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LESOTHO
IN THE COURT OF APPEAL OF LESOTHO
HELD AT MASERU C of A (CIV) NO. 75/2024
CIV/APN/385/2019
In the matter between:
MAFETA MONETHI APPELLANT
and
CHAIRPERSON, BENEFITS ADMINISTRATION
COMMITTEE 1ST RESPONDENT
BOARD OF TRUSTEES OF THE PUBLIC
OFFICERS’ DEFINED CONTRIBUTION PENSION FUND 2ND RESPONDENT
PUBLIC OFFICERS’ DEFINED CONTRIBUTION
PENSION FUND 3RD RESPONDENT
CORAM: MOSITO P,
DAMASEB AJA,
VAN DER WESTHUIZEN AJA
HEARD: 15 APRIL 2025
DELIVERED: 02 MAY 2025
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FLYNOTE
Pensions — Constitutional protection of retirement entitlements — Legal non-retrogression — Application of section 150 of the Constitution of Lesotho — Defined Contribution Pension Fund — Comparative benefit analysis — Administrative legality — Use of repealed legislative formula — Reviewable irregularity — Sechele principle applied.
The appellant, a retired public officer, challenged the computation of his retirement benefits by the Public Officers’ Defined Contribution Pension Fund, which applied the outdated 1/600th accrual formula under the repealed 1964 Pensions Proclamation in its comparative benefit assessment. He argued that the correct benchmark, pursuant to the Pensions (Amendment) Regulations 2011, was the enhanced 1/540th formula, and that the failure to use it breached both the principle of legality and section 150 of the Constitution of Lesotho. The High Court dismissed his claim.
Held: The Fund was constitutionally and legally obliged to adopt the 1/540th formula in conducting its benefit comparison, and to ensure that the appellant was not placed in a less favourable position than he would have been under the former regime. The High Court erred in upholding a computation based on a repealed formula, thereby violating the doctrine of legal non-retrogression and the Sechele precedent. The administrative act was ultra vires and irrational. No actuarial report was required where legal error was manifest on the face of the record.
Appeal allowed with costs. High Court order set aside. Retirement benefits to be recalculated using the 1/540th formula, ensuring compliance with constitutional and statutory standards.
JUDGMENT
MOSITO P
Introduction
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[1] This is an appeal against the judgment of Khabo J sitting in the High Court, delivered on 4 September 2024. The appellant, Mr. Mafeta Monethi, sought to review the decision of the Public Officers’ Defined Contribution Pension Fund (the Fund), which calculated his retirement benefits using the formula set out in the repealed Pensions Proclamation of 1964, rather than in accordance with the Public Officers’ Defined Contribution Fund Act of 2008 and its subsidiary instruments. The court a quo dismissed the application.
[2] The appellant contends, in essence, that the court a quo erred in failing to appreciate that the decision of this Court in Sechele v Public Officers’ Defined Contribution Pension Fund and Others1 , by necessary implication and constitutional imperative, established a benchmark that must inform all post-2008 pension computations involving transitioned public officers: namely, that no member ought to be placed in a worse position than that which would have applied had the 2008 Act not been enacted.
Background
[3] The appellant, Mr Mafeta Monethi, is a retired public officer who has rendered long-standing service under the Government of Lesotho. His pensionable service spanned two distinct legislative regimes: initially under the non-contributory, defined benefit scheme governed by the Pensions Proclamation of 19642, and later, by statutory compulsion, under the Public Officers’ Defined
1 Sechele v Public Officers’ Defined Contribution Pension Fund and Others C of A (CIV) No. 43B/2010.
2 Pensions Proclamation of 1964.
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Contribution Pension Fund Act3, which established a contributory, defined contribution scheme.
[4] Upon retiring, the administrators of the 2008 Fund computed the appellant's pension. In executing this function, the Fund undertook what it described as a comparative benefit assessment between the benefit that would have accrued to the appellant under the former (1964) regime and the benefit calculated in terms of the defined contribution formula under the 2008 Act. The stated aim of this exercise was to ensure compliance with the constitutional principle, reaffirmed in Sechele v Public Officers’ Defined Contribution Pension Fund (supra), that a public officer transitioning between schemes should not be placed in a worse financial position.
