Military Veterans’ Matters: briefings by Departments of Defence & Finance & Committee Algerian Study Tour Report

JOINT STANDING COMMITTEE ON DEFENCE
9 March 2007
MILITARY VETERANS’ MATTERS: BRIEFINGS BY DEPARTMENTS OF DEFENCE AND FINANCE & COMMITTEE ALGERIAN STUDY TOUR REPORT

Chairperson: Mr S Montsitsi (ANC)

Documents handed out:
Presentation on the Special Pensions Fund
Presentation on the Non-Statutory Forces Pension Fund

SUMMARY
The presentation on the Special Pensions Fund covered requirements for eligibility and exclusion, the extension of new benefits under the Act; the closing of applications to the fund and the numbers of people who had applied, been approved or been rejected. Members felt unhappy with the requisite that applicants had to have been 35 years of age by 1996 in order to benefit from the fund. A second issue was the cut off date for applications, which Members repeatedly questioned. Members also sought clarity as to how pensions were calculated; who qualified and who were excluded.

The presentation on the Non-Statutory Forces Pension Fund covered eligibility criteria; the benefit structure and member options. Statistics on applications were also provided. The discussion focused on the ways in which the calculations were made and the Members’ concerns that the Fund was not actually providing access to pension monies for members of the non-statutory forces, when that was its express purpose. Members also felt that the statutory requirements for eligibility were unfair as they created additional hardship for applicants. The Committee agreed that it needed to further engage with the Act and the actuarial implications at a later meeting before it could make a detailed evaluation.

MINUTES
Special Pensions Fund: Briefing
Mr Donny Jurgens, CEO, Special Pensions Fund briefed the Committee on the purpose of the Special Pensions Fund (SPF). The Fund was created by Act 69 of 1996 and aimed to provide a pension to people who were fully involved in the struggle by their active memberships of either Umkhonto We Sizwe (MK) or Apla and who had thus made sacrifices in the cause of establishing a democratic constitutional order.

The presentation covered requirements for eligibility and exclusion, the extension of new benefits under the Act; the closing of applications to the fund and the numbers of people who had applied, been approved or been rejected.

The basic requirements for eligibility were that that the applicant must be a South African citizen or entitled to citizenship and must have been unable to build a pension for at least five years due to involvement of those five years in the struggle. In addition, the applicant had to have had full-time involvement in a political organisation, been banished or restricted, or must have been imprisoned for a political offence or detained. Families of applicants who died as a result of full-time involvement in the struggle also qualified. A further requirement was that the applicant had to have been 35 years or older on 1 December 1996.

The pension had now had new benefits added it to; including funeral benefits, spouses' pension, an orphan's pension and the possibility for reconsideration of decisions.

In terms of the statistical overview, there had been 54 515 applications received to date, and 4 618 that were received after the closing date of 31 December 2006. In total, 19 366 have been approved; the remainder were either not approved, outstanding, or on review.
 
Discussion
Ms P Daniels (ANC) asked why the Act only applied to people who were older than 35 on 1 December 1996.

Mr Jurgens explained that this was a requirement of the Act. He added that on two occasions, in November 2005 and in 2006, resolutions had been passed in Parliament that something had to be done to accommodate those who had been under 35 at that date. Despite these parliamentary resolutions, there had been no amendments in this regard. Mr Jurgens expressed his wish again for Parliament to take up this matter.

Ms Daniels and Mr J Schippers (ANC) asked questions relating to the calculation of pensions.

Mr Jurgens explained that different amounts were paid to people depending on their ages. In the 35-49 age group, the amount was R6 000 a year, no matter how many years were spent in service. From 50 years old the person would be paid R12 000 a year plus R1 200 a month for each year of service. The 65-plus age group received R24 000 a year plus R1 200 for each year of service.

Ms Daniels asked about polygamous situations in so far as widows and orphans were concerned. Mr Jurgens explained that a divorced wife was excluded, but if two or more wives in an existing polygamous marriage were still alive, they each received 50% of the pension. Children under 18, and children in full-time study who were orphans were each entitled to an equal share of the pension.

Mr Schippers asked whether the CEO was aware that in the Northern Cape, it was generally believed that soldiers in the Old Cape Corps and World War II veterans were eligible. He and Ms Daniels asked what had been done about communicating eligibility requirements around the country.

Mr Jurgens replied that he was aware of the situation in the Northern Cape, and that in fact neither WWII veterans nor any members of the former SANDF were eligible. The SPF was specifically for people who fought for democracy in the struggle.

On the question of communication and outreach, Mr Jurgens added that his department had undertaken road shows throughout the country, had regional offices, had staff in every office to assist applicants, had printed one million leaflets in 5 languages explaining the Fund and the application procedure; had held workshops with political parties on the Act explaining how to apply so that party members could help their colleagues.

Mr Schippers asked to be directed to the local office.

Ms Nobono Sonto of the Western Cape Regional Offices gave the phone number 021 424 8220/1 and address as 7^th Floor, 106 Adderley Street, Cape Town.

Mr Jurgens promised to furnish the committee with a full list of regional offices and contact details as well as the newsletter within the next two working days.

Mr V Ndlovu (IFP), Mr Schippers and Mr R Sonto (ANC) asked about the number of  applications received, approved and outstanding.

