Government Employees Pension Law Amendment Bill: hearing and adoption

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Finance Standing Committee

13 September 2004
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Meeting report

FINANCE PORTFOLIO AND SELECT COMMITTEES
14 September 2004
GOVERNMENT EMPLOYEES PENSION LAW AMENDMENT BILL: HEARING AND ADOPTION


Co-Chairpersons: Dr Rob Davies (ANC) & Mr T Ralane (ANC)

Documents handed out:
Government Employees Pension Law Amendment Bill [B15-2004]

SUMMARY
The South African National Defence Force Union made a submission dealing with representation on the Board of Trustees of the Government Employees Pension Fund. It acknowledged that the submission was not directly related to the Bill. It had problems with discussions in the Public Service Coordinating Bargaining Council that led to a resolution on the composition of the GEPF Board because the Department of Defence representatives at the PSCBC had not consulted with the MBC and SANDU. Its members are opposed to being represented on the board by a representative who must also represent the National Intelligence Agency and the South African Secret Service. The Committee suggested that the Union make a written submission which it would pass on to the relevant Minister.

The Portfolio Committee adopted the Government Employees Pension Law Amendment Bill without amendments.

MINUTES
Dr F le Roux (Deputy Director-General: Government Employees Pension Fund), Ms M Vercuil (Legal Advisor: GEPF) and Mr G Barnard (Actuary and Consultant to GEPF) represented the National Treasury. Mr P Greef represented the South Africa National Defence Force Union (SANDU).

Dr Davies chaired the meeting. The Chairperson informed the Committee that Cosatu had decided to withdraw its submission on the Bill. He invited Mr Greef to proceed with the SANDU submission.

Mr Greef said that the matter that the Union wanted to bring to the attention of the Committee was not related to any specific amendment in the Bill. However, the matter impacted on the overall theme of the amendments and the new Government Employees Pension Fund dispensation. There would be a new board of trustees that would take over from the Minister of Finance. The discussions on the composition of the board were conducted in the Public Service Coordinating Bargaining Council (PSCBC) and SANDU had no access to the forum. The military has its own separate Military Bargaining Council (MBC) that is on an equal footing with the PSCBC. It has been in operating since 2000. During the discussion on the composition of the board, the Department of Defence representatives had not consulted with the MBC and SANDU. This had led to a situation where SANDU members would be forced to be part of a dispensation which they were never part of at the beginning. He said that this amounted to unequal treatment of military staff and should not be allowed to continue.

Mr Greef said that there are general Regulations to the Defence Act that prohibits any military trade union from representing anyone who is not military staff. If the SANDU was to concede to the envisaged composition of the board where one representative would represent National Intelligence Agency, South African Secret Service and the National Defence Force members, it would be contravening those Regulations. SANDU members do not wish to be represented by representatives from other organisations. The Union had addressed letters to the Minister of Finance asking him assist in the matter and no response had been forthcoming. Several meetings were held under the leadership of the Chairperson of the PSCBC but no progress could be made. The Union had been informed that the GEPF had been trying to have members of the Defence Force indicate, by way of vote, the person they want to be their representative on the board. This happened while the Union was still busy trying to solve the matter. The Minister of Finance and the GEPF were consequently informed that should the election go ahead and the concerns not addressed the Union would resort to legal action.

Mr Greef concluded by saying that the Union feels that the board would not be able to function properly unless the problem was resolved.

The Chairperson agreed that the Bill did not cover the submission. He felt that section 6 of the principal Act provides some principles around which the Union might want to litigate should it decide to do so.

Discussion

Mr K Moloto (ANC) said that the submission raised some valid points but the Bill did unfortunately not cover them. He encouraged the presenter to pursue the matter with the relevant authorities.

Ms R Taljaard (DA) asked for clarity on the standing of the Military Bargaining Council. She said that the problem with the submission was that it dealt with issues agreed to in a PSCBC Resolution 12 of 2002. The Resolution stands and Parliament cannot override it. She asked if the presenter had tried to raise the issue with the Minister of Defence.

Mr Greef replied the position of the MBC is regulated by Chapter 20 of the Defence Act. He said that the Union has a problem with the Resolution and has instituted action in the Pretoria High Court. The Union wants the Court to make an order to the effect that the Minister of Public Service and Administration has no jurisdiction to interfere in negotiations between the Minister of Defence and the Union in the Defence Force.

Ms B Hogan suggested that the Committee should get a written submission from the Union and the Chairperson of the Portfolio Committee should pass the matter on to the relevant Minister.

Mr Greef said that the Union had contacted the Minister of Defence and the Minister felt that the matter could best be dealt by the Minister of Finance and the GEPF.

The Chairperson felt that the issue raised by the union was covered by section 6(3) of the Main Act.

Ms Taljaard noted that there was a conflict of law. She felt that it was not desirable to have that conflict resolved through litigation. She asked the Chairperson to raise this in his correspondence to the Ministers of Defence and Finance and the GEPF.

The Chairperson thanked the presenter and proceeded to present the Bill clause by clause.

Clause 5 Amendment of section 25 of Proclamation 21 of 1996
Ms Taljaard noted that the clause refers to a "pension increase policy". She asked what the policy entails.

Mr le Roux replied that there is no formal policy. It was agreed during negotiations in the PSCBC that there should be a policy but it has not been formulated yet.

Clause 7 Amendment of section 27 of Proclamation 21 of 1996
The Chairperson and Ms Taljaard asked why the clause would apply retrospectively.

Ms Vercuil replied the date was agreed on in the PSCBC negotiations. The idea was to stop the administrative burdens caused by dormant members.

Ms Taljaard asked why it was taking so long to formally constitute the board.

Mr le Roux replied that the process is underway. It is expected that the board would formally meet before the end of the year.

Voting on the Bill
The Chairperson read both the motion of desirability and the report on the Bill and the Portfolio Committee agreed on both of them.

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