[5] However, as emerges from the judgment of Khabo J, the Fund’s comparative exercise employed the pre-2011 formula of 1/600th of pensionable emoluments per month of service as the applicable standard under the 1964 Proclamation. This was done even though the Pensions (Amendment) Regulations4 of had already revised the applicable accrual rate to 1/540th, thereby increasing the pension yield for each month of qualifying service.
[6] Khabo J upheld the Fund’s approach, accepting its submission that it had acted lawfully, and that the appellant had failed to establish a clear legal entitlement to the more favourable 1/540th formula. The learned judge held that the transition had been validly effected in terms of the enabling legislation and that
3 Public Officers’ Defined Contribution Pension Fund Act, 2008.
4 Pensions (Amendment) Regulations of 2011, published as Legal Notice No. 141 of 2011 .
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there was no basis for judicial interference with the Fund’s computation, particularly in the absence of an actuarial report quantifying the difference in monetary terms.
The facts
[7] Thus, the core factual basis of the appeal may be distilled as follows: the Fund, in purporting to apply the constitutional standard laid down in Sechele, conducted a comparative analysis using an outdated and repealed formula, and the court a quo upheld this computation despite the legal force of the 2011 amendment which had rendered the 1/600th formula obsolete. The appellant challenges the computation's method and legal foundation, asserting that his constitutional and statutory entitlements have been infringed.
Issues for determination
[8] Upon careful perusal of the record, the pleadings, and the submissions of counsel, the following issues arise for determination in this appeal:
[a] Whether the court a quo erred in law in failing to apply the amended pension accrual formula of 1/540th introduced by the Pensions (Amendment) Regulations, 2011, in assessing the appellant’s entitlement under the repealed 1964 scheme.
[b] Whether the continued reliance by the Fund and the court a quo on the repealed 1/600th formula constituted a misdirection in law and a violation of section 150 of the Constitution of Lesotho.
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[c] Whether, in light of the Sechele decision, the Fund was under a constitutional and legal obligation to conduct a comparative benefits assessment between the 2008 contributory scheme and the amended 1964 regime, and to adopt the more favourable result.
[d] Whether the appellant’s pension benefits were computed in a manner that satisfied the constitutional threshold of non-retrogression and the requirement not to be placed in a worse position as a result of the transition.
[e] Whether the Fund’s computation of benefits and the court a quo’s endorsement thereof breached the principle of legality and rational administrative action.
[9] These issues, taken together, concern the fidelity of administrative and judicial decision-making to constitutional imperatives in the context of pension reform, and whether the rights of the appellant, as a transitioned public officer, were lawfully and equitably determined.
Legal Framework
[10] This appeal presents a series of legal issues of undoubted constitutional significance. They may conveniently be grouped under several interrelated themes: first, the doctrine of legal non-retrogression as it arises within the field of pensions law; second, the constitutionalisation of statutory interpretation through the lens of section 150 of the Constitution of Lesotho; third, the principle of legality and its bearing upon rational administrative conduct; and finally, the necessity for a comparative assessment
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of benefits where pension schemes are transitioned or restructured.
[11] The doctrine of legal non-retrogression occupies an increasingly central place within the architecture of modern constitutional and administrative law. It has particular resonance in the domain of socio-economic entitlements, among which pension benefits stand as a paradigmatic example. This principle, whose normative force derives from the rule of law and constitutional fairness, insists that reforms or transitions in pension law—whether by legislative or administrative means—must not result in a diminution of rights already accrued or legitimately expected. To do otherwise would be to undermine the certainty and predictability upon which individuals structure their lives, especially when approaching retirement.
[12] In this light, section 150 of the Constitution of Lesotho must be understood. This provision is no mere transitional or savings clause frequently encountered in constitutional instruments. Properly construed, it is a normative guarantee—a constitutional injunction—that pension entitlements, once earned or crystallised under a prior regime, must not be altered to the detriment of the individual. It sets a floor beneath which no legislative or administrative measure may descend. Thus, any enactment or regulatory measure must be read, where the language allows, in a manner that secures previously acquired rights and preserves the substantive value of the benefits conferred.
[13] The courts' interpretive obligation in this regard is correspondingly elevated. It requires a teleological approach to
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construction, one that prioritises the Constitution's protective aims over rigid formalism. Where the statutory language is ambiguous, the courts prefer the construction that aligns with constitutional values and avoids the erosion of protected entitlements.
