Cancellation decision from the Constitutional Court regarding private pension!

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Lerato Khumalo

According to the decision published in today’s issue of the Official Gazette, the Constitutional Court decided on the request for the annulment of some regulations regarding private pension in the Law No. 7319 on Amending the Laws on Insurance and Some Other Fields and a Decree Law.

In the decision of the Constitutional Court, the principles and procedures regarding the period to be gained in the system and the age at which the members will gain the right to retire, who partially or completely transfer the amounts related to domestic or foreign savings and commitments within the scope of existing retirement commitment plans to the private pension system, are determined by the Insurance and Private Pension Regulation and Supervision Agency. It was stated that it would be determined by the

In the request for annulment, it was stated that the private pension system is a part of the social security system, that giving the administration the authority to regulate the procedures and principles regarding the age at which people will gain retirement rights in the system after their transfer within the scope of private pension is contrary to the Constitution, and that regulations in this direction should be made by law.

In the cancellation request, it was stated that the private pension system is a part of the social security system, therefore it remains within the scope of the social security right, and “according to the rules in question, the transfer and the period to be earned after the transfer and the members who have earned the right to retire within the scope of the social security system and the foundation deed to which it is subject are subject to the post-transfer system.” It was stated that the authority to regulate the procedures and principles regarding the age at which the person will be entitled to retirement has been given to the administration.

The decision pointed out that regulations regarding the right to social security should be made by law, and claimed that the regulation in question was contrary to the Constitution.

The Supreme Court, which discussed the application, decided to annul the said regulation.

FROM THE REASONS OF THE DECISION

It is emphasized that in the regulation requested to be annulled in the decision of the Constitutional Court, the age and period conditions required for individuals who have made retirement commitment contracts with the persons or institutions they work for or are members of, to gain the right to retirement after the transfer of these contracts to the private pension system are allowed to be determined by the Insurance and Private Pension Regulation and Supervision Agency. “Thereby, the conditions specified in the contract that must be met for the birth of the right to retirement have been interfered with. In this respect, it has been evaluated that the rules limit the freedom of contract guaranteed by Article 48 of the Constitution.” statements were included.

The decision stated that with the specified legal regulation, the administrative institution was “given the authority to directly regulate” and that “the conditions for individuals to obtain the right to retirement can be determined by regulations that can be changed at any time by the administration”, and the following was stated:

“Therefore, it has been understood that the basic framework and principles regarding the conditions for earning the right to retirement have not been determined by law, and a wide discretion has been granted to the administration. In this respect, it has been concluded that the rules that impose restrictions on the content of the contract do not meet the condition of legality. For the reasons explained, the Constitutional Court decided that the rules are unconstitutional and annulled. .”