- No. 7 Disa Road, Extension 8, Kempton Park
- pension@mepf.co.za
- +27 11 578 5333
By MEPF
MEPF Newsletter Issue 4
Dear Member,
Welcome to the fourth edition of the MEPF Newsletter!
In this issue, we will cover several important topics to keep you fully informed and empowered about your Fund and your future.
You will find:
- Updates and clarifications on the Hybrid Fund structure
- All You Need to Know About Divorce and Your Retirement Fund
- Guidance for Members Nearing Retirement
- A detailed explanation of your retirement and ill-health benefits
- Two-Pot Calculations for Defined Benefit Category
- Insights into our audit process and benefit statements
- Contact details for your Stakeholder Relations Officers
The Story Behind MEPF Becoming a Hybrid Fund
On 1 August 2012, the MEPF began its transition from a purely Defined Benefit (DB) Fund to a Hybrid Fund combining both Defined Benefit (DB) and Defined Contributions (DC) categories. The Defined Contributions (DC) category was officially introduced in 2012 and implemented in late 2013. This significant transformation was not sudden; it was the result of careful consultations, in line with the Pension Funds Act, and a collective decision by all stakeholders, including members, unions, employers, and trustees.
The change was motivated by recommendations from the Joint Forum, first published in the Government Gazette in 2007. The pension fund landscape needed to adapt to remain financially sustainable and equitable for future generations. Rising salary bills, increased life expectancy, and economic shifts required a balanced approach to safeguard both employer and member interests.
By adopting the Hybrid structure, MEPF ensured that members continue to benefit from the security of a guaranteed pension for life (DB), where the employer bears the risk, while embracing the flexibility and portability of the DC model, where the member bears the risk. It was — and remains — a progressive solution that keeps your retirement secure, relevant, and sustainable.
All You Need to Know About Divorce and Your Retirement Fund
- For Defined Benefit fund members: Divorce can significantly reduce your retirement benefit as well as years of service. When a divorce claim is processed and a portion of your pension is paid to your ex-spouse, both your benefit amount and pensionable service are reduced. As a result, the amount you receive at retirement will be lower.
- For Defined Contributions fund members: Divorce reduces your fund value. The reduction is immediate and directly affects your retirement savings, leaving you with less available at retirement.
- No time limit for ex-spouses to claim: There is no legal time limit for an ex-spouse to submit a court order to the Fund to claim their share of the pension. For example, if the divorce happened many years ago, an ex-spouse could still claim if they have a valid court order.
- Late Discovery: No time limit also applies even if the ex-spouse only realizes years after divorce that you are a member of a pension fund- they can still claim their share with a valid court order.
- The Fund must comply with court orders: When the Fund receives a valid divorce order, it is legally required to pay the specified portion to the ex-spouse. The Fund does not need to notify the member before processing the claim.
- Seek professional advice: Divorce and pension law can be complex. Members are strongly advised to seek expert legal or financial advice to understand their rights and obligations.
Clarity on Spouses & Marriage Registration
Under South African law, a spouse’s right to benefits is determined by valid marriage status. We remind members that it is crucial to register your marriage with the Department of Home Affairs and provide us with an updated copy of your marriage certificate.
Failure to do so can delay benefit payouts or result in legal disputes among dependents. Protect your loved ones — update your records while you are still able to do so.
Two Pot Calculations (Defined Benefit category)
The Two-Pot Retirement System, effective from September 1, 2024, allows members to access a portion of their retirement savings before retirement, while preserving the remainder for retirement benefits. Under this system, retirement contributions are split into two components: a Savings pot (accessible before retirement) and a Retirement pot (preserved until retirement).
For Defined Benefit (DB) funds, withdrawals from the Savings pot result in a reduction of pensionable service years. The value of the Savings component is not directly linked to contributions made, but is instead calculated using the following factors:
- The period of service accumulated within the Savings component.
- The average pensionable salary over the most recent 36 months, and
- An actuarial factor, which is age-dependent and reflects the remaining term to retirement.
Example Calculation
Suppose Lebo Molemane (age 40, earning R550 000 per annum) and Godfrey Baloyi (age 57, earning R300 000 per annum) are both DB members who wish to withdraw from the Savings pot after 6 months of contributions. The calculations are as follows:
| Pension Number | Lebo Molemane | Godfrey Baloyi |
|---|---|---|
| Average Salary | R550 000 | R300 000 |
| Years of Service (months) | 2 (6/3) | 2 (6/3) |
| Age | 40 | 57 |
| Actuarial Factor | 11,10% | 25,52% |
| Savings Value | R10 172.07 | R12 758.28 |
As shown, the actuarial factor increases with age. Although Lebo Molemane has a higher average salary, Godfrey Baloyi, being closer to retirement, has a higher actuarial factor. This results in a higher savings value for the older member. This approach reflects a key principle of DB fund structures: members closer to retirement have higher actuarial factors because fewer withdrawals from the Savings component are expected, thus providing greater benefit as retirement approaches. This also helps preserve more benefits for younger members until they retire. As a Defined Benefit member, your pension is designed to provide for you throughout your lifetime. These actuarial calculations are in place to protect your future income and ensure that the Fund can honor its guarantees.
