Impact of Pensions Restructuring on GEPF PSCBC Resolution 12 of 2002 August 2003

1
Impact of Pensions Restructuring on
GEPFPSCBC Resolution 12 of 2002 August 2003
2
Points Covered

• Scope of Changes (What)
• Procedures and Rules for Changes (How)
• Implementation Status Update (What and When)
• Generic GEPF Procedures for Interaction (How)
• Status of Pensionable Service Projects

3
Scope of Changes

• Changes to Existing Benefits Payable
• Annual Pension Increases
• Registration of Spouses
• Optional Increase of Spouses Pension
• Cost of Purchasing Service (POS)
• Interest Payable by GEPF
• Changes to Admin. Rules
• Board Contribution Rate Bargaining
  requirement
• New Benefits Payable
• Funeral Benefits
• Orphan Pension

4
Changes to Annual Pension Increases (01 April
2002)

• 1 April each year.
• 75 of average increase in CPI over 12 months
  ending 30 November.
• 7 for 2003.
• Additional Catch-up increases annually when
  less than minimum level of 75 of annuity at
  retirement adjusted for full inflationary
  increases
• Actuaries performing calculations to publish
  increases by 06 Aug. 2003
• Implementation by GEPF to reflect in Pension
  Payment in October 2003
• 18 Months arrears payable by end October
• Pensioner communication

5
Changes to Existing Benefits Spouse Pension(01
Dec. 2002)

• Act References
• Definition of a Spouse which includes a Life
  partner
• Marriage Act 25 of 1961 Customary Marriages Act
  12 of 1998
• Business Rules
• Need to register Spouse before claim is raised
• only one Life Partner (includes same sex life
  partner )
• Multiple spouses (Civil Customary Union or
  Religious).
• Cannot be married and have a life partner
• Once-off irrevocable choice as member with 10
  years of Pensionable Service before
  Retirement/Discharge for option of 75 (vs. 50)
  Spouse Pension

6
Changes to Existing Benefits Spouse Pension

• EXAMPLE For a member with 31 years of
  pensionable service who retire aged 60. Final
  salary R 95 000.

7
Changes to Existing Benefits - Spouse

• Forms and Attachments
• Choice form for Spouse Pension Option with Z102
• Z864 for Registration and De-registration
• Z143 for Applying for Spouses Pension
• Attachments Certified IDs (Preferable Barcoded)
  Marriage Certificate (from Home Affairs)
  Affidavit for Life Partner Death Certificate

8
Changes to Existing Benefits POS(01 Dec. 2002)

• Act References
• Rule 10.2 and 11.2 of the GEPF act applies.
• Business Rules
• F(x) factor Values that are cost neutral to GEPF
  Fund (when Fund is valuated)
• Leave Without Pay period in excess of 120
  calendar days
• Other Periods of Service period after the age of
  18 that was not pensionable
• Previous Service Break break must be lt36 months
  and should apply within 1Year
• Forms and Attachments
• Z215 for Application
• Attachments A copy of the members personnel
  record card and salary slips before and after the
  break in service (for Leave without Pay) Proof
  of Benefit Received (Z102 and other docs.)

9
Changes to Existing Benefits Interest (Date of
Gazetting)

• Act References
• Section 26 of the GEPF Law.
• Business Rules
• Interest payable on late Payments only (after 60
  days of withdrawal).
• Interest is calculated from date of withdrawal
  from fund (last day of service) and not after
  receiving duly completed Statement
  (documentation)
• Forms and Attachments
• Indicated Separately on Payment Advice

10
Changes to Admin. Rules

• Method to Calculate EMPLOYER CONTRIBUTION RATE
  (01 April 2002)
• Varying depending on Fund valuation.
• Minimum funding level of 90.
• Determined by Employer in consultation with
  Board.
• No impact on benefits.
• Requirement for Bargaining on Rule Amendments
  (Date of Gazetting)
• Bargaining requirement removed for Administrative
  Aspects

