Krige Petition: input by Defence, Public Service & Administration, Treasury, Gov Employees’ Pension Fund

PRIVATE MEMBERS’ LEGISLATIVE PROPOSALS AND SPECIAL PETITIONS STANDING COMMITTEE
29 August 2006
KRIGE PETITION: INPUT FROM DEPARTMENTS OF DEFENCE, PUBLIC SERVICE AND ADMINISTRATION, NATIONAL TREASURY AND GOVERNMENT EMPLOYEES’ PENSION FUND

Chairperson: Ms M Mentor (ANC)

Documents handed out:
Summary of Brigadier Krige’s assets
Memorandum from DPSA 29 August 2006
Minutes of Proceedings 01 August 2006

SUMMARY
The Committee had previously discussed a petition by Brigadier Krige, concerning his eligibility for a further special pension. More information had been requested and was now before the Committee. The Committee was not unsympathetic to his plight and family circumstances, but noted that he had received a substantial lump sum on retirement, was receiving a generous pension now, and had sufficient assets still to provide for his disabled dependant, even if he had failed to do so earlier. The petition was not supported.

Mkhonto We Sizwe Military Veterans Association was asked to give input also on the petition. During discussion several problems were highlighted concerning its members, in particular those who had not been eligible for pensions in 1992, and the high numbers of orphans. It was agreed that the Chairperson submit a report to Parliament with details of the problems, thus opening the way for full engagement by all relevant departments. It was also suggested that the Association should itself petition parliament.

The Committee formally resolved to endorse the proposed Magistrate’s Court Amendment Bill in relation to attachments of the property of debtors..

MINUTES
Ms Mentor specially welcomed colleagues from Department of Public Services and Administration (DPSA), National Treasury (NT), Government Employees Pension Fund (GEPF) and Mkhonto We Sizwe Military Veterans Association (MKMVA). She would take up the question of why MKMVA had not been specifically listed on the Order Paper.

Petition by Brigadier J D Krige
Ms Mentor recapped that at the last meeting the DPSA had explained the implications of the cut off date of 1 December 2000. The petitioner, Brigadier J D Krige felt that that cut off date disadvantaged him and his pension rights. He had been a Brigadier in the police force and had retired twenty-one years before that cut off date. Under the new dispensation his disabled 50-year old dependant would have been able to benefit when Brigadier Krige died. Any citizen had a right at any given point to petition Parliament. Brigadier Krige had applied to GEPF, Department of Defence, and National Treasury, requesting that the disabled dependant should be allowed to benefit, but he was informed that his application was outside the law and regulations. His last recourse was to petition Parliament. The committee had already met three times and it was hoped the matter would now be concluded. Ms Mentor confirmed that the sponsor had forwarded the information requested at the last meeting.

Ms Mentor explained that the committee normally checked whether the matter would set a precedent or would result in a flood of similar applications; whether all other avenues had been exhausted before Parliament was petitioned; and whether the Committee had enough information to apply their minds. A pertinent question was raised at the last meeting relating to whether the family should have taken steps to provide for the dependant at an earlier stage. Brigadier Krige received a handsome amount of money when he retired, and still received a good pension. Another question related to assets owned by Brigadier Krige or the family. She asked the sponsor to take the meeting through the outstanding information.

Mr F van Heerden (FF+) confirmed that the facts of the case had already been presented.. He now submitted a summary of the assets, policies, property, gratuity, and annuities of the petitioner. He considered extracts from bank statements to be confidential, so these were not submitted, but he could show them to the Committee if necessary. In summary, Brigadier Krige’s assets consisted of a bond-free townhouse valued at about R500 000; furniture valued at R30 000; a motor vehicle valued at R20 000, and cash to the value of R713 027. When the petitioner had retired 21 years ago he received a gratuity of approximately R100 000 and his monthly pension was R2 000 per month with annual increases. That pension now paid R20 000 per month. The petitioner had explored all other avenues available and the special needs of the disabled child had already been dealt with.

Ms Mentor explained that she had invited input from MKMVA to assess the likelihood of a flood of several similar claims and applications, as well as to comment on this petition.

Discussion

Mr A Ainslie (ANC) was surprised there were no other policies and asked whether the petitioner had medical aid. He noted that the cash amount of around R700 000 could buy an annuity for the dependant, which would more than take care of his needs, and he could be housed in the property.

Mr van Heerden felt that he could not reply to this comment; it was a matter for debate by the Committee. He confirmed that there were no other policies or medical aid. Brigadier Krige was already 85 years old.

