- The Financial Services Tribunal has set aside a ruling that ordered the Municipal Employees' Pension Fund to pay a withdrawal benefit under the two-pot system.
- The complainant, Khutso Mailula, had not contributed to the fund since joining Polokwane Municipality in 2018, leading to R553 675.31 in arrears.
- Tribunal found the Adjudicator failed to consider binding fund rules that restrict benefits when contributions are unpaid.
Khutso Yuwray Mailula thought the new two-pot retirement system would finally let her access part of her pension savings.
She had resigned from Ba-Phalaborwa Municipality in 2018 and joined Polokwane Municipality, which was also part of the same pension fund. However, for seven years, no contributions were made on her behalf.
When she tried to withdraw from her savings pot in 2024, the Municipal Employees' Pension Fund refused. She turned to the Pension Funds Adjudicator, who ruled in her favor and ordered the Fund to process her withdrawal and provide a breakdown of the accessible amount.
But the Fund pushed back, arguing that Mailula’s contributions were in arrears and that the Adjudicator had ignored its binding rules. On 23 October 2025, the Financial Services Tribunal agreed.
Tribunal: Ultra vires and null
The Tribunal’s decision was clear. “Payment as per the complainant’s request will be contrary to the provisions of rule 27(2)(b),” wrote Chairperson MF Legodi. “By so doing, it undermines the binding effect thereof in terms of section 13 of the Pension Funds Act. This will be ultra vires.”
The Fund had warned both Mailula and Polokwane Municipality back in 2018 that failure to pay contributions would affect their benefits. By March 2025, the arrears had grown to over half a million rand.
The Tribunal found that the Adjudicator had relied on general provisions about savings withdrawals under the two-pot system but failed to consider the Fund’s specific rules. In particular, rule 27(2)(b) limits benefits when contributions are unpaid.
Not just a technicality
The Tribunal also criticised the Adjudicator’s use of case law. A reference to the Constitutional Court’s Mongwaketse ruling was dismissed as irrelevant. That case dealt with contract workers who were never eligible for membership, not members in arrears.
“The facts in the case above have no relevance to the facts of the present case,” the Tribunal stated.
Instead of enforcing the Adjudicator’s order, the Tribunal sent the matter back for reconsideration. Mailula’s hopes of accessing her savings pot now depend on whether the Municipality settles the outstanding contributions or whether the Fund’s rules allow any flexibility.
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