11
Changes to Admin. Rules Board (01 Dec. 2002)

• Employee nominees
• Labour Caucus in PSCBC nominates six (plus
  alternates).
• Employees in SANDF NIA and SASS Intelligence
  Services nominate one (plus alternate)
• Pensioner Nominee
• Proposals from IEC (overseeing process) and EISA
  being evaluated
• Process will take at least 6 months
• Documentation for the trustee inception programme
  initiated (Rules Procedures Responsibilities
  Training requirements etc.)
• Employer nominees
• Minister of Finance nominates eight after
  consultation with specified Ministers.
• DPSA facilitating the process

12
New Benefits Payable Funeral Benefit(01 Dec.
2002)

• Act References
• Definition of a Pensioner Member Spouse (Life
  Partner) and Eligible Child
• Business Rules
• Covered Member Pensioner Spouse Eligible
  Child
• Entitled to Money Member Pensioner Spouse
  Major Child Brother/Sister and Parents of Member
  or Pensioner
• Applicant Member Pensioner Spouse Eligible
  Child Parent Guardian executor of Estate
• Application directly with GEPF

13
New Benefits Payable Funeral Benefit

• Business Rules (continue)
• Pensioners qualify if became a pensioner after 01
  Dec. 2002
• R 7 500 for death of a member or pensioner.
• R 7 500 for death of a spouse.
• R 3 000 for death of a each eligible child.

14
New Benefits Payable Funeral Benefit

• Business Rules (continue)
• No limit in number of covered people
• Benefits are payable irrespective of order of
  deaths
• Taxation as per Income Tax Act
• Payments to one entity only
• Payments to Post Office Preferred for 48 hours
  lead time alternatively Elect. Bank Transfers
• No Interest is Payable by GEPF
• No nominations required for People Entitled to
  Funeral Benefit
• Forms and Attachments
• Compulsory Z300 with ID (Preferable Barcoded)
  Death Certificate and other optional attachments

15
New Benefits Payable ORPHANS PENSION (01
Dec. 2002)

• Act References
• Definition of Eligible Child
• Section 14 of the GEPF Law
• Business Rules
• Covered eligible children upon the death of a
  member or pensioner (where pensions commenced
  after 01 December 2002) where no other parents
  exist
• One child 20 of pension.
• Two children 30 of pension.
• Three and more children 40 of pension.
• The above is doubled when Spouse is last
  surviving Parent

16
New Benefits Payable ORPHANS PENSION

• Business Rules (Continue)
• Payee major orphan Master or the Supreme Court
  for administration Guardian of a minor child
  and/or Trust Fund.
• Only for members with more than 10 years of
  Pensionable Service
• Eligible child
• Natural or adopted (as meant in the Child Care
  Act 74 of 1983 as amended - an adoption order).
• Alive and under 18.
• Under 22 if full time student
• Over 18 disabled and financially dependent.
• Will use Life Certificates
• Adjustments to Amount Payable when Number of
  Orphans changes

17
New Benefits Payable ORPHANS PENSION

• Forms and Attachments
• Z143 for Application
• Attachments Death Certificate Certified ID
  (Preferable Barcoded) of Deceased applicant and
  Children bank form (Z894) and other attachments

18
New Benefits Payable Dormant Membership

• Disallowed from 1 April 2003.
• Existing Dormant members are still recognised.