Understanding Your Ill-Health Benefit
MEPF provides clear, structured ill health benefits under both DB and DC categories:
DB Fund:
- Less than 10 years of service: You receive a Gratuity (lump sum) equal to three times your annual salary only.
- 10 years of service or more: You receive a Gratuity (lump sum) of three times your annual salary PLUS a guaranteed monthly pension for life (this pension will not carry on to any other party).
- Important: MEPF does not cover dread disease or temporary disability under the DB benefit.
DC Fund:
- Members receive their full accumulated fund credit, which reflects personal contributions, employer contributions, and investment returns PLUS 4 times their annual salary.
- Important: MEPF does not cover dread disease or temporary disability under the DC benefit.
Please ensure you fully understand these benefits and speak to your HR officer or our Stakeholder Relations team if you need assistance.
Nearing Retirement? Talk to Us!
According to the rules of the Fund, early retirement is permitted from the age of 55, while normal retirement age is from 65 years old. It is important to start planning well in advance to ensure a smooth transition and to make the most of your retirement benefits.
Members aged 54: Please get in touch with the Fund as you start to prepare for retirement. Early engagement helps you understand your options and plan ahead.
Members aged 55–65: It is crucial that you speak to us. We urge you to attend our Pre-Retirement Counselling Sessions to fully understand your retirement benefits, processes, and choices. These sessions provide valuable guidance to help you make informed decisions.
MEPF Retirement Benefits:
- DB Members: Receive a guaranteed monthly pension for life. According to the Fund rules, if you have served more than 10 years, you receive a gratuity lump sum plus a lifelong monthly pension. If you have less than 10 years of service (including if reduced due to divorce settlement or partial withdrawal, such as Two-Pot withdrawal), you will only receive a lump sum and not a monthly pension for life. Only DB members with 10 years or more of service are eligible for a lifelong monthly pension.
- DC Members: Your benefit is based on your accumulated contributions plus employer contributions plus investment growth. 1/3 will be paid to the member as a lump sum, and 2/3 will be paid to a registered FSP of your choice to purchase an annuity.
- All MEPF DB Pensioners receive a 13th cheque every November without fail, plus annual pension increases linked to Fund performance – a rare benefit that sets MEPF apart.
- Spouse’s Pension: MEPF is proud to offer a continued pension to your registered spouse for DB Members after your passing – providing lasting security for your family.
Audit Process & Benefit Statements
As part of our commitment to transparency and good governance, our annual audit cycle began on 01 March 2025 and will run for up to six months. This process is essential to ensure the integrity and accuracy of the Fund’s financial records.
We thank you for your patience and understanding while we complete this important process. Once the audit is finalised, your 2025 Benefit Statements will be made available, providing you with a clear and comprehensive snapshot of your retirement position.
TESTIMONIALS
Below is what MEPF members had to say about the Fund as well as the services they have received from the MEPF:
“I have been a member of Municipal Employees Pension Fund administered by Akani since 2004, and over the years, I’ve come to truly value the stability,
professionalism, and reliability they provide. Throughout various life stages and changes in the economic climate, the fund has remained consistent in its
communication, support, and performance.
Knowing that my retirement savings are being managed with such diligence gives me real peace of mind. I appreciate their transparency, user-friendly services,
and the ease with which I can access information about my fund when needed. Its reassuring to be part of an organisation that genuinely prioritises the long- term financial well-being of its members.
I look forward to continuing this relationship and feel confident about my future, thanks to the foundation they’ve helped me build over the past two decades.”
-Delisiwe AN Ndwandwe. Uphongolo Local Municipality
“I am very happy with the way the pension fund has and is treating me since I
retired. Ever since I went on retirement, I have never encountered any challenges with receiving my monthly pension. My payments are always on time, without fail, and this has made a big difference in my life as a pensioner. The pension I receive allows me to live comfortably and continue to take care of my needs. I am able to support my family with the amount I receive. I am currently living in my
hometown, where I built a beautiful house for myself and my family with the money from the pension fund. I am truly grateful to be a member of the MEPF.”
–Bakiti George Hlagala
City of Tshwane Metropolitan Municipality
“Good day,
I would like to thank your Marketing and Stakeholder Relations Officer and the team for your good service. Payment was received and commitments handled accordingly. Thank you so much what a relief. Please help others with the same kindness you expressed to me.
Thank you dearly.
Box full of blessings to you.”
-Phina Mashishi
City of Tshwane Local Municipality
Our Sincere Appreciation
To our valued Members, HR officials, Municipal Managers, and all stakeholders— thank you for your unwavering support and trust in MEPF.
We remain committed to delivering the highest standards of service, robust member support, and, above all, protecting your interests.
Together, we secure your tomorrow.
Our Stakeholder Relations Officers are always ready to assist you.
Contact Numbers:
- Lebo Molemane: 066 020 8535 (North-West, Mpumalanga, Gauteng)
- Gudani Mufhadi: 072 352 7144 (Free-State, Limpopo, Mpumalanga, North-West)
- Thulani Mthombeni: 082 585 5931 (Gauteng, KZN, Northern Cape, Eastern Cape)
- Wisani Shiviti: 072 352 6894 (Limpopo, Mpumalanga, Gauteng)
Regards,
Municipal Employees Pension Fund
Your Number 1 Pension Fund
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The Fund is administered by Akani Retirement Fund Administrators (Pty) Ltd.
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