MUNICIPAL RETIREMENT ORGANISATION CONSTITUTION

MUNICIPAL RETIREMENT ORGANISATION CONSTITUTION Definitions 1. (1) In this Constitution, unless the context indicates otherwise: Name Act means the Pension Funds Act 24 of 1956 or any legislation enacted to replace it; Exco means the Executive Committee established in terms of Clause 18; Member means a member contemplated in Clause 9; Organisation means the Municipal Retirement Organisation established in terms of this Constitution and referred to herein as the MRO; Pensioner organisation means any organisation of pensioners who are members of a Retirement fund, which organisation is governed by a constitution adopted at a general meeting of such organisation; Retirement fund means any pension fund in the municipal sector which is registered in terms of the Act; Trade union means any trade union operating in the municipal sector which is registered in terms of the Labour Relations Act 66 of 1995 or any legislation enacted to replace Act 66 of 1995 and includes a trade union confederation/federation to which a trade union is affiliated. (2) In the interpretation of this Constitution the male gender shall include the female gender and the singular shall include the plural. 2. The name of the association shall be the Municipal Retirement Organisation abbreviated as MRO. Status 3. The MRO is a non-political, non-profit voluntary association with perpetual succession and which:

2 Objects (1) exists separately from its Members; and (2) has the capacity and powers set out in Clause 6. 4. The objects of the MRO are to: (1) promote, advance and protect the interests of the municipal retirement fund sector as well as their trustees, members, pensioners and persons associated with such funds and to discuss matters of mutual interest; (2) have dialogue with, make representations to and consult with- organs of state in the national, provincial and local spheres of government; trade unions represented on the South African Local Government Bargaining Council (SALGBC) or any of its divisions as well as any other duly registered trade union of which local government employees are members; (c) employer organisations represented on the SALGBC or any of its divisions; or any person, group of persons or legal entity regarding any matter affecting municipal retirement fund matters and/or the interests, rights and benefits of employees or pensioners; (3) use the combined power and influence represented on the MRO to lobby for or against matters affecting Members; (4) make representations to and/or consult with the SALGBC on all matters affecting the municipal retirement sector and the status of Members in general; (5) comment or make representations on or take such other action as may be necessary in regard to particular matters which may affect municipal retirement funds and/or the interests of employees or pensioners and without derogating from the generality of the foregoing, with specific reference to amendments to all relevant legislation and any Bargaining Council Agreements relating to pension fund matters; or any other existing or draft legislation being considered, or to be considered.

3 Principles (6) comment on and make representations with regard to any official report, media report or any published document which may have a bearing on the retirement fund industry in general or the municipal retirement fund sector in particular; (7) establish and maintain regular liaison with other retirement industry bodies, associations or entities, including the Registrar of Pension Funds and the Financial Services Board, to ensure a continuous flow of information to and from the MRO; (8) promote the image and credibility of the municipal retirement fund sector by being transparent in all the activities of the MRO; (9) encourage the co-operation and commitment of Members to ensure a constant flow of information within the MRO; and (10) support any person, body, association or entity within the retirement fund industry that provides education and training for trustees and officials of municipal retirement funds, and to assist by giving practical advice and guidance in this regard. 5. (1) The principles which follow shall be used to interpret the objects in Clause 4 and shall underpin all decisions made by the MRO, the Exco and any committee, group or task team established by the MRO or the Exco. (2) The principles referred to in (1) are: (c) (d) (e) (f) all sections of South Africa s population have the right to make provision for their retirement; the continuation of tax incentives in connection with retirement provision is necessary to encourage savings; a sound funding and financing system with appropriate State supervision is necessary to ensure stability and certainty for the future in the retirement fund industry; transparency and member involvement in the management of retirement funds are crucial to ensure that retirement funds are managed for the benefit of fund members and pensioners; members of retirement funds should be encouraged to preserve their equity in their retirement funds until their retirement; inflation linked retirement income should be encouraged; and

