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n SA Mercantile Law Journal = SA Tydskrif vir Handelsreg - 'You break, you pay' : pension benefits deductions for damage caused to the employer by the employee : analysis

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Abstract

Several provisions of the Pension Funds Act 24 of 1956 (PFA) protect pension benefits. Thus section 37A prohibits the reduction, transfer, cession, pledge, hypothecation, and attachment of benefits or the right to benefits, except to the extent permitted by the PFA itself, the Income Tax Act 58 of 1962, and the Maintenance Act 99 of 1998. Once a benefit is paid out, it no longer has the status of a benefit (see [2001] 4 BPLR 1825 (PFA) para 15) and loses the protection provided by section 37A (see 2006 (6) SA 304 (SCA)). Furthermore, section 37B of the PFA protects pension benefits against creditors where the member becomes insolvent; while section 37C protects pension benefits by stating that they do not form part of the estate of the deceased member (see 2003 (1) SA 629 (W) 632H-J). The reason behind this protection is that pension benefits should be used to provide benefits for members on their retirement and for dependants on the member's death. Section 37C serves a social function because it relieves the state of the burden of providing social security to its citizens (see Lisa Shrosbree 'To what extent does section 37D of the Pension Funds Act protect employers from dishonest conduct by their employees?' (2005) 26 17 at 24). A benefit is defined by section 1 of the PFA as 'any amount payable to a member or beneficiary in terms of the rules of [the] fund' (see also 2009 (5) SA 366 (SCA) paras 22-3).

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/content/ju_samlj/25/4/EJC154336
2013-01-01
2016-12-06
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