Mr H Bekker (IFP) submitted that DPSA could probably confirm that medical aid, similar to civil service schemes, would cover the family until the date of death of the primary member.

The Chairperson queried Mr van Heerden’s instructions from the petitioner; and whether he was representing the petitioner as his lawyer.

Mr van Heerden replied that he was still practising as a lawyer, but in this instance the petitioner’s attorneys had asked him to approach the Committee in his capacity of Member of Parliament.

The Chairperson said it was very important to clarify his role and asked whether he received a legal fee. Lawyers could not sponsor petitioners; only Members of Parliament could do so.

Mr van Heerden responded that he had disclosed in the Members’ Interests Book that he had permission from the Chief Whip to practise as a lawyer. Many voters had asked him, because of his legal background, to pursue cases for them, but no fee was involved.

The Chairperson thanked Mr van Heerden for the duties of sponsorship that he had performed as a Member of Parliament. She would communicate the Committee’s decision to him after the meeting. Mr van Heerden thanked the Chairperson for the opportunity to present the petition and was then excused.

Deliberations
Mr C Lowe (DP) commented that he had not been able to attend previous meetings because of Labour Court meetings, but he had read the petitions. His major concern was about MKMVA and the precedent this case could set.

Mr S Mshudulu (ANC) responded that MKMVA had been called in to try to interrogate the pension money given to the petitioner, in the interests of consistency. It had been shocked to hear that a person receiving R20 000 was dissatisfied. MKMVA had a large membership, all of whom and had played a vital role towards democracy and therefore MKMVA had been invited as having similar status to DPSA and GEPF. The committee was not fighting against the petitioner but should be aware that the petitioner had benefited from apartheid-imposed imbalances.

Ms Mentor clarified that MKMVA had been invited for two reasons. The committee had wanted to hear the probable size of the problem and had considered that MKMVA, representing the largest former armed liberation force, and the Department of Defence, representing the current forces, could assist in input. MKMVA representatives had funded their own travelling costs for the first meeting to help the committee understand the size of the problem. Secondly, she pointed out that petitions to Parliament should not only end with a yes or no. Many other issues could arise that would otherwise not have been brought to Parliament’s attention, and MKMVA may be able to give input in other areas.

Mr K Reyneke (Assistant Director Finance: GEPF) stated that GEPF had 295 000 pensioners. There were roughly 1 988 adult disabled dependants affiliated to the Fund. This was a conservative estimate, based only on members who belonged to the medical aid. If one were to take that figure and apply the average monthly pension and the rule of GEPF Law 14.6.3, which afforded a 20% pension, the liability was around R11.45 million per year, calculated only on members. A petition like this one was not limited to members of the Fund. He stressed that all figures were only rough estimates.

The Chairperson asked whether he was only talking about disabled dependants, and asked how the Fund catered for orphans and the effect of HIV/AIDS.

Mr Reyneke responded that the GEPF law was amended to allow for orphans in December 2000. Currently provision was made for active members who belonged to the Fund and pensioners who retired after 1 December 2000.

Mr Ainslie expressed surprise and disappointment that Brigadier Krige, over the last 55 years, had not made provision for his disabled child even though he had the means to do so. The gratuity of R100 000 was an enormous sum twenty one years ago. He had the means, the education and the knowledge to know that he should not simply presume to depend on government in retirement. Mr Ainslie believed that granting the application would expose government to enormous risk because private insurance investors would see this as a precedent. Furthermore, even though no provision had been made in the past to cater for the dependant there was still the opportunity to do so now. The assets and lump sum remuneration amounted to at least R1 500 000, which was way over the average MK allowance and normal pensioner needs. The cash of R700 000 could purchase annuities. The dependant could continue living in his own house, with supervision, and still receive a monthly sum in excess of R3 600. Mr Ainslie regarded the failure to make provision earlier for his dependant as the deciding factor in his recommendation that the petition be refused.

Mr Lowe agreed with these concerns. He had asked for clarification to compare the position with that of his own father, who had participated in the freedom struggle, and who also retired in 1989 after 40 years service with Transnet. His father’s pension was approximately R3 000 per month. The sum of R20 000 was surprising, and seemed far out of line with what most MK veterans were receiving. He was also concerned that the petitioner had not made provision for his son either in the past or out of his current funds.

Mr Jan van Pletzen (DPSA) highlighted some concerns of DPSA, which were set out in the memorandum. The petitioner had stated that he had no other remedy in law. As far as the rules of the GEPF and South Africa’s social network were concerned that was not entirely true. The Department of Social Development was the correct institution to give guidance on these issues. If the petition were supported it would create a precedent. Brigadier Krige’s case was not unique and a precedent should not be created. Thousands of disabled citizens in South Africa only received disability grants. The avenue of using the cash and other assets to sustain his son must be fully explored as there was sufficient available.

