Mineworker’s Provident Fund & Mines 1970’s Provident Fund briefings

Meeting report

The Chairperson gave a brief background of the Committee.

Mineworkers Provident Fund  (MPF) Briefing
Mr Phillip Joko, Chairman: Mineworkers Provident Fund, explained that he had received some complaints from ex-mineworkers, via the National Union of Mineworkers (NUM. He particularly welcomed this meeting as an opportunity to explain matters. 

Mr Sipho Sidu, Principal Officer: Mineworkers Provident Fund, noted that the Fund was established in 1989 and was the first for black mineworkers. Their service providers included the Lakana Employee Benefit Solutions, Ernst and Young and the Metropolitan Employee Benefits.

Ten people were on the Board of Trustees, which handled the management of the Fund. Five of the board members were appointed by the National Union for Mineworkers (NUM) and the other five by the Chamber of Mines. Their duties included direct control and overseeing the operations of the Fund.

Contributions included the retirement contributions invested with Investment Managers and risk contributions that were paid to insurers, and the balance was transferred to a risk reserve account.

The withdrawal benefits were applicable when a dismissal or resignations had occurred. Each of these had a six-month waiting period. Retrenchments resulted in an immediate payment. The retirement benefit was payable for early retirement from 50 – 53 years old, normal retirement from 60 – 63 years and late retirement, as agreed with the employer. The death benefits were three times the annual earnings. The funeral benefits included benefits for spouses and children.

The terminally ill and ill health benefit was applicable when early retirement was taken because of ill heath reasons and where there was repatriation on medical grounds. The deferred benefit meant that the members could leave their benefit until they reached normal retirement age.

Mr Sidu also listed investments and the investment returns. The Fund also provided housing loans that had a minimum of R5 000.

Mr Joko concluded the presentation by mentioning the major challenges. The Chairpersons of the Board had not been consistent in their approach. Members often  did not inform their family that there were benefits that could be claimed when the member died.

Discussion
Ms N Mathibela (ANC) wanted to know if there was anyone among the ex-mineworkers who knew about these benefits.

Mr Sidu replied that the ex-mineworkers who were terminally ill were actually paid their savings, with interest, from the ill Health Benefit. If they were to die within twelve months of being discharged from the mine, they would be entitled to the Insured Benefit, which was the Retirement Death Benefit and the R10 000 Funeral Benefit.  However if the member left the fund and survived the twelve months he would not be entitled to the Insured Benefit, as he would have been paid all his savings already.

The Chairperson asked how long would it take for a mental illness to start showing symptoms. Furthermore he wanted to know how did the time period of twelve months come about.

Mr Joko replied that this period derived from the National Union of Mineworkers (NUM), who believed that employers should medically repatriate their workers if they were deemed medically unfit for work. It was the Fund that suggested a period of twelve months, as opposed to the eight months that NUM suggested. If the employee should recover within that time period, then he would be allowed back to work.

Ms Nicolette Erasmus, Trustee and Chairman: 1970’s Provident Fund, Mineworkers Provident Fund, said the objective was that as long as the person was an employee he or she would qualify for benefits. However, when the person was no longer employed because of circumstances outside their control, they could then claim those benefits for as long as the insurance cover would allow. Long-term ill health had other compensation programmes.

The Chairperson sketched a scenario, and asked what would happen if an employee were to exit the workplace by choice, and two years later contracted a mental illness because of his work conditions.

Ms Erasmus replied that, although she was not an expert in mental health, her understanding of the legislation around occupational diseases and injuries in mines would compensate for those types of illnesses and injuries.

Mr Joko added that the time period stipulated was not applicable for any illness, but applied to those with a terminal illness. This would be taken as a person who had six months or less to live.

Ms Mathibela asked what would happen if the terminally ill person were to recover or continue to live even after the twelve months.

Mr Joko replied that it was a demand that was put because there was no certainty.

The Chairperson asked for confirmation whether ex-mineworkers had a valid grievance, as stated as the reason for the creation of the ad hoc Committee.

Mr Sidu replied that under the Act, the members would only qualify for the benefits of the Fund in terms of the rules of the fund. If they had qualified then they would have a valid grievance. The only possible applicable claim that ex-mineworkers had was in respect of the retirement savings that were left in the Fund. It was a slim chance that those members who were death or ill-health benefits would in fact be entitled to receive them. The benefits were insured benefits and there were specific rules that had to be applied.

Mr Joko added that it would be difficult for the Fund to judge whether or not the grievance was valid without having the particulars of each grievance.

The Chairperson remarked that the Fund had indicated that there was a file of unclaimed benefits. That meant that some claimants were either untraceable or still needed to be traced.

