Page | 1
IN THE HIGH COURT OF LESOTHO
HELD AT MASERU CIV/APN/385/2019
In the matter between:
MAFETA MONETHI APPLICANT
and
CHAIRPERSON, BENEFITS 1st RESPONDENT
ADMINISTRATION COMMITTEE
BOARD OF TRUSTEES OF THE 2nd RESPONDENT
PUBLIC OFFICERS DEFINED
CONTRIBUTION PENSION FUND
PUBLIC OFFICERS’ DEFINED 3rd RESPONDENT
CONTRIBUTION PENSION FUND
Page | 2
Neutral citation : Mafeta Monethi v Chairperson, Benefits Administration Committee and 2 Others [2019] LSHC Civ 158 (04 September 2024)
CORAM : KHABO J.,
HEARD : 15 AUGUST 2022
DELIVERED : 04 SEPTEMBER 2024
SUMMARY
Remuneration and benefits - Computation of public officer’s pension benefits - Pensions Proclamation, 1964 versus the Public Officers’ Defined Contribution Fund Act, 2008 - Applicant’s pension regulated by the Proclamation upon his appointment in the public service and subsequently by the Public Officers’ Defined Contribution Pension Fund on the ushering in of the Public Officers’ Defined Contribution Fund Act, 2008 - Upon his retirement his pension benefits were computed according to the Proclamation - Applicant challenging this on the basis that his pension benefits ought to have been assessed in terms of the Act and not the Proclamation - aggrieved by the Fund’s decision, he is before court to seek the review of this decision - Court discerns no irregularity.
Page | 3
ANNOTATIONS
Statutes and subsidiary legislation
Constitution of Lesotho, 1993
Defence Force (Regular Force) (Officers) Regulations, 1998
Pensions (Amendment) Regulations, 2011
Pensions Proclamation, 1964
Public Officers’ Defined Contribution Fund Act, 2008
Public Officers’ Defined Contribution Pension Fund Rules, 2010
Cases cited
Lesotho
Bulane Andrew Sechele v Public Officers’ Defined Contribution Pension Benefit Fund and 9 Others C of A (CIV) No. 43B /10
South Africa
Pillay v Krishna and Another 1946 AD 946
Page | 4
JUDGMENT
KHABO J.,
Introduction
[1] This is an application for the review of computation of Applicant’s pension benefits. The Applicant was a public officer engaged by the Ministry of Health as a Nursing Officer. On appointment on 05th October 1994, he became subject to the Government’s non - contributory pension scheme regulated by the Pensions Proclamation, 19641 (the Proclamation).
[2] In 2008, a contributory Public Officers’ Contribution Pension Fund (the Fund), 3rd Respondent herein, was established under the Public Officers’ Defined Contribution Fund Act, 20082 (the Act). The Applicant avers that he was transferred from the previous pension scheme to the Public Officers’
1 No. 4 of 1964
2 Act No. 8 of 2008
Page | 5
Defined Contribution Pension Fund (the Fund) on 01st November 2008, but only commenced his contributions on 30th October 2013 until 31st March 2014 when he retired from his service.
[3] He states that upon retirement he received his terminal benefits but was dissatisfied with the computation thereof. His main complaint was that it was irregular for the Fund to have calculated his benefits under the Pensions Proclamation, and not in terms of the Act. Aggrieved, he unsuccessfully laid a complaint with the Fund’s Board of Trustees, 2nd Respondent herein. He is before this court to seek the review of the Board’s findings.
Reliefs sought by the Applicant
[4] He is seeking the following reliefs:
(a)
Review and setting aside of the decision of the 1st and 2nd Respondents as irregular, illegal and unlawful;
Page | 6
(b)
Declaring the 3rd Respondent’s assessment and computation of Applicant’s lump sum cash benefit and monthly pension (annuity) as contrary to the Public Officers’ Defined Contribution Pension Fund Act and the Public Officers’ Defined Contribution Pension Fund Rules;
(c)
Directing the 1st and 2nd Respondents to correctly assess and compute Applicant’s lump sum cash benefit and annuity on the correct position of the law as prescribed in the Public Officers’ Defined Contribution Pension Fund Act and the Public Officers’ Defined Contribution Pension Fund Rules;
(d)
Directing the 1st and the 2nd Respondents to correctly assess and compute the Applicant’s lump sum cash benefit and annuity on the correct position of the law as prescribed in the Public Officers’ Defined Contribution Pension Fund Act;
(e)
Further and/or alternative relief this Honourable Court deems fit; and
(f)
Costs of this application against the Respondents.