4 (g) existing retirement benefits and the rights of fund members and pensioners must be respected and protected at all times. Capacity and Powers 6. The MRO may: Indemnities (1) acquire or hold rights in or to or over movable and immovable property and obtain loans for the financing of such property which in the case of immovable property, may be secured by a bond; (2) in its own name sue and be sued, including the institution or defence of actions on behalf of its members; (3) determine membership fees and raise special levies, where necessary, from its Members and bank such funds in a banking account or accounts opened in the name of the MRO with any lawfully registered financial institution; (4) invest its funds with any lawfully registered financial institution; (5) pay for any service provided to or for the MRO in accordance with its objects in Clause 4; (6) determine remuneration payable to any person for work done for the MRO: provided that neither an office-bearer nor a member of the Exco shall be remunerated for serving in that capacity; (7) enter into agreements, partnerships and similar arrangements with any person, body, entity or organisation with like aims; (8) delegate any power or function to an office bearer or a committee; and (9) generally do or perform any act or thing that a voluntary association may by law do or perform. 7. (1) The MRO shall not be liable for any debt incurred or obligation accepted by any of its Members or office-bearers without proper prior authorisation; (2) A Member of the MRO is, except as set out in Clause 8, indemnified against any cost, claim or suit whatsoever arising as a result of anything done or performed in the course of any lawful instruction given or resolution made by the Exco or taken at any meeting; (3) An office bearer and/or member of Exco are indemnified against any liability for bona fide actions performed in these capacities.

5 Limitation of Liability 8. The liability of a Member shall be limited to the amount of its membership fees and special levies. Membership MEMBERSHIP 9. (1) Subject to (2) and (3) the membership of the MRO consists of the following categories: Retirement funds; and Pensioner organisations Application provided that all membership fees and special levies have been paid. (2) Any Retirement fund or Pensioner organisation represented at the inaugural meeting of the MRO and presenting an application contemplated in Clause 10 before or at such meeting becomes a Member of the MRO and any of such bodies which apply for membership after the inaugural meeting, as provided for in Clause 10 and which application is accepted in terms of Clause 11, become Members of the MRO. (3) Any person, body or institution not referred to in (1) may apply for membership of the MRO in terms of Clause 10 if such person, body or institution is, at the discretion of the MRO, capable of making a positive contribution to the achievement of the objects contained in Clause 4. 10. Any potential member which desires to become a Member of the MRO must apply in writing to the Secretary submitting the prescribed application form, duly completed. Consideration of applications 11. (1) The Exco shall examine each application as to whether the applicant body complies with requirements contemplated by Clauses 9 and 10. (2) The Exco may accept or reject any application and in the case of rejection, shall furnish written reasons therefore. If an application is accepted the Exco shall assign it a category of membership as defined in this Constitution. (3) The Exco shall inform the MRO of any decisions in terms of (2) above.

6 Representatives 12. A Member referred to in Clause 9(1) may be represented on the MRO by a maximum of four (4) representatives, preferably selected to reflect the constituencies making up the board of trustees in the case of a Retirement fund. 13. A Member referred to in Clause 9(1) may be represented by two (2) representatives. Termination of Membership 14. Any Member may, on giving at least sixty (60) days written notice resign from the MRO: Provided that such resignation shall not affect the liability of that Member for the payment of any annual membership fee or special levy which is due and payable. 15. The MRO may, by a vote taken by a majority of its Members present and voting at a meeting, terminate the membership of a Member or request a Member to replace any representative who serves on the MRO or Exco on behalf of such Member with another representative. The MRO GOVERNANCE 16. A duly constituted meeting of the MRO shall be the highest decision-making body capable of taking or reviewing any decision permitted or required by this Constitution. Office-Bearers 17. The MRO shall annually at its Annual General Meeting elect the following office-bearers by closed ballot from the representatives of Members: (1) Chairperson; and (2) a Deputy Chairperson provided that the Chairperson and Deputy Chairperson may not be from the same Member.