Mr van Pletzen indicated that the general old age pension from DPSA amounted to R2 500, while Brigadier . Krige received R16 303 per month after tax. The rules were amended in 2002 and excluded all persons who retired before that date for several reasons, one of which was cost. Disabled persons were only one category, and the cut off date also adhered to the principle that vested rights should not be interfered with. He pointed out that GEPF focused on trying to address past discrimination and was already trying to address groups who had been excluded from the pension fund for years for various reasons. DPSA was not in favour of providing any further funds to the petitioner.

Mrs I Mars (IFP) commented that the dependant was currently spending the day at an institution, but could be accommodated there full time at a cost of R3 500 per month. The Committee was concerned about the dependant, but it seemed reasonable to assume that when the petitioner died he could be put in full time care. It was the present household of the Brigadier that demanded his full pension.

Mr Mshudulu stated that the objective of getting MKMVA involved was to share experiences. The point made by DPSA was negotiated settlement. Mr Mshudulu mentioned some experiences during his chairmanship of the Board of Trustees of the Union’s Pension Provident Fund. There it had been agreed that laws should not be implemented retrospectively. The Committee was not unsympathetic to the issues but he agreed that assets could provide for the disabled dependant, and part of the estate could even be sold.

Ms Mentor believed, taking into account the genuine poverty in the country, that it would be grossly irresponsible to assent to this petition. However, it did not mean the committee should not look into the challenges of people in the same situation, and to respect all who had been involved in the struggle and development. She asked to hear from MKMVA and National Treasury.

Ms Thembekile Plaatjie (Head, Parliamentary Office: National Treasury) commended the committee for the manner in which it had applied itself to this issue. National Treasury believed that within the context of the law this petition could not be met. Other remedies were available, and in addition it was obvious that other adequate provision could be made for the dependant.

Mr Mshudulu asked what Treasury meant by ‘within the context of the law’.

Ms Plaatjie responded that she was referring to the current legal framework. Should the Board of Trustees wish to take the matter under consideration there would be changes to the proposals made and those proposals would still need to be taken to the Bargaining Council.

Mr Reyneke stated that GEPF could only support this if there were an amendment to the law, and insufficient cause had been shown to do this.

The Chairperson commented that the Department of Defence had been invited, but had not attended because Brigadier Krige had been in the Police force. She would require them, together with MKMVA, to diagnose this situation and would be writing to them. She asked MKMVA to assist the committee with its input.

Mr Dumisani Khoza (National Treasurer: MKMVA) thanked the chairperson for inviting him to this very important meeting. MKMVA was probably the biggest non-statutory force outside the old South African Defence Force. Because it was not a regular army, it was uncertain exactly how many members there were. A number of MKMVA veterans had suffered hardships inside and outside South Africa and all had played a role in furthering the aims and objectives of the people of South Africa.

When benefits were negotiated, the members of MKMVA had had little understanding how the free market systems operated. No pensions were awarded and there was a cut off age. Anyone who, in 1992, was under 35 could not get any State-funded special pension. This was still a major issue. MKMVA had petitioned National Treasury and members had held demonstrations in the last six months. In all SADC countries this issue had to be tackled. Namibia was facing a serious process. MKMVA members felt they were left defenceless. This could possibly be their last appeal to Parliament urging that those under 35, (which constituted the majority of members, many of whom had families to support) could not be left homeless with no job opportunities and no income. Even those who qualified for the special pension received only R700 and often had an extended family, and health problems. The current cost of supporting orphans, who should be cared for by the State, was approximately R4.5 million per annum, and this did not cover all orphans.
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Mr Khoza had hoped Department of Defence and National Treasury would be at the meeting. These were the Departments with whom MKMVA were trying to interact. The matter needed to be considered urgently. About 30 000 trainees in the under-35 age group were in the streets with no jobs or skills. Although government had promised they would be given the skills to reintegrate them into normal society, this had not happened to any real extent. The little retraining that was given was in skills such as sewing, which would not get people into the mainstream economy. Ten years later members were now in their 40s, many were ill, still without income and, due to their age, were not considered employable. As a non-profit organisation MKMVA had no sources of income to sustain them.

