare an application to court to compel the GEPF
to consult with employee organisations as prescribed in the rules. When no progress was
made it terminated the attorneys’ mandate. In April 2016 it engaged its present attorneys,
who then sent the letter threatening litigation, referred to above. Subsequently the trade
union, Solidarity, served court papers on the GEPF and on the PSA as an interested
party. The PSA considered it prudent to obtain the advice of counsel on whether it should
embark on its own litigation. That caused a further delay until the application that is the
subject of this appeal was launched in July 2016.

[51] It is true that the application could have been launched a few months earlier. It is
equally true that the GEPF was intent on ratification, rather than consultation, and from
the correspondence referred to above it is clear that it placed little value on the

consultative process. This is an aspect to which I shall return when I deal with the merits
and the submissions in relation thereto on behalf of the GEPF. It must also be borne in
mind that the GEPF was dead set on pursuing the PSCBC route and insisted that ex post
facto consultation of the kind it envisaged would suffice.

[52] The PSA was emphatic that the setting aside of the GEPF decision would cause
the GEPF no prejudice as it was aware, from the time that the PSA first challenged its
decision that the decision would not be accepted, but it pushed ahead nonetheless and
this has to be seen against the many members who were potentially prejudiced by its
failure to consult. The allegations by the GEPF regarding prejudice are sparse. It did not
give any indication of the precise number of affected members who left the GEPF since
1 April 2015, nor of the costs, it said ‘would be a huge burden on the administration of the
GEPF’. It was, however, in the invidious position, that it had created for itself, of not
knowing what a proper consultation process, involving a proper interrogation of actuarial
assumptions and valuation, would yield. It could also not know whether a present
valuation could meet a readjustment of actuarial interest factors for a limited category of
persons, who left the fund after 1 April 2015. The actuarial factors were altered in favour
of members once again in 2016. The category of persons affected is limited and the
duration as well. The GEPF could not know whether there should be an approach to
government to meet a shortfall, if that eventuated, or what government’s response would
be.

[53] I pause to point out that during oral argument before us it was accepted on behalf
of the PSA that the wide nature of the relief sought in the notice of motion could not be

sustained and that the court could not order that the prior actuarial factors be applied
pending consultation. In the event that we inclined in the PSA’s favour it accepted that all
that could be ordered was that the consultation that did not occur should take place.

[54] In my view, on a conspectus of all the circumstances, including potential prejudice
and having regard to the prospects of success on the merits, which I will deal with in due
course, this is a case in which the delay should, whether in terms of the PAJA or on the
basis of a legality review, be overlooked or excused.

[55] I now turn to a consideration of the merits. It is clear that there is a distinction
between situations in which a decision, by way of statutory prescripts or binding rules,
has to be taken ‘in consultation’, and where a decision has to be taken ‘after consultation’.
The former requires agreement and the latter requires that the decision be taken in good
faith, after consulting and giving serious consideration to the view of the party that has to
be consulted.13

[56] In Government of the Republic of South Africa v Government of KwaZulu and
Another 1983 (1) SA 164 (A) this court said the following at 199G-200A:
‘The State President’s power to amend an area which has been declared by him to be a
self-governing territory is not unlimited, for, since such an area is an area for which a legislative
assembly has been established in terms of the provisions of s 1(1) [of the National States
Constitution Act 21 of 1971], an amendment thereof may be made only after consultation by the
Minister with the Cabinet of the territory concerned… It is clear from the aforegoing that the State

13 Unlawful Occupiers, School Site v City of Johannesburg [2005] ZASCA 7; 2005 (4) SA 199 (SCA) para
13.

President’s powers ... are subject to the limitation that they may be exercised only after there has
been consultation by the Minister with the Cabinet…’ (Emphasis added).

[57] The sequence in rule 14.4.2 is clear. Consultation should occur before the decision
is made and the party to be consulted should be afforded the opportunity to present a
point of view that then must be seriously considered. It does not have to be accepted but
it must be considered. Put differently, consultation was a precondition for a valid decision.
The court below erred in not recognising this.

