Employers will not be able to snatch the billions of rands lying in surplus in retirement funds from your pocket - they will have to negotiating a fair deal with you.
That's the message which John Murphy, the Pension Funds Adjudicator, is sending to members of retirement funds in his latest ruling on one of the major current issues between employers and employees.
In a complex 48 page ruling on a dispute between a group of pensioners and the South African Petroleum Refineries Pension Fund (Sapref) over the distribution of a surplus in the fund, Murphy has sent the two parties back to the table to talk.
Employers, he says, claim that surpluses should be used for contribution holidays or even refunds, arguing that all surplus in a defined contribution fund is because employers have paid in too much. Members see things differently: they see any contribution holiday by the employer as cutting down their pensions.
So who does "own" the surplus?
The question is badly posed, says Murphy, because until a pension fund is wound up, any surplus in the fund is not a collection of assets but merely an actuarial opinion.
Whether or not a surplus exists depends on how conservative the actuaries have been in the assumptions they use to determine whether the fund can meet its future liabilities or not.
This is why Murphy says arguments will best be resolved by negotiation.
"You wouldn't go to a judge for a wage increase, except in exceptional circumstances. Wage increases are the result of negotiation and this is the same. Rather than rule on who is entitled to what, I will compel the parties to negotiate."
Murphy says he will also ensure that everyone has enough power to negotiate.
"If I conclude that there is manifest injustice because one party has no bargaining power, there may be justification for intervention by the adjudicator."
In the Sapref case, which is a closed fund with only 20 members and 300 pensioners, Murphy has called on the employer to show why it is entitled to a contribution holiday of R4,9 million from the fund. He has asked the actuaries to provide information on the source of the fund's R192 million surplus, but he does not really expect this to settle the question of how it should be distributed. In the end, he says, the issue must be resolved through negotiation.
The courts and the adjudicator, says Murphy, must simply be the guardians of the negotiation process.
Meanwhile, Murphy has blocked the employer's attempt to save another R5,4 million by passing on the costs of administering the fund onto the fund itself.
Though he thinks the employer probably will be able to justify a contribution holiday of about R10 million from the fund's surplus of more than R190 million, he has not approved the way this was done, which was through a unilateral amendment to the rules of the retirement fund, cancelling the employer's obligation to pay administration expenses.
Murphy has set aside the amendment, which he considers was intended to give the employer unilateral access to the surplus.
And he has warned that he will not hesitate to strike down unjust rules or amendments to rules even if they have been registered by the Registrar of Pensions.