[14] This is especially so in the context of transitions between pension regimes—such as from defined benefit schemes to defined contribution models. In such instances, the law recognises what may be termed the doctrine of comparative benefit assessment. It demands that the entitlements available under the new regime be weighed against those under the old, and that the individual member not be placed in a worse position due to the change. The guiding premise is one of constitutional fidelity: that no person should, by the mere operation of institutional reconfiguration, find themselves deprived of a benefit to which they had either already acquired a right or had a legitimate expectation of receiving.
[15] Therefore, administrative authorities and pension fund managers cannot adopt methods of calculation or interpretation solely on the grounds of administrative convenience or financial prudence. They are bound by the overarching requirement to conform to the constitutional imperative of fairness. They must adopt the formula that most faithfully reproduces the benefits due to the member under the prior scheme, or at the very least ensures parity of treatment. A failure to do so not only contravene the principle of non-retrogression but also engages the constitutional principle of legality.
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[16] The principle of legality, long recognised as a foundational pillar of the rule of law, requires that all exercises of public power have a lawful basis, are exercised within the scope of that authority, and are directed towards the purpose for which the power was conferred. In the sphere of pension administration, this principle assumes concrete form in the obligation to calculate benefits strictly in accordance with the enabling statute and any applicable subsidiary rules. Where discretion is afforded, it must be exercised in a manner that is rational, transparent, and guided by relevant considerations.
[17] It would be inimical to legality for a fund to revert to a repealed formula, or one overtaken by subsequent enactment, simply because it is familiar or actuarially convenient. To do so would not only violate the statute but also run afoul of the administrative law standard of reasonableness, which demands that decision-making be intelligible, evidence-based, and responsive to the legal framework within which it occurs.
[18] In matters affecting socio-economic rights of this kind, administrative decision-makers must demonstrate that their decisions rest upon accurate legal understanding and a conscientious appraisal of the factual matrix, including actuarial valuations and financial assumptions. The stakes for the individuals concerned are high; their livelihoods in retirement may depend on the fidelity with which these standards are observed.
[19] In Sechele v Public Officers’ Defined Contribution Pension Fund and Others(supra), this Court was called upon to consider the constitutionality of pension arrangements imposed upon a
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member of the Lesotho Defence Force who, by virtue of statutory command, had been compulsorily transitioned from the historic non-contributory scheme established under the Pensions Proclamation of 1964 into the newly established Public Officers’ Defined Contribution Pension Fund under the 2008 Act. Central to the Court’s reasoning was the application of section 150 of the Constitution of Lesotho, a provision whose language is as austere as it is protective. It provides that any person who, prior to the commencement of the Constitution, was entitled to benefits under a public pension scheme shall not, by virtue of any new law, be placed in a position less favourable than that which they previously enjoyed.
[20] In adjudicating the matter, the Court invoked a principle long familiar to constitutional jurisprudence: that of legal non-retrogression. In giving concrete expression to this principle, the Court interpolated—by necessary implication—a proviso into section 27 of the 2008 Act, to the effect that:
“...provided that the retirement benefits payable to a member shall not be less than the benefits such member would have received under the law with respect to pensions benefits which would have applied if this Act had not been passed.”
[21] That interpretive gloss is no mere semantic flourish. It performs a pivotal constitutional function. It establishes a minimum threshold—a constitutional floor—below which the retirement benefits payable to a transitioning member cannot descend. It directs that, where a public officer’s employment spans the 1964 and 2008 regimes, the Fund is legally obliged to adopt
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whichever computation results in the more favourable benefit. It is a doctrine rooted in equity, reason, and the rule of law.
[22] To understand the implications, one must recall the structure of the 1964 regime. Under the original formulation, a public officer accrued retirement benefits at a rate of 1/600 of pensionable emoluments per month of service, which, over a 30-year career, yielded 60% of final salary as pension. However, in 2011, the Pensions (Amendment) Regulations recalibrated this formula, increasing the accrual rate to 1/540. Under the revised arrangement, the same 30-year service yielded a pension equal to 66.67% of final salary. This amendment was not merely arithmetic—it reflected a deliberate policy shift towards enhancing the financial security of retiring public officers, thus setting a new standard for adequacy.
