Presentation to the Portfolio CommitteeRESTRUCTURING OF PENSION PROVISIONING FOR PUBLIC SERVICE EMPLOYEES19 August 2003
BACKGROUND • Public Service Co-ordinating Bargaining Council resolved to investigate the restructuring of pension provisioning for public service employees, consideration was given to- • pay as you go schemes; and • defined contribution schemes etc • A further collective agreement was signed on 30 November 2002. • The collective agreement provides for amendments to the Rules of the Government Employees Pension Fund. Changes to the Government Employees Pension Law, 1996 are also needed.
SUMMARY: NEGOTIATED CHANGES New benefits: Orphan’s pension Funeral benefits Changes to existing benefits: Annual pension increases to pensioners now guaranteed New definition of spouse to include life partners Higher spouses pension option Cost of purchasing service more affordable Interest on late payments calculated differently Dormant membership phased out . . .
SUMMARY: NEGOTIATED CHANGES • Changes to the fund’s operation and management rules: • Floating employer contribution rate introduced • Composition of Board of Trustees changed to expedite appointment of trustees • Removal of bargaining requirement on some rule changes
OTHER NEGOTIATED PROVISIONS • Pensionable service increases: • Former General Assistants (casual employees) • Employees eligible under strike settlement agreements • Recognition of NSF service • Investigation into impact of former Venda Pension Fund dissolution • Transfer of former Municipal Police employees into the GEPF (Managed by SAPS)
STATUS UPDATE • Implementation is done jointly by DPSA and GEPF • Amended GEPF Rules: Government Gazette 25247 dated 8 August 2003 • Legislative process underway • PSCBC Task Team reconvened to facilitate implementation
STATUS UPDATE • Communication: • Communication material developed and published • DPSA Circular to departments • Membership Booklet • Posters • www.gepf.co.za • Road show to all provinces / departments currently underway
STATUS UPDATE:BOARD OF TRUSTEES • Eight employer nominees: • Process document for appointment of employer nominees is finalised. • Eight employee nominees • Labour caucus in PSCBC was notified to appoint 6 employee nominees • Defence and Intelligence Services to assist nomination of 1 employee trustee • 1 Pensioner representative appointment process assisted by IEC and EISA • Documentation for trustee inception programme under development.
STATUS UPDATE:PENSIONABLE SERVICE • General Assistants: • Process continue for validated cases • Employer position on percentage of service recognition under finalisation • New process commenced to ensure that all eligible employees are in the net. • Joint employer and union task teams appointed on national and provincial level, to assist with identification and validation process. • Strike settlement agreements • Process continue to recognise service for eligible employees.
STATUS UPDATE:PENSIONABLE SERVICE • NSF Service recognition • Require legislative amendments • Portfolio Committee: Finance requested development of new proposals • Improved dispensation and funding proposals under consideration by Minister of Finance. • Way forward: • Buy-in from Portfolio Committee: Finance • Negotiation mandate • Collective agreement • Accompanying legislative amendments
STATUS UPDATEADMINISTRATION OF NEW BENEFITS • GEPF Employer Procedure Manual and business rules updated • Other GEPF system changes underway • PERSAL system changes initiated
STATUS UPDATEOTHER MATTERS • PSCBC referred investigation on Venda Pension Fund impact back to a Task Team • Further discussions between DPSA and GEPF to develop concrete proposals on delays in pension payments • A multi-pronged approach is needed
NSF SERVICE • Original dispensation:Recognition on sliding scale • Less than 10 years: 33.3% of service • More than 10 but less than 20 years: 80% of service • Twenty years and above: 100% of service • Employee contribution of 7.5% • Improved dispensation: • Less than 10 years: 50% of service • Ten years and more: 100% of service • No employee contribution-decision to be finalised