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IOL News
5 days ago
- Business
- IOL News
Public Sector Pension Bill aims to simplify payments of post-retirement benefits for public servants
The National Assembly has approved the Public Sector Pension and Related Payments Bill, aimed at simplifying pension payments for public servants, Image: File photo. THE National Assembly has approved the Public Sector Pension and Related Payments Bill, which is aimed at simplifying how pensions and related post-retirement benefits are paid to public servants. The Bill will now be referred to the National Council of Provinces for concurrence. The legislation, introduced by the Minister of Finance as part of the 2025 Budget, proposes that public sector pension, post-retirement medical, and other benefit obligations become direct charges against the National Revenue Fund (NRF). This change seeks to streamline administration and avoid delays in payments, according to Parliament. Parliament said in a statement that 'the current payment system makes it difficult for National Treasury to pay the benefits, as there are administrative requirements to track which department each retired claimant worked in, causing delays and complications.' Trade union federation, the Congress of South African Trade Unions (Cosatu) supports the Bill. 'We were fine with the Bill as it is largely an administrative one that does not have any adverse impact or threaten public sector pensions and related payments,' said Cosatu Parliamentary Coordinator Matthew Parks. 'We are comforted by it correctly recognising that the state is responsible for all public sector and related pension payments. This is crucial to protect workers and pensioners.' Parks added that Cosatu was also reassured by the Bill's support for collective bargaining processes. 'We are pleased that it affirms the role of collective bargaining processes and agreements where matters affecting public sector pension funds are discussed and resolved with organised labour,' he said. 'We have been reassured by Treasury to this effect as well.' He concluded: 'We are confident that Parliament will conclude the passage of the Bill before the deadline and thus pension funds will remain protected.' However, the Public Sector Coordinating Union (PSCU) raised several concerns about the Bill's structure and safeguards, especially a clause that Parliament's Standing Committee on Appropriations had also flagged. The Standing Committee had noted that while it supported the Bill, it had concerns with a clause that says, 'If Parliament does not approve or reject changes to the list of benefits within three months, those changes will automatically become law.' The committee said it 'does not agree with this and asked the Minister of Finance to remove that clause in the next round of changes.' The PSCU echoed this criticism. 'This is a dangerous loophole. The PSCU unequivocally rejects the clause that allows benefit changes to pass automatically if Parliament procrastinates,' said Tahir Maepa, a PSCU representative. 'This is a betrayal of workers' trust. Pensions are a lifelong commitment, not a policy loophole that can be manipulated without due regard.' While cautiously supporting the Bill's intention to place pensions directly on the NRF, Maepa warned: 'We conditionally support placing pensions and post-retirement benefits on the NRF, as it should address delays and underfunding. However, we caution the government that this cannot be used as an excuse to freeze wages, reduce job opportunities, or privatise services. Workers' deferred wages must be legally protected from austerity measures.' He added that the Bill's success depends on firm guarantees. 'The Bill's promise of efficiency is meaningless without penalties for late payments to retirees; a union seat at the table to monitor the implementation of the Bill; and strong anti-cut protections embedded in the law itself.' 'If the government disregards our concerns, we will mobilise our members and challenge this Bill in every forum, including courts, public spaces, and Parliament,' Maepa said. THE MERCURY
IOL News
23-06-2025
- Business
- IOL News
Public sector union raises alarm over severe financial mismanagement of pension funds
the GPAA administers the pension affairs of approximately 1.7 million government employees and pensioners, as well as the affairs of their spouses and dependants. Image: File Photo The Public Service and Commercial Union of South Africa (PSCU) has issued a stark warning regarding the alleged financial mismanagement of pension funds amounting to more than R500 million at the Government Pensions Administration Agency (GPAA). In a letter to the GPAA CEO Kedibone Madiehe over the weekend, the PSCU requested clarification and remedial measures in response to the troubling findings of the pension administrator's Internal Audit Report for the 2024/25 financial year. The GPAA is a government component which reports to the Minister of Finance and administers funds and schemes on behalf of the Government Employees Pension Fund (GEPF), the largest pension fund in Africa. It thus administers the pension affairs of approximately 1.7 million government employees and pensioners, as well as the affairs of their spouses and dependants. The internal audit report was compiled by Abacwaningi Business Solution (ABS) Audit & Advisory Services and found a raft of key governance concerns, which they brought to the attention of management to ensure sound governance. According to the PSCU secretary general, Tahir Maepa, this report not only highlights gross financial mismanagement but also hints at potential criminal conduct that necessitates urgent strategic intervention. 'The report reveals severe financial mismanagement, governance failures, and potential criminal conduct that demand urgent intervention,' said Maepa in the letter. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading The PSCU is questioning the apparent discrepancy between the reported R15.3 million irregular expenditure and the R30.8m logged in the internal register. The union is pressuring for a full disclosure of the irregular expenditure report to understand this contradiction. The union pointed to a seemingly innocuous purchase order of R67m, which ballooned into a staggering R495m lease liability. It raised questions over the motivations behind signing this contract post-audit (23 May 2025), complete with a backdated commencement date (31 July 2024). The leasing agreement was concluded between LCS and GPAA, signed by Lerato Molefi from LCS and previous acting financial officer, Kgaile Molebatsi. 'Not only does this contract commit GPAA to a very expensive project without budget, the current and future objectives by GEPF and GPAA to modernise were not considered,' reads the audit report. 'How does a purchase contract of R67 135 442 translate to an additional R428 255 112.72, making this contract a R495 390 554 project, half a billion rands?' The PSCU is now demanding evidence of Supply Chain Management compliance and the National Treasury approval. The PSCU also raised serious concerns regarding R11.9m in prepayments, an additional R6.8m for undelivered uniforms, and a R12m NPS system devoid of deployment evidence. It said action was needed on this to recoup these substantial losses. According to the union, member data appeared to have been shared unlawfully with service providers, exemplifying a gross breach of the Protection of Personal Information Act (POPIA). It alleged that ICT projects were executed without ICT department oversight, risking system integrity. Provide all contracts, invoices, and approval documents for the LCS, Jicho, LSG, and Shula contracts. The PSCU now requests all pertinent contracts, invoices, and approvals regarding multiple contracts, alongside confirmation of any forensic investigations initiated as per the audit recommendations. The union has taken a firm stance, declaring that a written response is required within a mere seven working days. Should there be no satisfactory reply, the union warned of escalating the matter to various governmental watchdogs, including the Minister of Finance, the Standing Committee on Public Accounts (Scopa), and the Public Protector, alongside the Hawks—South Africa's Directorate for Priority Crime Investigation. Madiehe and the GPAA were not immediately contactable over the weekend. The 66-page audit report by the ABS Audit & Advisory Services confirmed the concerns raised by the PSCU by giving each of the The auditors recommended, among others, that all contracts issued without budget availability be regulated by seeking approval from the GEPF and that all contracts be vetted by GPAA legal chief director and amended to include risk management clauses to protect the GPAA. 'We advise that consistent and continuous compliance is required to ensure reasonable reliance on controls currently in place; and to ensure the consistent attainment of business objectives, and to meet the requirements of the laws and relevant regulations. Furthermore, where the management of risk, control and governance is considered requiring improvement, management should ensure that the residual risks and management concerns are appropriately addressed,' concluded the auditors. 'By addressing the weaknesses that have been identified, this will ensure that the controls implemented within the Government Pensions Administration Agency and its related processes are improved.' BUSINESS REPORT