[23] The distinction between the two regimes could not be starker. The 1964 scheme was non-contributory; its benefits were defined and guaranteed by the state, and its method of calculation was formulaic and predictable. The 2008 Fund, by contrast, is contributory, market-based, and actuarially sensitive. Members contribute alongside the employer, and the final retirement benefit is a function of the member’s fund credit, comprising contributions, investment returns, and charges, subject to the statutory framework of the Fund.
[24] That framework is governed, most notably, by section 27 of the 2008 Act, which, prior to its 2022 amendment, stated in peremptory language that upon retirement, a member “shall be entitled to a portion of his or her fund credit to the maximum of 25%
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as a cash benefit. The remaining percentage shall be used to purchase an annuity.” The use of the word “shall” leaves no discretion: the administrator is bound to disburse no more than 25% in cash and must convert the remainder into an income-producing annuity.
[25] This structure must be interpreted in light of the mischief it was designed to remedy. Its clear policy aim is to safeguard the long-term sustainability of retirement income, preventing its premature dissipation. It is paternalistic in form and protective in substance, seeking to ensure that retirement capital is transformed into a reliable income stream, rather than spent at once. The Fund thus prescribes an architecture of income preservation over immediate liquidity.
[26] Yet, this structure, commendable in theory, cannot lawfully operate to diminish the entitlements of a public officer who entered the pension system under a wholly different legal regime—especially one that promised not merely defined benefits but non-contributory entitlements guaranteed by the state. The legal position becomes even more fraught when the officer is required, under sections 4 and 5 of the 2008 Act, to not only forfeit the defined benefit methodology but also commence contributing to a system that may ultimately return less than what was guaranteed under the former regime.
[27] This raises two constitutional thresholds that any retirement benefit must satisfy in respect of such an officer: first, the sufficiency threshold: Is the total benefit received under the 2008 scheme—cash lump sum plus annuity—at least equal in value to
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what the officer would have received under the 1964 formula, now enhanced by the 2011 amendment? Second, the equity threshold: Has proper account been taken of the fact that the officer’s prior entitlement was non-contributory, and that any shift to a contributory system must not result in a net reduction in benefit or an unjust shifting of the financial burden to the officer?
[28] Unless both these thresholds are satisfied, the transition is constitutionally infirm. By legislative sleight or actuarial abstraction, the state cannot extinguish accrued socio-economic rights under the guise of reform. As the Court made plain in Sechele, statutory provisions must be read to conform with the Constitution unless the legislative text explicitly precludes such conformity. The absence of such exclusion here compels this Court to interpret the 2008 Act as preserving the entitlements earned under the earlier regime.
[29] The Public Officers’ Defined Contribution Pension Fund (Amendment) Act5, which increased the allowable cash payout to 50% and introduced actuarial conversion factors for determining annuity purchases, may mitigate the shortfall. But it cannot cure an inherent structural deficiency where the accrued benefit remains below constitutional minimums. No matter how administratively efficient or financially prudent, a pension system cannot trump the Constitution’s normative architecture.
[30] In conclusion, the law does not permit the state to do indirectly what it is forbidden to do directly. It cannot impose a
5 However, Public Officers’ Defined Contribution Pension Fund (Amendment) Act 2022 has no implication to the present because the appellant retired before this Act was passed. It is only mentioned Hic tantum memoratur ut imaginem perficiat."
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lesser pension by administrative transition, any more than it can extinguish it by fiat. The constitutional guarantee in section 150, as judicially illuminated in Sechele, ensures that public officers—especially those compulsorily transferred from a non-contributory to a contributory scheme—retain the substantive value of their earned entitlements. If the law is to be upheld, the two more excellent benefits must be given. Anything less would not be reform—it would be repudiation. And that, the Constitution does not permit. With these jurisprudential considerations in view—each one grounded in the core values of the Constitution and the common law tradition—I proceed to consider the appeal.
The Contention on Appeal
[31] The central thrust of the appellant’s argument is that the Fund, in computing his retirement benefits, relied upon a now-superseded formula—1/600th of pensionable emoluments per completed month of service—under the Pensions Proclamation 1964. The appellant maintains that this was legally impermissible and constitutionally infirm, given that the Proclamation was amended in 2011 by the Pensions (Amendment) Regulations, Legal Notice No. 141 of 2011, which changed the formula to 1/540th.
