1 LEGISLATIVE PROPOSAL TO AMEND THE PUBLIC OFFICE BEARERS AMENDMENT ACT BY MS S A SEATON (MP) MAY 2008

2 OBJECTIVES OF LEGISLATIVE PROPOSAL: The legislative proposal seeks to address the inadequacies of the Remuneration of Public Office Bearers Act, 20 of This will be done through the payment of gratuities and pensions to public office bearers, under certain circumstances and using more appropriate calculations.

3 SUBSTITUTION OF SECTION 8 (1): Includes in the payouts against the pension fund, certain gratuities. The provisions of these gratuities will be explained in the insertion of Section 8A in the Act.

4 INSERTION OF SECTION 8A: Section 8A deals with gratuities payable to office bearers after retirement or removal from office on the grounds of infirmity.

5 INSERTION OF SECTION 8A (1) – GRATUITIES: Section 8A deals with the payment of gratuities to MP’s after retirement or removal from office because of infirmity. The gratuity serves as a supplement to the pension received by members. To be eligible, the member concerned needs to have a minimum of 5 years of pensionable service.

6 SECTION 8A (1) – THE FORMULA: The gratuity will be calculated according to a fixed formula that takes into account the salary of the member at the time of his or her retirement and the years of pensionable service of that member, which, for the purposes of the formula, shall not exceed 20 years. The formula is as follows: Salary of the member X 2 X Pensionable Service Years ___________________________________ 15

7 DETERMINATION OF GRATUITY: Years of pensionable service Salary of Member (Rand)Gratuity (Rand)

8 SECTION 8A (2): The total amount of the gratuity paid to the member SHALL NOT be more than three times the highest salary earned by the member during his pensionable service.

9 IINSERTION OF SECTION 8A (3): To be eligible for the payment of the gratuity upon resignation, the member must have completed at least 5 years of service. No gratuity shall be payable to members with less than 5 years of service.

10 INSERTION OF SECTION 8A (4): The calculation of the gratuity shall be rounded off to the end of the month in which the member resigns, and no fractions will be used.

11 INSERTION OF SECTION 8B – PENSIONS: Section 8B deals with the Pension of the Members. The pension will be calculated according to a formula that takes into account the salary of the member at the time when he or she resigns and the amount of pensionable service years. The formula is as follows: Salary of the Member X Pensionable Service Years __________________ 15

12 CALCULATION OF PENSION: Years of ServiceSalary of Member (Rand) Pension (Rand)

13 INSERTION OF SECTION 8B (2): If the member has completed five years of pensionable service, he or she is entitled to a 1/3 of her salary as pension. If the member has completed ten years of pensionable service, he or she is entitled to 2/3 of his or her salary as pension. If the member has completed fifteen years of pensionable service, he or she is entitled to 100 % of his or her salary as pension.

14 INSERTION OF SECTION 8B (3):  If the member should die, the period of service will only cease on the first day on the month following the month that he or she died.

15 INSERTION OF SECTION 8B (4): No portions of months will be used to calculate the pension. Severance: A member shall be entitled to a severance amount equal to 80 % of a members’ salary at the time of exit payable for a period of 3 months, following the exit.

16 INSERTION OF SECTION 8B (5):  The Minister shall make pension payments from revenue at intervals which he or she shall determine.

17 INSERTION OF SECTION 8C – SUSPENSION UPON RE-APPOINTMENT: If a retired member is re-appointed into office, any pension payouts due to him or her shall be halted, and recalculated in terms of section 8 B and become repayable when the re-appointment ceases.

18 INSERTION OF SECTION 8D (1) – PENSIONS PAYABLE TO WIDOWS OR WIDOWERS: Should the member who receives a pension payout in terms of the act or who is in pensionable service, die, the widow or widower of that member shall receive the pension of that member on the first day of the month following the death of that member. In the case of a member who has already retired, 75 % of the existing pension shall be paid out to the widow or widower. In the case of a member who has not yet retired, 75 % of the pension that the member would have been entitled to if he or she had retired on the date of this or her death.

19 INSERTION OF SECTION 8D (2): Payment of the pension will only be made on the first day of the next month after the members death.

20 INSERTION OF SECTION 8E – GRATUITIES PAYABLE TO WIDOW OR WIDOWER: This section deals with gratuities that are payable to the widow or widower of the member in the event of his or her death whilst in pensionable service or after retirement from pensionable service. The gratuity shall be calculated in terms of section 8A and as if the member had not died but rather retired on the date that he or she died.

21 INSERTION OF SECTION 8E CONTINUED: The gratuity shall be payable to the widow or widower in addition to the pension that shall be paid out. In the event where the member does not have a widow or widower, the gratuity shall be paid into the estate of the member.

22 DISCUSSION: QUESTIONS AND ANSWERS SECTION

23 THANK YOU