If MKMVA supported Brigadier Krige’s petition this would create a serious challenge in terms of equality issues. Brigadier Krige, and others like him, still received pensions from the traditional or regular defence forces. MKMVA members needed still to be brought into that system. In 1981 Brigadier Krige had received R100 000. In 1994 most MK members were given R22 000, too little even to invest in property. MKMVA believed that Brigadier Krige had received more than enough. His benefits should be measured against others who had not received any benefits at all.

The Chairperson reminded Mr Khoza that DPSA and National Treasury were now dealing with discriminatory matters.

Mr van Pletzen responded that this was true, but this was separate from the current issue. The correct Department to respond would be Department of Defence.

Ms Mentor asked the DPSA to assist. The discriminatory issues should be addressed by the Departments of Defence, National Treasury and DPSA. The disparity in the amounts received in retirement, the issue of under-35s and other problems all had to be considered. She suggested that perhaps MKMVA should consider bringing a deputation to Parliament to address the discriminatory matters. The door to further engagement between Parliament and government departments should not be closed; an amicable solution could still be reached.

Mr Mshudulu stated that in dealing with this issue the Committee had respect for procedures governing the presentation of petitions. Members should be aware that sometimes technicalities might undermine what was discussed. It was clear that South Africa faced a diversity of challenges and he thought government must look again into these issues, and facilitate engagement that would allow MVA put its case fully. In so far as the Department of Defence was concerned Mr Mshudulu would raise this matter with the Minister of Defence that afternoon.

The Chairperson proposed that the matters and problems that MKMVA had highlighted should be put in her report to be forwarded to Parliament, which was the normal procedure. The report would be taken to the Speaker’s Office and all the role players would be involved, including DPSA, NT and others who could assist in coming up with a possible solution to MKMVA’s problems.

Mr Ainslie seconded the Chairperson’s proposal, bearing in mind that there were already processes in place to block some of the gaps that had been identified. It would be useful to get updates of that process.

The Chairperson commented that if processes were in place they should be communicated to all who were affected, including this Committee.

Ms Mentor summarised the decisions of the Committee. Firstly the Committee had resolved to refuse the petition, since earlier provision could have been made and since assets were sufficient to look after the disabled son after the death of the petitioner.

Secondly, in regard to issues raised by MKMVA about former armed forces of the liberation movement who might be in a similar situation, the Chairperson would inform Parliament that these issues had been brought before the committee. The Committee acknowledged that there might be processes that were addressing some of those issues. However it urged National Treasury, Department of Defence, DPSA and other affected parties to inform MKMVA of any processes, to meet with them frequently to find a way forward, and in due course to furnish the Committee in writing with a progress report.

The Chairperson informed MKMVA that it too had the right to petition Parliament.

Mr Mshudulu pointed out that he would prefer to define the issues more specifically, to make it clear that the under-35 group and the issues of orphans were very clear.

Mr Khoza clarified that those who were in the under 35 bracket had been deemed, during 1994, not to qualify for special pensions. He stated that MKMVA was committed to democracy but would start utilising the avenues available to petition Parliament and try to improve the benefits to its members.

Ms Mentor reminded MKMVA to request a Member of Parliament to sponsor the petition and explain the processes and procedures.

MAGISTRATE’S COURT AMENDMENT BILL
Mr Ainslie reported that the Constitutional Court had identified a problem that debtors’ property was being confiscated in pursuance of very small debt. A relatively simple process would authorise the Sheriff to attach and sell homes. The Constitutional Court had recommended that this must be rectified. The Committee had deliberated on this matter, and had approved a proposed amendment to the effect that in future a Magistrate would need to give specific direction that fixed property could be attached. However, since there had not been a quorum at that meeting, the decision was not formally adopted. The current meeting would adopt the proposal.

Mr Mshudulu urged that a summary of the present procedure be circulated, because many sales due to default of debtors were still being held. Often the houses were sold on auction for small amounts and then resold on the open market for a much larger figure.

The committee recommended that that summary be circulated to all Members of Parliament.

The Chairperson announced that she would forward it to the Speaker, together with the amendment, and would inform her of the Committee’s approval of the amendment.

Mr Bekker clarified that the Department of Justice had approved the initial amendment and procedure and the Committee had endorsed it. He reminded the Committee that Mr Deon Rudman of the Department of Justice had undertaken that this information would be circulated to all Sheriffs of the Court.

Mr Ainslie recommended that all of those issues be included in the Chairperson’s report.

Minutes
The minutes of meetings held on 01 August and 08 August 2006 were approved, subject to minor corrections.

Members expressed concern that meeting times clashed with other meetings and asked if times could be changed, preferably so that the Committee could meet over lunchtime.

The meeting adjourned.