[32] It is contended that the court a quo failed to appreciate that the 2011 amendment had become part of the applicable law in terms of which a comparison under the Sechele standard ought to have been conducted. The appellant argues that had the 1/540th formula been applied, it would have yielded a superior outcome than the computation undertaken under the Fund’s adopted model. Thus, to the extent that the Fund either ignored or failed to
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apply the 1/540th formula properly, it misdirected itself and committed a reviewable irregularity, which the court a quo failed to correct.
Consideration of the Appeal
[33] The gravamen of the appellant’s challenge lies not in a generalised dissatisfaction with the amount paid, but in a pointed assertion that a more favourable formula, legally and constitutionally applicable, was ignored to his detriment. This, it is said, runs afoul of the principle distilled in Sechele and entrenched in section 150 of the Constitution.
[34] I now proceed to consider whether a transitioned public servant may lawfully receive a lesser pension than that which would have been payable under the prior, non-contributory regime, particularly in light of the amendment to the Pensions Proclamation Regulations in 2011 and the interpretive injunction laid down in Sechele v Public Officers’ Defined Contribution Pension Fund and Others.
[35] In the court a quo, Khabo J upheld the computation adopted by the Public Officers’ Defined Contribution Pension Fund, which had relied on the pre-2011 formula of 1/600th of pensionable emoluments per completed month of service in its comparative exercise. This approach was advanced notwithstanding that the Pensions (Amendment) Regulations of 2011 had already enhanced the formula to 1/540th, thereby increasing the retirement yield for qualifying officers. The learned judge dismissed the appellant’s complaint, holding that no legal right to the superior formula had
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been established, and that the Fund had exercised its administrative discretion within the bounds of the enabling legislation. With respect, that conclusion is unsustainable.
[36] The question before the Court is not one of administrative generosity or actuarial expedience, but one of constitutional fidelity and statutory compliance. Section 150 of the Constitution of Lesotho is clear and unambiguous in its command: no person entitled to a pension under the former law shall, by virtue of any new law, be placed in a position less favourable than that which previously obtained. That provision, as this Court held in Sechele, is not a relic of transitional drafting; it is a normative instrument that binds all organs of state and statutory funds. It sets a constitutional floor, not subject to legislative repeal, beneath which pension entitlements may not fall.
[37] The essential misdirection of the court a quo, and indeed of the Fund, lay in the choice of baseline. Once the 1964 Proclamation was amended in 2011 by Legal Notice No. 141 of 2011 to provide for an enhanced accrual rate of 1/540th, that became the legally operative benchmark. Any comparative analysis conducted between the defined benefit and defined contribution schemes, as required by Sechele, had to adopt the 1/540th formula as the measure of what the appellant would have received had he remained under the 1964 regime. To rely on the repealed 1/600th formula, as was done here, was not simply an administrative misjudgment—it was a constitutional error, rendering the computation ultra vires.
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[38] Indeed, the principle of legal non-retrogression, acknowledged by constitutional democracies and reaffirmed by this Court, prohibits the unjust withdrawal or reduction of garnered or accruable socio-economic entitlements. In cases like this, where an individual served the state under a pension regime with a benefit formula that was legally enhanced during their service, any comparative assessment that attempts to utilise the annulled and lesser formula does not satisfy the sufficiency and equity standards definitively established by this Court.
[39] Moreover, the learned judge’s criticism that the appellant failed to furnish actuarial tables to demonstrate loss is, with respect, misplaced. The constitutional violation lies not in the quantum per se, but in the methodology. Once it is established that the wrong formula was used—an error not denied on the facts—the legal burden shifted to the Fund to justify its deviation from the correct standard. It failed to do so. The law demands compliance, not approximation.
[40] The appeal must succeed. The learned judge erred in law by upholding a computation based on a repealed legislative instrument, contrary to the Sechele standard and in violation of section 150 of the Constitution. The appellant’s pension must now be recalculated using the 1/540th accrual rate under the amended 1964 regime and measured against the 2008 scheme, with the greater benefit being conferred. Anything less would be a repudiation of constitutional command masquerading as administrative discretion.