Mr Joko responded that those claimants had to checked from the list of unclaimed benefits. If they were to generalise, then those that were already paid could claim again.

The Chairperson asked where did the Fund receive its data.

Mr Sidu replied that the data was drawn from the administration systems that the administrator provided.

The Chairperson asked if there was a connection between the two Funds and the Chamber of Mines , or any intention of checking the records of employment between the two.

Mr Sidu explained that the process was that the Chamber of Mines or NUM would go to the employee and offer a number of funds as options. The employee would choose one and become a member of one of the available funds. The Fund had a board of trustees that handled the administration of the Fund without interference from the Chamber of Mines or NUM. They had fiduciary duties and would act in the best possible manner in the interest of the MPF. The Fund, as an entity, could enter into legal contracts with any service provider. Although Teba Limited had a relationship with the unions; their relationship with these two Funds related to tracing those members who did not claim their benefits. All of them were separate entities. Teba Limited had a common relationship only because it was used as a recruitment agency by the mines and used by the Funds as a tracer.

Ms Erasmus added that the Chamber of Mines did not have a database of all the employees who were members of the Fund. Teba Limited had an extensive database of both current and ex-mineworkers that they would provide, and levy a charge for, to the Funds. The Chamber of Mines had payrolls that excluded ex-mineworkers whereas Teba Limited had a member database. When there was a comparison of the Ex-Mineworkers Union and the 1970’s Fund database, eighteen common members were found in both databases.

The Chairperson responded that there was cross coordination between the Funds.  

The Chairperson asked if the Funds had been in contact with the Ex-Mineworkers Union.

Mr Joko replied they would contact the Ex-Mineworkers Union if required to do so. It would be improper of the Funds to just initiate contact with them without actually knowing the people involved. The issue that Mr Nomezele raised was with the unions and not with the Funds.

The Chairperson asked if it was true that the family members of the ex-mineworkers would not be aware of the benefits that were available to them.

The Chairperson asked about the procedures for those ex-mineworkers that could not be reached and informed of their benefits.

The Chairperson wanted to know about the relationship between the Funds, since they were sharing the same client base.

Mr Joko replied that in the past data had been compared between the Mineworkers and the Mine’s 1970’s Provident fund. This had enabled the MPF to locate the mineworkers who could not easily traced.

Mr Kenny Ngosi, Principal Officer: Mines 1970’s Fund, explained that the 1970’s the 1970’s Fund approached the MPF to have a common understanding, since the majority of the 1970’s Fund should be falling within the MPF. A presentation to this effect was made to the regulator that was overseeing the Funds, and it was referred to the Financial Services Board (FSB) but was not successful. This was because of the unclaimed claims that the both funds were burdened with.

Mines 1970’s Provident Fund Briefing
Mr Kenny Ngosi, Principal Officer: 1970’s Fund, began by giving a brief history of the Mines 1970’s Provident Fund. It was established in January 1970 for the those miners that were employed by the members of the Chamber of Mines. By December 1991 there had been a decrease in the membership of the Fund. By September 2001 the Fund only had lapsed members. The sole activity in the Fund was the ongoing tracing and pay-out of lapsed members.

There were various reasons why employees failed to claim their benefit from this Fund. Sometimes, because of the small contribution paid to the Fund, members were not aware that they could claim. Many lapsed members could have been foreign migrant workers that were recruited from outside South Africa. The fact that most of the members cited an incorrect birth date created complications in verifying the identity of ex-mineworkers who had been members of the Fund.

The Financial Services Board was consulted and they advised the 1970’s Fund to establish a database of the lapsed members during 2001. Further action included using the services of the labour recruiting agency Teba Limited, who would visit mines and community centres and who relied on word of mouth. The Fund was provided with a list of names from the database of the Ex-Mineworkers Union and identified eighteen common members.

The current status of the Mines 1970’s Provident Fund was that it was audited annually. The investments of the Fund totalled R200 million at 31 January 2008. The Fund had 59 702 lapsed members that needed to be paid.

Discussion
Ms Mathibela wondered if the mines took down the proper information from their employees.

Ms Mathibela wanted to know what procedures were applicable for those that became ill as a consequence of working in the mines, but who were not working for the mines any longer.

Ms Erasmus replied that there was an initiative between the Chamber of Mines Health Department and other mining groups to track down the ex-mineworkers and screen them for specific illnesses that could have been contracted while working in the mines. That, however, was outside the Provident Funds’ scope.

The Chairperson asked, in the event that the Committee were to propose a solution, what the contribution, other than a financial contribution, from the Fund might entail.

