As a member of a retirement fund you do not have a right to any free shares acquired by the fund through the demutualisation of Sanlam or Old Mutual.
This is the ruling from the office of the Registrar of Pension Funds, in Pretoria, in terms of the Pension Funds Act.
Dube Tshidi, of the registrar's office, says only pensioners who are already receiving a benefit from the fund, not active members, could be entitled to part of the demutualisation windfall.
Members of some funds have been pressurising their administrators to cash in their funds' free share allocation and pay out money to members. But this is not possible, Tshidi says: the free shares belong to the fund, not to individual members.
"Members only become entitled to a benefit when they leave employment."
Sanlam handed out 514 million free shares worth more than R3 billion to retirement funds on demutualisation, and Old Mutual 680 million shares worth R7,6 billion at listing.
These shares, Tshidi says, increase the value of the fund's investments and the trustees must decide what to do with this extra value. Provided the rules of the retirement fund allow it, they can use the money to improve benefits, reduce contributions or subsidise future costs.
What they cannot do is pass on the shares to active members of the fund, or pay them cash in place of shares, or reduce housing loans made by the fund to the members or, for that matter, to the employer. But the trustees can, if the rules allow it, use some of the money for pensioners and former members.
If you are in one of the following categories, you may have a claim on the money, provided the rules of the fund allow it:
* If you are a pensioner;
* If you have resigned or been retrenched, provided there is money owing to you in the fund;
* If you have already been paid a benefit by the fund; or
* If you have transferred to another fund in this case, the money can be paid across.
"People who have left the fund, through resignation or retrenchment, say, do not have a claim on the money from free shares unless there is money in the fund due to them, for instance, if there is a surplus, some of which is due to former members."
Tshidi says he is concerned that some trustees have already allowed active members to benefit from the free shares outside the fund.
"Those trustees have not exercised their fiduciary duty correctly and steps must and will be taken to rectify the matter."