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[41] The appellant, having been the applicant before the court a quo, had sought in his founding papers, inter alia, the review and setting aside of the decision of the first and second respondents concerning the computation of his retirement benefits. That primary relief was well-founded and fell to be granted. The administrative act in question—namely, the application of the 1/600th accrual formula from the repealed Pensions Proclamation of 1964—was legally untenable. That formula had been unequivocally superseded by the more favourable 1/540th accrual rate introduced by Legal Notice No. 141 of 2011. By reverting to the defunct 1/600th formula, the Fund had acted outside the scope of its lawful powers and in derogation of section 150 of the Constitution of Lesotho, as well as the constitutional principle crystallised in Sechele v Public Officers’ Defined Contribution Pension Fund. Such conduct had not been merely erroneous; it had been unlawful and irrational in the public law sense. In the words of Lord Diplock in Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374, an unreasonable or procedurally improper decision is susceptible to judicial review. The impugned decision fell squarely within that category and could not be allowed to stand.
[42] In the second limb of relief, the appellant had sought a declaratory order to the effect that the third respondent’s assessment and computation of his lump sum cash benefit and annuity contravened the governing statutory framework. That relief, too, was warranted. It appeared clearly from the record that the third respondent’s computation had relied upon a legislative benchmark that had long ceased to have legal force. To persist in
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applying a repealed formula was to act as though the law were frozen in time, and to forsake the principle that administrative decisions must conform to the law as it stood, not as it once stood. The declaration sought by the appellant,, therefore, served the vital constitutional function of affirming the supremacy of legality in public administration, which, constituted the very cornerstone of accountable government.
[43] It followed inexorably that the reliefs embodied in paragraphs (c) and (d) of the notice of motion also had to be granted. These reliefs sought a directive that the respondents undertake a fresh computation of the appellant’s retirement benefits, this time in accordance with the applicable law and constitutional mandate. The principle of legal non-retrogression, enshrined in section 150 of the Constitution, admitted of no ambiguity in this regard: a public officer could not, by reason of a legislative or administrative change, be placed in a less favourable position than that which would have obtained under the prior regime. Accordingly, the respondents bore a positive legal duty to recalibrate the appellant’s benefits, using the revised 1/540th formula introduced by the 2011 Regulations as the applicable benchmark. That recalculation was required to yield the greater two benefits, whether under the amended 1964 scheme or the 2008 contributory structure. Any other approach would have amounted to a repudiation of constitutional fidelity and a denial of the protection the law accords to accrued or accruable rights.
[44] For the sake of completeness, it is necessary to consider whether, apart from the 2011 amendment enhancing the accrual
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fraction from 1/600th to 1/540th, the appellant’s distinct contention has been properly addressed — namely, that the computation of his benefits ought to have complied with section 27 of the Public Officers’ Defined Contribution Pension Fund Act 2008, by affording him a lump sum payment of up to 25% of the full fund credit, including the transferred balance together with all accrued interest and growth.
[45] Lest there be any doubt, it is necessary to address the appellant’s further contention relating to the application of section 27 of the Public Officers’ Defined Contribution Pension Fund Act 2008. Section 27 entitles a retiring member to withdraw, as a lump sum, up to 25 per cent of their total fund credit, with the balance to be used to purchase an annuity. That "fund credit" properly includes the opening balance transferred from the prior pension regime and all lawful accretions such as interest and investment growth thereafter. Accordingly, in the fresh exercise directed by this Court, the computation of the appellant's benefit must ensure the adoption of the correct comparative formula (1/540th) and the accurate incorporation of the transferred balance and its growth into the fund credit. The appellant is entitled to a lump sum equivalent to 25 per cent of the correctly assessed total fund credit, with the balance applied to secure an annuity. Any computation disregarding these statutory and constitutional entitlements would further violate the principle of legality and section 150 of the Constitution.
[46] It is appropriate to observe that the insertion of paragraph [45]materially enhances the appellant’s position before this Court.
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Absent such clarification, there would exist a substantial risk that the respondents might interpret the Court’s order narrowly, confining themselves to a correction of the accrual formula while leaving untouched the broader question of the accurate assessment of the fund credit. By expressly directing that the recalculation must encompass not only the adoption of the 1/540th accrual rate but also the proper incorporation of the transferred balance and all lawful accretions thereto, paragraph [40A] ensures that the appellant’s full entitlements under the prior and current pension regimes are preserved and vindicated.
