1. Government Employees Pension Fund
Presentation to
The Portfolio Committee on Finance on
The Government Employees Pension Law Amendment Bill, 2004
8 September 2004
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2. Government Employees Pension Fund
The following will be dealt with in the presentation:
Purpose of the presentation
Purpose of the Bill, 2004
The contents of the Bill
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3. 1. Purpose of Presentation
To provide information on the proposed amendments to the Government Employees Pension Law Amendment Bill, 2004.
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4. Government Employees Pension Fund
2. Purpose of the Bill
The purpose of the Bill, 2004 is to align the Law with the negotiated amendments contained in PSCBC Resolutions 12 of 2002 and 7 of 2003 that were concluded in the PSCBC in November 2002 and November 2003 respectively.
The Bill provides for amendments to the benefit structure of the Government Employees Pension Fund (GEPF).
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3. The Bill provides for:
3.1 The correction of errors: Sections 1 and 23
The definition of ‘dependant’ in section 1 of the Law is amended by deletion of the word ‘moment’ after the word ‘time’.
Section 23 of the Law is amended by insertion of the word ‘to’ after the word ‘payable’.
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The amendment of errors: Section 30A
The service of members in the former non-statutory forces and services can, on application, be recognised as pensionable service for purposes of pension benefits paid by the GEPF. (The Law was amended by Act, 35 of 2003.)
Section 30A provides that where a former NSF member, whose NSF service has been recognised as pensionable service, has received a benefit in terms of the Special Pensions Act, 69 of 1996, the benefit payable by the Fund shall be reduced in accordance with the rules.
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A similar provision, with reference to demobilisation benefits (in terms of Act 99 of 1996), was by mistake omitted from section 30A at the time of enactment of Act 35 of (The intention was to refer to both special pensions as well as demobilisation benefits.)
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3.2 The amendment of the definition of ‘matters of mutual interest’ in section of the Law
The definition of ‘matters of mutual interest’ currently refers to ‘all matters dealt with in the Law and rules’
The amendment makes clear that collective bargaining does not apply to non-benefit related amendments
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3.3 The amendment of section 21 of the Law
The amendment enables the Fund to:
provide for guarantees to members in respect of home loans by registered financial institutions or otherwise approved institutions.
deduct from the benefits payable by the Fund any amount, plus interest, due to the Fund in respect of an amount for which the Fund becomes liable under a guarantee furnished in respect of a member.
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3.4 The amendment of section 22 of the Law
The word ‘prescribed’ in relation to prescribed forms is deleted.
The amended section will refer to ‘applicable’ forms of the Fund instead of ‘prescribed’ forms.
‘Prescribe’ means prescribe by rule – section 1 of the Law.
The Board has never ‘prescribed’ any forms to be used by the Fund or the contents thereof.
(The forms used by the Fund and the contents thereof are determined from time to time in accordance with the business and administrative needs of the Fund and electronic systems used by the Fund.)
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3.5 The amendment of section 25 of the Law
The phrase ‘in terms of its pension increase policy’ is inserted at the end of section 25(1).
This amendment specifically provides for the Board to deal with annual pension increases in terms of a policy determined by the Board.
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3.6 The amendment of section 26(2)
The Fund shall pay interest on any part of the amount of the benefit not paid within 60 days of the benefit becoming payable, calculated from the date following the day that the benefit becomes payable (last day in service, date of death, etc.).
In terms of the current section 26(2), interest is payable on any part of the benefit not paid within days of receipt of duly completed statements.
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The amendment of section 26(2) - cont
The purposes of the amendment to section 26(2) is for interest to accrue to the member, pensioner or beneficiary after sixty days of the member, pensioner or beneficiary becoming entitled to the benefit irrespective of when the GEPF receives the relevant duly completed documentation.
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3.7 The amendment of section 26(1)
The amendment to section 26(2) by implication necessitates an amendment to section 26(1) of the Law.
Section 26(1) will no longer refer to the receipt of duly completed statements but to the date on which the benefit becomes payable to the member, pensioner or beneficiary.
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3.8 The amendment of section 26
Section 26(4) is inserted to provide that interest shall not be paid on funeral benefits payable by the Fund.
The fund aims to pay funeral benefits within days after the submission of a valid claim.
The payment of interest will not result in a material advantage to the person so paid but may result in an additional administrative burden on the Fund which may indeed delay the payment of such benefits.
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3.9 The amendment of section 27
The amendment provides for the abolishment of the provision allowing members to be granted the option to hold dormant membership status to the Fund.
The amendment is to be effective retrospectively as from 1 April 2003.
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Thank You
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