7 The Exco 18. There shall be an Exco for the MRO, the members of which shall be as follows: (1) the Chairperson and Deputy Chairperson of the MRO who shall respectively be the Chairperson and Deputy Chairperson of Exco; and (2) five (5) further members to be elected by closed ballot at the Annual General Meeting as follows- four (4) Retirement fund Member representatives who should preferably reflect representation from employees and employers, selected by the Retirement fund Members provided that no Retirement fund Member shall have more than one representative on Exco; and one (1) Pensioner organisation representative elected by the Pensioner organisation Members, provided that no Pension organisation Member shall have more than one (1) representative on Exco. Powers of the Exco 19. The Exco shall have the following powers: Committees (1) the management and administration of the MRO between its general meetings and the exercising of the powers and duties set out in Clause 6(4), (5), (6), (7), (8) and (9): Provided that all decisions taken by the Exco shall be reported to the MRO at its next meeting; (2) the appointment of a Secretary who shall also be the Treasurer of the MRO; (3) determining the agenda for all meetings, subject to this Constitution; (4) calling of special general meetings of the MRO; (5) co-option either to fill vacancies or for ad hoc purposes. 20. The MRO may: (1) establish committees; (2) define their functions;

8 (3) determine their membership and appoint their members, designating one member as chairperson and another as deputy chairperson; and (4) disestablish any committee. Frequency MEETINGS 21. (1) The MRO shall at least twice a year hold general meetings and one such meeting shall be the Annual General Meeting. Quorum (2) The EXCO shall meet as often as its Chairperson may decide but at least twice a year within two months prior to the required two meetings of the MRO. (3) Any committee referred to in Clause 20 shall meet as directed by the MRO or Exco. 22. The quorum for any meeting of the MRO shall be half of the number of Members entitled to be at that meeting, plus one. The quorum for any other meeting envisaged in this Constitution is half of the number of representatives, plus one. Decisions 23. (1) The MRO and the Exco shall strive to reach decisions based on consensus. (2) Where consensus cannot be reached at a meeting then: if the matter is not considered urgent by the majority of those present and voting, consideration of that matter will be deferred to the next meeting; but if the matter is considered urgent by the majority of those present and voting, the matter may be decided by a majority of the votes of those present and voting. If consensus on the matter cannot be reached at this meeting, the matter may be decided by a majority of the votes of those present and voting. (3) For the purposes of this Constitution, each Member of the MRO has one vote and each representative serving on the Exco has one vote, except persons co-opted for ad hoc purposes.

9 (4) In the event of an equality of votes being cast the Chairperson of the MRO or the Exco, as the case may be, shall in addition to a deliberative vote, also have a casting vote. Absence of chairperson 24. (1) In the absence of a chairperson from a meeting, the deputy chairperson shall preside at that meeting and exercise all the powers and perform all the functions of the chairperson. (2) In the absence of both a chairperson and a deputy chairperson, the representatives present at a meeting shall nominate one of their number to act as chairperson for that meeting. Notice of meetings 25. (1) Notice of any meeting, other than an AGM, shall be given in writing fifteen (15) calendar days prior to such meeting: provided that in cases of urgency, to be determined at the sole discretion of the Chairperson, a shorter period of notice may be given. (2) The notice referred to in (1) shall clearly set out the venue, date and time of the meeting, together with a list of the matters to be discussed and any supporting documentation if this is available. (3) The written notice referred to in (1) may be transmitted to Members by pre-paid post, facsimile, courier or by electronic means. (4) The non-receipt of a notice referred to in (1) by a Member shall not invalidate the proceedings of a meeting. General Meetings 26. (1) There shall be an Annual General Meeting (AGM) held during the first four months of every year, the actual date of which shall be determined by an AGM, General Meeting or Exco. (2) At least twenty-one (21) calendar days before the date determined for the holding of an AGM, the Secretary shall send a notice of the meeting and an agenda for the meeting to each Member by pre-paid post, courier or by electronic means. (3) The Agenda for an AGM shall contain the following items: Attendance and apologies.