[47] Moreover, without this clarification, the appellant’s lump sum entitlement under section 27 of the 2008 Act might have been calculated solely by reference to contributions made post-transition, thereby materially reducing the quantum of the lump sum payable. With paragraphs [45]incorporated, it is clear beyond argument that the lump sum must reflect 25% of the total fund credit, including the transferred balance and its growth, thereby securing a larger immediate cash benefit for the appellant.
[48] Further, the insertion of paragraphs [45]promotes finality and curtails the prospect of future litigation. It leaves no room for doubt or evasion regarding the scope of the respondents’ duties. It binds the recalculation exercise firmly to the twin imperatives of statutory compliance and constitutional fidelity, thereby obviating the possibility that the appellant might otherwise be compelled to return to court to enforce rights already vindicated in principle.
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[49] In addition, the clarification reinforces the constitutional foundation of the appellant’s claim. It makes explicit that the relief granted is not confined to rectifying an administrative misstep but flows from the broader constitutional guarantees enshrined in section 150 of the Constitution and the principle of legality. This enhanced normative basis strengthens both the authority of the Court’s order and the appellant’s entitlement to its full and faithful execution.
[50] Finally, the financial implications of the clarification are manifest. A properly recalculated fund credit, incorporating the transferred balance and its growth, will yield a greater residual balance after the lump sum withdrawal, thereby securing a higher annuity and ensuring that the appellant’s retirement income meets the constitutional threshold of sufficiency and non-retrogression. Thus, the insertion of paragraph [44] to [50] is not merely desirable; it is necessary to ensure that the substantive justice of the matter is fully achieved.
Disposition
[51] We are satisfied that the appeal must succeed for the reasons advanced in this judgment. The court a quo fell into error by failing to appreciate that the applicable legal standard for comparison under the Sechele benchmark was the amended pension accrual formula introduced by the Pensions (Amendment) Regulations, 2011, and not the repealed 1/600th formula under the 1964 Proclamation. This misapplication of the law materially affected the validity of the benefit computation undertaken by the Fund.
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[52] Once it is accepted—as it must be—that the appellant’s pensionable service straddled both the repealed and current regimes, the Fund was constitutionally obliged to undertake a comparative analysis that preserved the higher benefit. That analysis could not lawfully be conducted based on an obsolete and superseded formula, and the Fund’s failure to apply the 1/540th rate amounted to a derogation from section 150 of the Constitution, which guarantees that no person shall be placed in a worse position by virtue of a change in the law governing pensions.
[53] The appellant was entitled, both as a matter of law and of constitutional principle, to have his retirement benefits assessed in a manner that fully accounted for the 2011 enhancement of the 1964 formula. The Fund’s failure to do so, and the court a quo’s affirmation of that failure, constitute reviewable irregularities warranting appellate correction.
[54] The High Court’s judgment cannot be allowed to stand and must be set aside. The Fund is to conduct a fresh computation of the appellant’s retirement benefits, this time correctly applying the 1/540th accrual rate as the benchmark for comparative purposes under the Sechele principle, and ensuring that the more favourable of the two benefit regimes is applied. Accordingly, the appeal is disposed of on these terms.
Order
[55] It is accordingly ordered as follows:
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1.
The appeal is upheld with costs.
2.
The judgment of the High Court is set aside and replaced with the following order:
o
(a) The decision of the Fund to compute the appellant’s retirement benefit using the 1/600th formula is set aside.
o
(b) It is declared that the appellant’s retirement benefits must be assessed under the Public Officers’ Defined Contribution Pension Fund Act 2008, in conjunction with the Pensions (Amendment) Regulations 2011, and section 150 of the Constitution of Lesotho.
o
(c) The respondents are instructed to recalculate the appellant’s retirement benefit accordingly, ensuring that it is not less favourable than the benefit that would have accrued under the 1/540th formula.
o
__________________________
K E MOSITO
PRESIDENT OF THE COURT OF APPEAL
I AGREE
_______________________________
P.T. DAMASEB
ACTING JUSTICE OF APPEAL
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I AGREE
____________________________________
J VAN DER WESTHUIZEN
ACTING JUSTICE OF APPEAL
FOR THE APPELLANT: Adv T Maqakachane assisted by Adv. K. Nyabela
FOR THE RESPONDENT: Adv R. Cronje assisted by Adv S. Pule