Mr Jurgens explained that a large number of applications (26% or 13 917) were outstanding because most had come in shortly before the cut-off date and therefore there had not been time to review them properly. There were 2 628 applications waiting for review, which represented 39%. This was owing to a lack of capacity on the Board to deal with the applications. He explained that the statutory term of the Board was ending in March 2007. The Board would now be expanded in order to increase capacity. The services of the two advocates who served as full-time Board members would also be retained on a consultancy basis.

Mr Jurgens explained the criteria in regard to the number of applications now approved. An applicant, in order to qualify, must have been in service for at least 5 years; have been over 35 years of age on 1 December 1996 and be able to provide sufficient supporting documentation to prove his or her full involvement.

Mr Sonto asked whose responsibility it was to see that applicants were not disqualified purely because they had not been able to fill in the necessary forms correctly.

Mr Jurgens explained that during the struggle period, records were not kept for obvious reasons, so applicants would be asked to prove their case on the strength of supporting evidence, which must then be verified by the Fund’s researchers. The primary onus was on the applicants to find the supporting information. He said that the process was lengthy because the investigators had to do the job properly. In some cases this had not been done, and the Scorpions were now beginning an investigation into fraudulent applications.

Mr Sonto asked about a possible extension to the closing date for applications. Mr Jurgens said that the date was set out in the Act’s Schedules and could not be altered. The cut off date did not apply to any applications already in the system, which were in the process of being processed or being reviewed.

Mr S Montsitsi (ANC) asked about the extent to which the various departments dealing with pensions liaise. The question was not specifically addressed.

Non-Statutory Forces Pension Fund: Briefing by Government Employees Pension Fund(GEPF)
Mr Joel Ramatlhape, Chief Information Officer, GEPF told the Committee that the aim of the Non Statutory Forces Pension Fund (NSFPF), which was created by an Act of Parliament, was to create equity for those members of the non-statutory forces who had later integrated into the SANDF or become a public service official on or before 31 March 2002. It was recognised that these people, because they had been in the struggle armies, had had no access to pensions savings during those years.

The presentation set out the eligibility criteria; the benefit structure and member options. Statistics on applications were also provided.

It was summarised that in order to qualify for the Fund, a member must have served in either MK or Apla. Calculations were made from a starting point of 16 years of age, even if the member was younger when he or she joined. Members with less than 10 years of service qualified for 50% of the pension, while members with more than 10 years qualified for 100% of the pension. The proviso to qualification was that members must meet all their financial obligations by paying back the special benefits amount already received. Members could however opt instead to reduce their period of service instead of paying back monies already received. In terms of the statistical overview, the total number of NSFPF members was 21 365, of which 7 015 had now exited the forces. A total of 14 171 quotes had been generated, of which 973 have been paid benefits in terms of the NSFPF.

Discussion
The majority of the questions posed by Mr Montstitsi, Mr Ndlovu and Mr Schippers centred on the fact that, in order to be eligible for the Fund, a member must either pay back monies which he/she had received on being demobilised, as well as any monies received as a Special Pension, as well as 5% of the members salary as it was in 2002. These three members all felt this was grossly unfair. Mr Montsitsi said that the white members of the SANDF were not treated in this way.

Major-General Solomon Mollo, Chief of Human Resources Support, SANDF agreed that it was very difficult to understand the formulas relating to the NSFPF, and said it was very sad to sometimes have to explain to applicants that not only would they not get anything from the Fund, but that they owed the Fund money if they wanted to join.

Mr Ramatlhape explained the reason for the way the Fund had been structured. A pension fund was normally created by a contribution on the part of the employer, and a contribution of on the part of the member, which totalled 7.5% of salary. In the case of the NSFPF, those members who reintegrated into the public service had already received the State’s contribution in the form of a lump sum demobilisation amount, together with a Special Pensions Fund lump sum or monthly payment. Therefore the amounts that those members applying to the NSFPF were obliged to pay back was in fact what they would have paid out of their salaries (as the member contribution) if they had been contributing to a pension fund at the time they were in MK or Apla. If there is no payback of this contribution by the applicant, it meant that the applicant would receive the State’s contribution twice, and would not have made any contribution to the Fund himself.

Mr Sonto stated that people who had received special pensions and demobilisation money were now enduring great hardships in an effort to pay back the Fund, so that they could then qualify for a pension from the Fund.

Mr Ramathlape summarised the various options that people in such a situation could choose from. He set out that they could either choose to meet all the financial obligations required (by paying back all monies owed), or they could choose to have the number of years of service reduced by an amount equivalent to the financial obligations, or they could not opt for the NSF fund at all, but rather remain with the Special Pensions Fund.

Mr Schippers asked whether benefits were taxed, and whether GEPF would assist people who qualified for NSF to get surety at banks.

Ms N Dlamini asked what happened to people who were discharged, for whatever reason, and what would be the case of a person who had been discharged dishonourably but who then won their case against SANDF

These questions went unanswered as members grappled with the discussion above.

Mr Sonto asked how many people had been successful in their applications to the NSF.

The Chairperson replied that it was less than 1 000 out of 21 000. 

The Committee agreed that it needed additional documentation in order to properly evaluate the Fund.

The Chairperson commented that the Committee was not convinced that the NSFPF was actually helping the non-statutory force members. He said that most people could not repay the contribution and that, as representatives of the public, the Committee would like to review the pension system with a view to answering the question of whether it was being effective in  levelling the playing field. He suggested that the Committee would need additional documentation to properly evaluate the Fund.

There was general consensus in the Committee that the Chairperson’s suggestion be followed.

The meeting was adjourned