[58] Furthermore, rule 14.4.2 specifies the functionaries that must be consulted,
namely, employee organisations. In the past the identification of and consultation with the
specified entities did not seem to pose a problem. ‘Employee organisations’, it will be
recalled, are defined as set out in para 12 above. Some of the legislation referred to in
that definition has been superseded by the LRA. During argument before us counsel for
the parties were each requested to submit a note on the legislative changes that might
have a bearing on the case. The changes and the belated submissions on behalf of the
GEPF in that regard are dealt with hereafter.

[59] As set out in para 12 above, the rules recognised as an ‘employee organisation’:
an admitted employee organisation referred to in s 1 of the Public Service Labour
Relations Act, 1994 (the PSLRA), an admitted employee organisation referred to in s 1 of
the Education Labour Relations Act 146 of 1993 (ELRA), and an employee organisation
or other ‘employee structure’ appointed in terms of the Intelligence Services Act 38 of
1994, the Defence Act 44 of 1957 and the South African Police Services Act 68 of 1995

and which has for negotiating purposes been accepted by the employer. The PSLRA
defined an ‘admitted employee organisation’ as ‘any employee organisation referred to in
s 26(5) and (6)’. Those subsections provide, inter alia, for the continued recognition of an
organisation which had previously been a member of the chamber of the Public Services
Bargaining Council at central level and for the recognition subsequent to the
commencement of that Act to prove to the ‘relevant’ chamber by way of verified
membership that they are ‘sufficiently’ representative of employees as determined by the
constitution of the central chamber. Section 10 of the PSLRA deals with the admission of
an employee organisation to the chambers of Council in order to participate in the
proceedings thereof. Council was defined in the PSLRA as the Public Services Bargaining
Council.

[60] The ELRA defined ‘admitted employer organisation or employee organisation’ as
follows: ‘such an organisation admitted to the Council in terms of the provisions of section
10’. That section provided that the Education Labour Relations Council was the entity to
decide on the admission as an employee organisation. Similarly to the position in respect
of the PSLRA, at least one of the criteria was whether the organisation sought to be
admitted was sufficiently representative.

[61] The PSLRA and the ELRA were repealed by the LRA. However, the provisions in
the repealed statutes that relate to employee organisations were retained by the LRA.
Section 212 of the LRA, read with Schedule 7, appears to have preserved the position of
previously recognised employee organisations as provided for in the ELRA and the
PSLRA. As stated earlier, identifying and consulting those organisations did not appear

to have been a problem in the past. Consultation in terms of rule 14.4.2 must therefore
mean consultation before a decision is reached with all previously recognised employee
organisations. We know that in the present matter consultation beforehand was not
conducted at all. There is no justification for the submission on behalf of the GEPF,
namely, that the only employee organisations that have to be consulted in terms of rule
14.4.2 are those that meet the PSCBC membership threshold. It was never raised as an
issue in the answering affidavit, nor was it raised in its interactions with the PSA and there
appears no basis for it on a reading of any of the provisions of the related legislation or
the rules of the GEPF. In any event, the PSA, a representative union, was not consulted
and it was uncontested that NAPTOSA, a representative trade union, was not present at
the last meeting of the PSCBC on which the GEPF relied.

[62] The GEPF was dismissive of whatever potentially useful input might be received
from employee organisations. It persisted in argument before us to elevate above any
form of reproach the views of its actuaries. It sought to minimise the utility of the
consultative process and maximise the weight of an actuarial report. Actuaries are
statisticians who make assumptions in relation to risks in the field of pensions and in the
insurance industry. They provide assistance in the valuation of pension funds. However,
they, like other professionals, are not impeccable. Their assumptions and valuations are
subject to interrogation and challenge. They might be proved right, or not. Consultation
provides an opportunity for their views to be put to the test.

