Question NW1900 to the Minister of Finance

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23 November 2020 - NW1900

Profile picture: Wessels, Mr W

Wessels, Mr W to ask the Minister of Finance

(1)What is the prescribed period within which a member of the Government Employees Pension Fund (GEPF) should receive the first retirement payment after completing and submitting all relevant documentation; (2) what (a) number of members of theGEPF have been affected by delays in first payments after retirement in the each of the financial years from 2010-11 to 2019-20 and (b) were the reasons for each of the specified delays; (3) what was the total amount of interest paid due to the late payments since the 2010-11 financial year; (4) whether the GEPF has put in place any measures to ensure that delays in the payment of pensions are mitigated; if not, why not; if so, what are the relevant details; (5) whether he will make a statement on the matter?

Reply:

1. A benefit is payable to a member, pensioner or beneficiary entitled to such benefit within a period of 60 days from the benefit becoming payable to the member, pensioner or beneficiary.

2. (a)The under mentioned table details the retirements paid within 60 days and those retirements paid outside of 60 days

Financial Year

Total Retirement Cases Paid

Claims paid within 60 days

% age paid within 60 days

Claims not paid within 60 days

%age Not paid within 60 days

2011

23,913

23171

97%

742

3%

2012

29,391

26830

91%

2,561

9%

2013

27,699

22849

82%

4,850

18%

2014

29,546

22043

75%

7,503

25%

2015

28,802

24797

86%

4,005

14%

2016

31,845

27693

87%

4,152

13%

2017

32,196

26848

83%

5,348

17%

2018

35,571

29966

84%

5,605

16%

2019

35,931

32236

90%

3,695

10%

2020

34,134

29944

88%

4,190

12%

(b) The reason for delayed benefit payments varies and arises due to many factors.  The delays amongst others include:

  • Claim documentation has not yet reached the GPAA. Claimants should ensure that their HR departments send all required documentation to the GPAA once finalised
  • Incomplete or incorrect documentation which requires the documents to be referred back to employee departments for rectification
  • Incorrect payment information such as incorrect bank accounts which results in bank verification process failing thereby payment cannot be made
  • GPAA awaiting tax directives from SARS before payment is made.
  • Issues with members’ tax affairs requiring members to attend to these with SARS. Member’s tax affairs need to be in order to ensure that the required tax liability is paid over to SARS before benefits can be paid to members.
  • Required divorce documentation outstanding to pay benefits
  • Other reasons pertaining to specific claims.
  • The impact of the lockdown regulations has impacted operational activity of the GPAA since March 2020.

3. The table below depicts the interests paid in respect of all benefits paid by the GEPF and not specifically in respect of retirements only. The interest paid would be in respect of retirement, resignation, death, ill-health retirement, and transfer benefits.

Financial Year

Benefits Paid for the year

R’000

Interest Paid for the

R’000

2010 – 2011

31 098 727

653 748

2011 – 2012

35 581 583

881 093

2012 – 2013

39 769 902

756 179

2013 – 2014

52 570 775

1 158 520

2014 – 2015

78 341 762

1 421 880

2015 – 2016

85 196 350

1 845 820

2016 – 2017

86 290 613

1 883 182

2017 – 2018

91 071 319

1 954 491

2018 – 2019

94 876 686

1 469 311

2019 – 2020 (Unaudited)

108 742 851

1 752 019

4. The Government Pensions Administration Agency (GPAA) which administers payments for the Government Employees Pension Fund (GEPF) like many other organisations, was negatively impacted by the Covid-19 pandemic. In support of the national agenda in combating COVID-19 the entity was also initially closed for a short period of time during the first lockdown until it was subsequently classified as an essential service. The GPAA has implemented various measures to increase production since the declaration of the National State of Disaster.

These measure include:

• The acquisition of additional technology and mobile devices to enable and increase remote working arrangements;

  • A combination of remote working and staff coming into the office is being followed in order to ensure improved capacity;
  • Implementation of automation of processes, where possible, to allow for faster capability in processing of pension claims;
  • A dedicated focus on processing pension retirement claims to accelerate claims of retirees.
  • Continuous improvement of processes are being attended to allow for remote and faster capability of processing of claims

It is important to emphasise that these initiatives notwithstanding, service to members, pensioners and beneficiaries is impacted by COVID-19 and delays may still be experienced as staff contract COVID -19.

5. It is not necessary for the Minister to make a statement on the matter as there has been acknowledgement by the GEPF and GPAA of late payments.

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