10 (c) (d) (e) (f) (g) (h) (i) (j) (k) Announcements by the Chairperson. Confirmation of the minutes of the last AGM. Any matters arising out of the minutes of the previous AGM. The Annual Report of the MRO. The certified Financial Statements and the fixing of membership fees and special levy, if applicable, for the ensuing year. The election of Chairperson and Deputy Chairperson. The election of members of the Exco. The appointment of Auditors, if applicable. Any motion proposed by the Exco or by a Member in terms of (6). General. (4) A Special General Meeting (SGM) shall be convened when: (c) the Chairperson so directs; the Exco so decides; or not less than five (5) Members in writing request that such a meeting be convened. (5) The written notice for a SGM shall contain with sufficient clarity the matter to be discussed and no discussion other than on that matter shall be permitted at such meeting. (6) Any Member desiring to place a motion before an AGM shall do so in writing to reach the Secretary at least forty five (45) calendar days before the date of such meeting. (7) If by the time scheduled for the start of a meeting, no quorum is present the meeting shall adjourn for fifteen (15) minutes and if by then a quorum is not present, the quorum shall be those present. (8) Except in the case of the election of the Chairperson and Deputy Chairperson and Exco, voting at a General Meeting shall be by a show of hands unless the Members present decide to vote by way of a closed ballot. (9) The non-receipt of a notice referred to in (2) or (4) shall not invalidate the proceedings of a meeting.

11 FINANCE Income 27. The income of the MRO shall consist of membership fees and special levies paid by Members, grants, donations and loans. Membership Fees 28. The MRO, at its AGM, shall fix the membership fees and, if applicable, special levies payable by Members for a calendar year. Financial Management 29. (1) The Exco shall from time to time authorise the opening or closing of accounts with lawfully registered financial institutions in the name of the MRO. (2) The Secretary shall ensure that all cheques and cash paid to the MRO are banked in one of the accounts referred to in (1). (3) The funds of the MRO shall be spent only on the business of the MRO. (4) The Secretary shall report at each ordinary meeting of the Exco on the financial state of the MRO. (5) The financial statements of the MRO shall annually be certified by a suitably qualified person and such statements presented to the AGM. (6) The financial year of the MRO shall be from 1 January to 31 December of each year. (7) Any payment out of the funds of the MRO shall be validated by at least two persons authorized by the Exco. Records GENERAL 30. (1) The Secretary shall be responsible for issuing agendas and taking minutes of all the various meetings of the MRO. (2) The Secretary shall have custody of the agendas, minutes, correspondence, financial records, banking records and all other records of the MRO. (3) The Secretary shall open and maintain a register setting out the details of each Member with a postal and/or e-mail address as well as a

12 postal and/or e-mail address for each representative on the Exco and committees. (4) Any Member may examine the records and books of the MRO. Amendments to the Constitution 31. The provisions of this Constitution may be amended at a general meeting, of which twenty-one (21) calendar days' notice has been given, by a vote supported by a majority of those Members present in good standing. Dissolution 32. (1) The MRO may be dissolved at a general meeting of Members of which thirty (30) days' notice shall be given, by a vote supported by not less than two-thirds of the Members present in good standing. (2) In the event of a vote in favour of dissolution being cast at the meeting referred to in (1), the Members present shall appoint a person as liquidator to settle any debts and to realise the assets of the MRO. (3) The net residue of the assets referred to in (2), if any, shall be paid to any non-profit organisation or organisations that have aims and objects similar to the objects in Clause 4 or be refunded to Members on the same basis which they contributed, as may be decided at the meeting referred to in (1). (4) Where two or more organisations are identified to receive a share of the net assets of the MRO, the Exco shall determine the proportions in which the assets are to be distributed.