[63] It must be borne in mind that the GEP law and the rules place primary
responsibility for the administration and management of a fund on the Board.14 It is true
that a Board must appoint an actuary to be a ‘valuator’ of a fund and is required to provide
such a valuation periodically and to report thereon to the Board.15 The report makes
recommendations in relation to any deficit or surplus in the fund. The actuary’s
appointment is valid until terminated by the Board. The actuarial report must comply with
s 16 of the Pension Funds Act 24 of 1956. It is the Board that ultimately takes decisions
after recommendations are made. It is the Board that is required to consult the employee
organisations as defined in the rules. Rule 14.4.2(b) makes it clear that it is the Board
which determines the A(X) factor acting on the ‘advice’ of the actuary. There is no room
for elevating the actuary above its station in the scheme of the GEP law and the rules.
Section 29(5) makes the rules of the GEPF binding on the government, the GEPF, its
members, pensioners, beneficiaries or any other person who has a claim against the
GEPF.

[64] This court is not called upon to decide the merits or demerits of the actuarial report
on which the GEPF based its decision. The consultation process is where engagement
on those issues will occur. Ultimately, when that process is completed the GEPF will be
called upon to make a decision about appropriate actuarial interest factors. It makes
sense that employee organisations should be consulted as their membership’s pension
benefits are impacted. It does not behove the GEPF to downplay the consultative
process.

14 Sections 6 and 7 of the GEP law and rule 4 of the rules of the GEPF.
15 Rules 4.8 and 4.9 of the GEPF rules.

[65] Can the failure by the GEPF to consult beforehand be sanitised by the GEPF’s
belated attempts to invoke the PSCBC as a forum through which, it was contended on
behalf of the GEPF, the same result could be achieved? The short answer is no. The rule
is clear about the sequence of events: first consultation, followed by a decision. Inverting
the order in these circumstances makes a nonsense of consultation. The case law
referred to above makes it clear that there must be a good faith consideration of what the
consultation yields. In the present case the invocation of the PSCBC by the GEPF was
an ill-advised attempt, not so much as to cure the incurable defect but rather to enforce
the GEPF’s will. It was resorted to because the consultation with the various employee
organisations proved tedious and burdensome. That much is clear from the GEPF’s own
documents referred to above.

[66] The powers and functions of a bargaining council are set out in s 28 of the LRA.
They do not include dealing with a consultation process by a Board of Trustees, as
determined by the rules of any pension fund. For present purposes I accept that pension
matters could conceivably be part of a dispute between labour and employers, where for
example it impacts on conditions of service and involves, say, a position adopted by an
employer that employees feel aggrieved about. I also accept that employers, employees
and pension funds could agree that the PSCBC be employed to reach agreement on
matters of mutual concern.16 That was not the case here. The GEPF insisted on using

16 Section 31 of the GEP law provides for changes to benefit structures brought about by agreement
reached in the bargaining structures for the Public Service. This, as opposed to rule 14.4.2, which
provides for a specified consultation process when there is a specific intended alteration of actuarial
factors.

that forum to ‘consult’ after a decision was reached. As was pointed out earlier it was not
a consultation process but was aimed at imposing its decision that had already been
made. Section 51 of the LRA, which deals with the dispute resolution functions of a council
concerning matters of mutual interest, envisage labour and employers in one or other
guise on either side of a dispute. In this case there was no substantive dispute with the
employer, nor indeed with the GEPF, except in relation to the process of consultation. In
any event, at the first meeting of the PSCBC, referred to earlier in this judgment, the
employer did not even know what its role was. It sought clarification on whether it was
there as an observer. As was evident from the correspondence between the GEPF and
the PSCBC, the former sought to use the latter to overcome what it considered to be a
fragmented and burdensome process and wanted to impose its will.