Mr Ngosi replied that the Fund would continue in efforts to trace the ex-mineworkers. The ideal would be to find either the beneficiaries or other family members.

The Chairperson asked if there was any progress on tracing those ex-mineworkers who had failed to claim their retirement saving, utilising the Teba Limited tracing system.

Mr Ngosi replied that the amount of fees that Teba Limited charges was motivation for them to find as many as possible.

Ms Erasmus added that there was a lot of money going out of the Pension Fund. The Fund had sent 2 500 names to Teba Limited. Those names were circulated in the rural areas by Teba Limited, and the ex-mineworkers were asked to report to the nearest Teba Limited office and send documentation and contact details. Teba Limited was only paid once the member had received their proven benefit.

The Chairperson asked if the Fund utilised community centres.

Mr Ngosi replied that there was a possibility of exploitation. There was a community centre based in Welkom where payment would be sent. The cheque would be sent to the centre rather than the person, and many times the beneficiaries would not receive payment. Another issue was the fees varied from one centre to another. There was also a tendency for the centres to charge extra for labour. The 1970’s Fund was alerted to this when it realised that most of the cheques issued were being cashed in one area.

Ms Mathibela asked if the Funds were using the Parliamentary Constituency Offices.

Mr Ngosi replied that the Funds were not aware that they could use the Parliamentary Constituency Offices. Now that they were aware of this, they would try to use them wherever possible.

The Chairperson asked if the problems experienced could be traced back to the miners’ strike in 1987.

Mr Ngosi replied that there were multiple causes for problems experienced and the strike could be one of them. Another reason could be the termination of service.

Ms Erasmus added that one of the suggestions was to publish the names of those who were to receive benefits in the newspapers in South Africa and in the neighbouring countries. However, it would have to be considered whether or not the Funds were at liberty to go to such lengths.

The Chairperson thought that it was a good suggestion. He asked if there was anyone on the Executive Committee of the Ex-mineworkers Union, including its President, who qualified for the benefits.

Mr Joko replied that there were those who were opportunistic. Wherever there was a possibility of an ex-mineworker in the vicinity then that person had to become a member of the Union. Whether or not the members on the executive committee of the Ex-mineworkers Union were eligible to receive benefits from the Fund, they would still receive membership fees from the members of the union.

The Chairperson hoped that the meeting would result in a solution as well as a responsible way to deal with Teba Limited. He suggested that one of the reasons that ex-mineworkers were hard to find could be because ex-miners looking for work could have given false names and addresses to Teba Limited. The responsibility should be assigned to the appropriate stakeholders, rather than spreading the blame and attempting to implicate all the Departments. All those affected should do their part.

The Chairperson commented that the Ex-mineworkers Union was representing only ex-mineworkers. The Committee had to consider how best to provide solutions and avoid opportunistic elements. It was necessary to monitor the situation closely, otherwise a number of organisations would surface claiming to represent ex-mineworkers.

Mr John Winson, Trustee: Mines 1970’s Fund, commented that NUM was represented throughout the country and should have a database with all of its members, and should be able to ensure or inform their members that they were liable for benefits.

The Chairperson thought that it was a good suggestion. However, when the Committee had met with NUM, that organisation had indicated that they did not want to get involved with ex-mineworkers, as they did not consider themselves representative of this group.

Mr Joko suggested that a list of all the Fund members that did not claim their benefits be forwarded to the Department of Labour, for it to assist in locating those members. He added that the Fund had tracers in the neighbouring countries such as Lesotho. The numbers of people claiming their benefits had not dropped as low as the Committee would have liked. He felt that utilising government sources would be helpful.

The Chairperson responded that it was a good idea. He added that the Labour Departments across the country should be furnished with a list of untraceable members, which could be checked whenever queries were made by individuals at the departments.

Mr Joko added that there was some confusion regarding the benefits. Some ex-miners believed that if they had been working in the mines for approximately forty years they would receive substantial amounts of money. They were confusing benefits under the provident funds with the Long-Term Reward benefit that was applicable to those working in the gold mines. Application could be made for this benefit at the Teba Limited offices. The benefit was only received after sixty years. It was not a lot of money as it was based on a formula.  Teba Limited would facilitate the receipt of the funds by contacting all the mines that the person had worked for.

Mr Winson suggested that Teba Limited provided further information and documentation on the Long-Term Reward benefit.

The Chairperson agreed with his suggestion.

Ms Erasmus commented that there were approximately 100 000 members that had unclaimed benefits from the fund, and agreed that it would be useful to have a list with the Department of Labour.

The meeting was adjourned.