Restructuring of Pension Provisioning for Public Service Employees

Meeting report

PUBLIC SERVICE AND ADMINISTRATION PORTFOLIO COMMITTEE
19 AUGUST 2003
RESTRUCTURING OF PENSION PROVISIONING FOR PUBLIC SERVICE EMPLOYEES

Chairperson: P.J. Gomomo (ANC)

Relevant documents:
Presentation by the Department of Public Service and Administration

SUMMARY
The Department of Public Service and Administration gave a status update on the restructuring of Pension Provisioning for Public Service Employees. The update includes a summary of the negotiated changes to the pension provisioning.

MINUTES
The Chairperson noted that there would be not be a presentation on medical restructuring as planned. A presentation had been given to the Minister who sent it back to have errors corrected.

Mr Rapea (Executive Manager, DDG), Ms Ramkin (Senior Manager: Remuneration Policy and Conditions of Service) and Mr Van Pletzen (Manager: Conditions of Service) represented the Department of Public Service and Administration.

Mr Rapea explained to the Committee that the issue of restructuring of macro benefits had started in 2001 and is in its final phases of implementation (see presentation).

Discussion
Mr Kgwele (ANC) asked about the impact of the Venda Pension Fund. He was under the impression that the process was finished. He also applauded the pensionable service increases.

Mr Mohlala (ANC) commented that the streamlining of the public service needs to be commended and that the process should be fully supported. He enquired about rumours that labour did not want to be part of the process. Clarity was also required on dormant membership.

Dr Roopnarain (IFP) asked if there is any discrepancy between male and female pensions. She also wondered whether there is a cost factor for slide 3 (see presentation).

Mr Abrahams (ANC) asked for more specifics on the guaranteed annual increase.

Mr Sikakane (ANC) wanted to know whether special pensions were included.

Mr Rapea replied that the issue about Venda is just one of verification that the process was finished. He explained that labour was reluctant to manage the fund alongside the employer. The unions are now much more comfortable. He added that special pensions were not included here.

Ms Ramkin explained that dormant membership means deceased membership.

Mr Van Pletzen told the Committee that a full cost calculation had been done and that he could provide interested members with the details. He added that the guaranteed increase consist of a minimum of 75% of the CPI level.

Mr Abrahams commented on the term "life partner". He asked whether the phrase was clearly defined in the rules.

Ms Ramkin replied that they had redefined the term spouse in the rules of the GEPF (Government Employees Pension Fund).

Mr Kgwele stated that the present rules of the fund showed a disparity between the age of pensionability of men and women. This needed to be addressed.

Mr Van Pletzen explained that there is no disparity in the GEPF rules. The retirement ages are the same. On the Venda issue, he explained that when in 1996 the pension funds amalgamated it was done according to a certain formula. The Venda Pension Fund privatised before 1996, which meant that members were paid out different percentages. The current fight is over the correct percentages and not about recognised pensionable years.

Mr Rapea added that there is a disparity between men and women when qualifying for a social grant. The age for women is 60 and for men 65. He confirmed that the pension amounts for men and women were the same.

The Chair thanked the department for their presentation and reminded them that the Committee was waiting for the medical restructuring report. The meeting was adjourned.