Page | 7
Applicant’s eligibility to the Fund
[5] The Fund was established for the purpose of providing pension benefits to the following categories of public officers reflected in Section 5 (1) and (2) of the Act:
5 (1) A public officer or a person, as the case may be, who -
(a)
is employed on permanent and pensionable terms and is aged 40 years or below at the commencement of this Act; or
(b)
joins the public service, after the commencement of this Act, on permanent and pensionable terms 10 years or more prior to attaining the prescribed compulsory retirement age as set out in the relevant laws governing the retirement of public officers, is a member of the Fund, and membership is mandatory;
(2) A public officer who at the commencement of this Act, is employed on permanent and pensionable terms may, subject to subsection (3), become a member if he or she has at least 10 further years of service prior to attaining the prescribed retirement age as set out in the relevant laws governing the retirement of public officers.
Page | 8
Hence, the Applicant became a member of the Fund in terms of Section 5 (1) (a) of the Act by virtue of having been thirty - nine (39) years of age when it was established in 2008.
The issue for determination
[6] At the heart of this dispute is a prayer for the review of Respondent’s decision to assess Applicant’s pension benefits under the Pensions Proclamation with the Applicant insisting that it ought to be in terms of the new law, the Act. He argues that the Respondent excluded his past service benefit, the ‘opening transfer credit,’ in the computation of his pension benefit, thereby, committing a reviewable irregularity. The ‘opening transfer credit’ is defined as “… the amount transferred from the previous fund in respect of a member in terms of any past service liability at commencement of membership of the Fund in terms of Section 5 of the Act.”3
3 Rule 2 - Interpretation Section of the Public Officers’ Defined Contribution Pension Fund Rules, 2010
Page | 9
[7] That the Applicant’s service has been subjected to two regimes, namely, Pensions Proclamation and the Act is indisputable. Reference to both laws is, therefore, inevitable. Rule 24.1 provides that on retirement, a benefit based on a member’s ‘ fund credit’ and his or her past service liability becomes payable. The question then becomes: what comprised Applicant’s ‘fund credit?’
[8] A member’s ‘fund credit’ is made up of:4 (to the extent relevant to this case):
(a)
his contributions made to the Fund; and
(b)
the employer contributions in respect of the Member, which are specified in Schedule 1; and
(c)
…
(d)
any other amount transferred into the Fund from a previous fund or an approved fund in terms of Rule 29.
4 ibid
Page | 10
together with interest.
[9] Operationalising (d) above, Rule 29.1 provides that:
If a Member was a member of a Previous Fund, the Fund shall receive such amount as becomes payable to the Fund by the Previous Fund as the result of the transfer of such member to the Fund. Such amount shall be applied under the Member’s Fund Credit.
[10] It is Applicant’s case that the Fund failed to ‘apply’ his ‘previous fund’ when computing his terminal benefits. He argues, in essence, that funds that were transferred to the Fund (‘past service benefit,’) were excluded in the said computation. If this occurred, it would indeed be a violation of the provisions of the law. But did it?
Computing public officers’ pension benefits
[11] Section 27 of the Act describes what’s payable to a member upon retirement and provides that:
Page | 11
on retirement a member shall be entitled to a portion of his or her fund credit to the maximum of 25% as a cash benefit. The remaining percentage shall be used to purchase an annuity for him or her.
[12] The pension payable under the Proclamation is as prescribed in the Pensions (Amendment) Regulations, 2011.5 The Regulations were amended “to increase the pension benefits for those officers who do not qualify for pension benefits under the Public Officers’ Defined Contribution Pension Fund Act, 2008.”6 They provide in Regulation 4 that:
Subject to the provisions of the Proclamation and of these regulations every public officer holding a pensionable office … in [the] public service … for ten years or more may be granted on his retirement a pension at the rate of one - five hundred and fortieth [1/540] of his pensionable emoluments in respect of each completed month of pensionable service.