19
Status Update (Components where Bargaining is
completed)

• Trustees Approval obtained for Rule Amendments
• Gazetting within August 2003
• Resolution 7 of 2002 (Severance Packages)
  Pension Increase and Spouses Pension Implemented
• Other GEPF system and Procedural Changes
  Scheduled for August 2003

20
Status Update (cont) (Components where
Bargaining is completed)

• Internal GEPF Education (In Progress/Constant
  Effort)
• External Communication to Members and Pensioners
• Road show From August 2003
• Booklet Done (Distribution during August 2003)
• Poster (A2 Size)
• News Letters every 6 months
• GEPF Website Publications (Ongoing)
• New Version of Employer Procedure Manual To be
  Initiated

21
Status Update (cont) (Components where
Bargaining is completed)

• External System Changes Initiated (PERSAL/PERSOL)
• Will Handle Backdated cases first
• Spouse (and Dependants) Registration In
  progress and On-going
• Pension Increase catch-up Payment at End of
  October 2003

22
General GEPF Interaction Procedures

• General Business Rules
• Backdated cases will be entertained and
  prioritised according to date received eg.
  Funeral benefits payable
• A separate Application Form for each covered
  person eg. Spouses Pension Application
• Claims must be submitted to the GEPF as soon as
  possible (Members Pensioners and Employers)
• Personal
• Regional Offices (BISHO MAFIKENG and POLOKWANE)
  or Head Office accompanied with specified
  documentation
• Telephonic
• Tel Number [phone] Call Centre (012)
  319 1000

23
General GEPF Interaction Procedures

• Fax
• Only for Initiating Funeral Benefits Claims and
  General Enquiries
• Paper Based (Post or Deliver)
• Legible Originals to be Scanned
• E-mail (enquires_at_gepf.co.za)
• Only General Enquiries (not Case Specific)
• www.Gepf.co.za

24
Pensionable Service Projects

• Industrial Strikes - Ciskei
• Validation Completed using set criteria
• 1156 case have insufficient Information (to be
  reviewed)1952 Accepted No other cases will be
  accepted other than the fixed list coordinated
  by Premiers Office

25
Pensionable Service Projects

• Industrial Strikes Ciskei (Continue)
• Actuaries Cost Valuation Done
• Implementation upon Cost and Funding Approval

26
Pensionable Service General Assistants
(Appointed before 1994)

• PSCBC Resolution 12 of 2002 as contemplated in
  clause 7.2.2 of the PSCBC Resolution 7 of 1998.
  Furthermore process the payment of eligible
  employees within a period of 18 months (from 01
  Dec 2002)
• PSCBC Resolution 7 of 1998 7.2.2 the amount
  needed to increase to actual service the
  pensionable service of former general assistants
  who
• a) are now permanent employees of the employer
• b) had a stable and continuous employment
  relationship in the public service for at least a
  year immediately before they became permanent
  employees and
• c) due to past measures that discriminated on the
  basis of race were employed as casual employees
  and therefore did not belong to a government
  pension fund.

27
Pensionable Service General Assistants

• Current Scenario
• Validation Completed using set criteria
• Existing applications 7285 of 24431 accepted
• Actuaries Cost Valuation Done Awaiting PSCBC
• Audit/Marketing Task Team to be established
• Task team
• Need union and employer representatives in each
  Province.
• Coordination via Contact at Premiers Office and
  DPSA
• Need co-operation from Departments

28
Pensionable Service General Assistants

• Who does not Qualify
• Persons who were appointed with Waiting periods
• Where there were delays in Admittance to fund
  (Should be prior 1994)
• Persons who also were/are members of other Funds
• Casual Laborers versus Piece Workers
• How to apply
• Forward list of names and documentary proof
  (application form and attachments) to the
  representative at the the Premiers Office
  Application for Non-contributory Pensionable
  Service (PSCBC Resolution 7/1998)

29
Pensionable Service General Assistants

• Acceptable proof in order to confirm a members
  service date
• Payment sheets
• Appointment Advice
• Salary advices
• Staff Record Cards
• Leave Cards
• Where there is not acceptable documentary proof
  the case must be referred to the Task Team for
  qualification

30
Pensionable Service Employees affected by Venda
Pension Fund

• 1. Referred to PSCBC Task Team Pension
  Restructuring.
• 2. Task Team to develop proposals

31
(No Transcript)