Presentation to the Portfolio Committee RESTRUCTURING OF PENSION PROVISIONING FOR PUBLIC SERVICE EMPLOYEES 19 August 2003

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Presentation to the Portfolio Committee
RESTRUCTURING OF PENSION PROVISIONING FOR PUBLIC
SERVICE EMPLOYEES19 August 2003
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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.

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SUMMARY NEGOTIATED CHANGES

• New benefits
• Orphans 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
• .
• .
• .

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SUMMARY NEGOTIATED CHANGES

• Changes to the funds 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

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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)

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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

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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

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STATUS UPDATEBOARD 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.

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STATUS UPDATEPENSIONABLE 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.

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STATUS UPDATEPENSIONABLE 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

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STATUS UPDATEADMINISTRATION OF NEW BENEFITS

• GEPF Employer Procedure Manual and business rules
  updated
• Other GEPF system changes underway
• PERSAL system changes initiated

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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

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NSF SERVICE

• Original dispensationRecognition 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

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THE END