Retirement Age in South Africa

Retirement age in South Africa‟ means from the age of 55 years (early retirement), through 60 years (normal retirement), to 65 years.So the official retirement age is from age 55 to age 65.

Below we analyze what the law says about retirement age and pension in South Africa.

“19 Age of retirement

Subject to the provisions of this Law, a member shall have the right to retire on pension and shall be so retired on reaching the age determined by the law governing his or her employment:

Proclamation 21 published in government Gazette 17135 of 19 April 1996.

Provided that where such a law does not determine such retirement age, a member-

The Pension Law also contains the following definition:

“„pension-retirement date‟, the earliest date on which a member is entitled to retire in terms of section 19 of the Law with normal retirement benefits, i.e. without application of an early retirement adjustment factor as envisaged in rule 14.3.3 (b): Provided that for the purpose of section 19 (b) of the law it shall be the date when such a member attains the age of 60 years;…”

On 27 May 2008 the respondent‟s Legislature Service Board resolved inter alia that “all employees should go on normal pension when reaching the age of 60 as this was in line with the Government Pensions Fund of which all employees of the legislature were contributing to.”
Until 5 August 1998, when the Northern Province Legislature Act, 3 of 1997 („the NPLA‟) commenced operating, the respondent regulated its employees conditions of employment in terms of the Public Service Act of 1995 as amended.

(1)(d)(ii) of the same Act to determine the conditions of retirement and the retention of services of employees. Accordingly, when the Service Board decided in its meeting of 27 May 2008 that all employees should go on normal pension when reaching the age of 60 as this was in line with the government pension fund which all employees of the legislature were contributing to, that decision simply confirmed that the normal retirement age was 60.

“19 Age of retirement

Subject to the provisions of this law, a member shall have the right to retire on pension and shall be so retired on reaching the age determined by the law governing his or her employment: Provided that where such a law does not determine such a retirement age, a member-

who was a member of the fund on the fixed date shall have the right to retire on pension and shall be so retired on reaching the retirement age provided for in any other law which applied to him or her on the date preceding the fixed date; or
who became a member of the fund after the fixed date shall have the right to retire and shall be so retired on reaching the retirement age determined in the rules.”

The respondent relies on the portion of this provision before the proviso. In other words, in terms of the Pension Law the right to retire on pension and the date on which such a person may be retired, in this case, is determined by the Conditions of Service Policy.

On the other hand, the respondent also sought to rely on the definition of

„pension-retirement date‟ in the Pension Law, which states:

“pension-retirement date‟, the earliest date on which a member is entitled to retire in terms of section 19 of the Law with normal retirement benefits,i.e without application of an early retirement adjustment factor as envisaged in rule 14.3.3 (b): Provided that for the purpose of section 19(b) of the Law, it shall be the date when such member reaches the age of 60 years;…”

In its written heads, the respondent contends that it was common cause that the resolution of 28 May 2008 brought the normal retirement age into line with s 19(b) of the Pension Law, namely 60 years. It maintains that if the applicants wanted to challenge the position after 28 May 2008, they should have sought to review the empowering legislation or the decision itself.

The respondent also maintains that the facts of this matter are on all fours with the LAC decision in SA Metal & Machinery Co (Pty) Ltd v Gamaroff. ²
In its written heads, the respondent argued that because the applicants had agreed that the respondent had terminated their services „because they reached the normal retirement age of 60‟, they had therefore abandoned their claims in their statement of case that the respondent had simply terminated their services because they were over 60, whereas the compulsory retirement age was 65 and that their termination constituted unfair discrimination based on age. However, this was plainly not a concession but simply a statement of the respondent‟s reason for terminating their services. One only has to have regard to the facts in dispute in the pre-trial minute to see that this was not the case and the respondent‟s argument on this point rips the statement out of the context of the rest of the minute.

By contrast, in this case, the applicants argue that the Conditions of Service Policy determined the definition of a normal retirement age and retirement is only obligatory at age 65. The applicants also sought to draw an analogy with the Rubin case in which the employer had unilaterally decided on a retirement age, by arguing that the decision of the Board could not suddenly make 60 the compulsory retirement age. This was no different to what the employer did in Rubin‟s case, and accordingly the resolution could not be considered to have changed anything.

Conditions of Service Policy has the effect of making the Service Board‟s resolution dispositive of the normal retirement age because no dispute about the interpretation had been referred to it in terms of clause 1.3.Further, the applicants contend that even if the board could determine the retirement age in terms of section 8 (1)(d)(ii) it could not do so with retrospective effect.

In Gamaroff‟s case the court found that there was a normal retirement age based on the rules of the Provident fund. Likewise, the applicants submitted in this matter the retirement age was common cause. The

judgement in Cash Paymaster Services (Pty) Ltd v Browne ⁶ was distinguishable from this matter because in that case there was an agreed retirement age.

The rules of the Provident fund in Gamaroff‟s case stated:

“4.2.1 A Member may retire at any time after having attained the early retirement age specified in the Special Rules, provided that he may not retire prior to age 55 years. A Member who is dismissed from Service after having attained the specified age may also proceed on retirement if the participating Employer regards such dismissal as early retirement.

4.2.2 A Member who has not retired in terms of Rule 4.2.1 must retire on reaching his Normal Retirement Age unless his Employer agrees to his remaining in Service after that date.

4.2.3 The Trustee, upon receipt of notification from the Employer that a Member has become totally and permanently incapable of efficiently carrying out his duties, shall agree to such Member’s retirement at any time before he reaches Normal Retirement Date.

4.2.4 A Member who is allowed to remain in Service after his Normal Retirement Age shall retire at a date not later than the last day of the month in which he attains the age of 70 years, subject to the agreement of his Employer.”⁷

In that matter, the rules of the fund also specifically stipulated a normal retirement age of 65.⁸

Evaluation

The application of the Pension Law

The two provisions relied on by the respondent to assert that the resolution of 28 May 2008, merely affirmed the normal retirement age in the Pension Law have been mentioned already. For convenience, they are repeated below:

“19 Age of retirement

Subject to the provisions of this Law, a member shall have the right to retire on pension and shall be so retired on reaching the age determined by the law governing his or her employment: Provided that where such a law does not determine such retirement age, a member-

(a) …

(b)…”

and

What remains relevant is that the „pension-retirement date‟ is defined as the earliest date on which someone can retire on normal retirement benefits, without having to take early retirement. That date is not a compulsory retirement date but the date on which a person is eligible for retirement.

The retirement ages in the Conditions of Service

The definition which applied prior to the resolution is unambiguous, viz:

“ „Retirement age‟ means from the age of 55 years (early retirement), through 60 years (normal retirement), to 65 years

(compulsory retirement).”

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