[13] The Applicant complains that the Fund not only resorted to a wrong regime, the Proclamation, but also applied a repealed
5 Legal Notice No. 141 of 2011
6 Explanatory Note to the Pensions (Amendment) Regulations, 2011
Page | 12
formula, 1/600 as opposed to the 1/540 formula in the amended Regulations).
[14] In reaction, Respondents contend that they acted within the four corners of the law. It is their case that the Fund compared the two formulae provided in the Proclamation and the Act and used one that paid the Applicant an amount they found more favourable. Respondents’ Counsel intimates that the Fund was fortified in this approach by the decision of the apex court in Bulane Andrew Sechele v Public Officers’ Defined Contribution Pension Benefit Fund and 9 Others.7 Applicant’s Counsel is opposed to this comparison and argues that Respondents misconstrued Sechele.
[15] The Applicant in Sechele challenged the constitutionality of his compulsory membership to the Fund. The court also had to interrogate whether he should be paid under the Proclamation or the Defence Force (Regular Force) (Officers) Regulations.8 In arriving at its decision it added the following words at the end of Section 27 of the Act in
7 C of A (CIV) No. 43B /10
8 No. 26 of 1998
Page | 13
line with Section 150 of the Constitution of Lesotho, 1993 (the Constitution) 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.
[16] Section 150 (1) of the Constitution provides that:
The law to be applied with respect to any pensions benefits that were granted to any person before the coming into operation of this Constitution shall be the law in force at the date on which those benefits were granted or any law in force at a later date that is not less favourable to that person.
The court appears to have underscored the consideration of ‘prejudice’ in its finding.
[17] The Applicant avers in his founding affidavit that dissatisfied with his pension benefits, he exchanged several letters with the Fund, culminating in an appeal to the Board of Trustees of the Public Officers’ Defined Contribution Pension Fund, 2nd
Page | 14
Respondent herein, which he lost. The judgment of the (Benefits Administration Committee) Arbitral Tribunal is attached as annexure ‘E.’ It is trite that ‘he who alleges must prove.’ The court put the principle succinctly in Pillay v Krishna and Another9 that the incidence of the burden of proof denotes a “duty which is cast on a particular litigant, in order to be successful, of finally satisfying the court, that he is entitled to succeed on his claim, or defence, as the case may be…” In casu, the onus lies with the Applicant to prove that the Fund misdirected itself by resorting to a wrong law, resulting in the committal of a reviewable irregularity.
[18] Naturally, in ascertaining which formula ensured that a member is not made worse off as stated in Sechele had no option but to compare the two formulae under the Proclamation and the Act. It was a question of ‘either or.’
[19] The court observes that this is a specialist area which appears very intricate. It also takes judicial notice that the arithmetic analysis involved in computation of issues such as what the
9 1946 AD 946 at pp. 952 - 953
Page | 15
Applicant is complaining about is normally handled by actuaries. Unfortunately, the Applicant does not provide his own computation, which would have perhaps given the court a better basis for interrogation.
[20] Be that as it may, a glimpse of annexure ‘C’ or ‘MM 9’ attached to Applicant’s founding affidavit reveals that the computation of his benefits included his past service benefit of Eight Hundred and Ninety-Three Thousand, Nine Hundred and Fifty - Four Maloti, Ninety - Two Cents (M893 954.92). The court also notes that the Applicant only started contributing to the Fund from 30th October 2013 to 31st March 2014 when he retired, which is a very short period with the Fund.
Conclusion
[21] The court finds the Respondents to have acted within the ambit of the law regulating pensions and that Applicant’s ‘past service benefit’ has been included. Just by the way, the court recommends to the 3rd Respondent to sit down with the
Page | 16
Applicant, if he so wishes, and explain to him this rather intricate process.
ORDER
[22] In the result, the court makes the following order:
The application for review is dismissed with costs.
________________
F.M. KHABO
JUDGE
For the Applicant : Adv., S.T. Maqakachane assisted by Adv., K. Nyabela
For the Respondents : Adv., R. Cronje assisted by Adv., S. Pule