[67] The court below erred in taking into account in favour of the GEPF that labour
representatives served on the Board of the GEPF and that this somehow excused the
GEPF from consulting the employee organisations specified in rule 14.4.2. The rule
requires consultation by the Board, qua Board, with employee organisations, not with the
PSCBC, when there is a specific alteration of the actuarial interest factors. The Board has
no power to act outside of the GEP law and the rules. It is obliged in terms of the rules to
consult with employee organisations before settling on actuarial interest factors. It did not
do so. The ‘majoritarianism’ principle on which counsel for the GEPF relied for the
proposition that parties should be held to PSCBC decisions, where those that meet its
threshold requirements, hold sway, is fallacious. The rules prescribed a specific
consultative process before arriving at a decision. It had to be followed. It was not followed
and consequently its decision is flawed and liable to be set aside.

[68] In light of the conclusions reached the following order is made:
The appeal is upheld with costs, including the costs of two counsel.
The order of the court below is set aside and substituted as follows:
‘(a)
The delay in bringing the application for review is excused;
(b)
The decision of the first respondent to amend, with effect from 1 April 2015,
the F(Z) and A(X) factors utilised in the calculation of actuarial interest under
Rule 14.4.2 of the Rules of the Government Employees Pension Fund is
reviewed and set aside;
(c)
The first respondent is ordered to consult with the first applicant, the second
respondent, the fourth to nineteenth respondents and all other employee
organisations as defined in the Rules of the Government Employees
Pension Fund concerning the calculation of the actuarial interest referred to
in (b) above, in respect of those affected thereby;
(d)
The first respondent is to pay the costs of the application, including the costs
of two counsel where so employed.’

_____________________
M S Navsa
Judge of Appeal

APPEARANCES

For appellants:
C E Watt-Pringle SC (with him M Sibanda)

Instructed by:
Faskin Inc

Webbers, Bloemfontein

For respondents:
V Ngalwana SC (with him S Khumalo and F Karachi)

Instructed by:
Mohalutsi Attorneys Inc, Pretoria

Bezuidenhouts Inc, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

The Public Servants Association of South Africa and others v Government Employees
Pension Fund (Case no 886/2019) [2020] ZASCA 126

From:  The Registrar

Date:   9 October 2020

Status: Immediate

The following summary is for the benefit of the media in the reporting of this case and
does not form part of the judgment of nor is it binding on the Supreme Court of Appeal

Today the Supreme Court of Appeal (SCA) handed down judgment in an appeal against a
decision of Van der Westhuizen J, sitting in the Gauteng Division of the High Court, Pretoria
(the high court). The appeal was upheld with costs, including the costs of two counsel.

The matter involved the interpretation and application of the rules of the First Respondent, the
Government Employees pension Fund (the GEPF). In terms of the rules the GEPF was
required to consult ‘employee organisations’ before making a decision concerning the
alteration of actuarial interest factors employed in the calculation of benefits.

The GEPF had made a decision without consulting the employee organisations. When the
appellant, the Public Servants Association (the PSA) protested, the GEPF sought to use the
Public Service Co-ordinating Bargaining Council (the PSCBC) as a means of ex post facto
consultation.

The high court held that the GEPF was justified in doing so. It took into account that the GEPF
itself had employee representation on the Board as did the PSCBC and that the role of
actuaries was the significant factor. It held the consultation requirement meant only that
discussion and not agreement should ensue.

It dismissed the application by the PSA to have the decision by the GEPF altering the actuarial
interest factors set aside with costs, including the costs of two counsel.

The SCA held that the envisaged consultation had to precede the decision and had to take
the form prescribed by the rules, namely, with employee organisations. It rejected the
argument that the views of the majority should prevail through the medium of the PSCBC. It
held that consultation meant that the views of the entity or person that had to be consulted
must be considered by the decision maker. It held further that the views of actuaries were
subject to interrogation.

In the result the appeal was upheld with costs including the costs of two counsel. The decision
of the GEPF was set aside and it was ordered to consult with the employee organisations
concerned.