PENSIONS: Some progress

Finance minister Malusi Gigaba admitted that the stalemate continues in pension industry negotiations — the parties at Nedlac have yet to agree on the future of provident funds.
For now, members of provident funds can take out their pension pots in a lump sum, though government and business would like to see pension and provident fund rules aligned so that everyone would have to buy a regular annuity. But labour has dug in its heels.
This stalemate notwithstanding, there has been some progress in the pensions industry.
Changes to offshore regulations were quietly slipped into the budget.
Soon, pension funds and retirement annuities will be able to increase their exposure to offshore assets from 25% to 30%.
Rowan Burger, managing executive at MMI, says this will give investors the opportunity to diversify from a highly concentrated local market, where Naspers alone can account for 25% of the index.
It is quite a bold move when a stronger currency makes offshore assets look cheaper in rand terms.
Burger says "project bonds" outlined by Gigaba will provide a new asset class for retirement funds. They will give institutional investors the chance to participate in infrastructure projects through listed tradable securities that aim to offer superior risk-adjusted returns.
They will be underpinned by the cash flow of infrastructure or energy projects, for example.
David Gluckman, head of special projects at Sanlam, says that for the first time treasury has put a stake in the ground on retirement fund consolidation.
The Financial Services Board has been directed to continue the policy of reducing the number of retirement funds to fewer than 200, compared with the currently active 1,650.
The subscale funds are likely to join umbrella funds offered by the likes of Sanlam, Old Mutual and Alexander Forbes.
Michelle Acton, principal consultant at Old Mutual Corporate Consultants, says it is interesting that the proposals include even those funds that are exempt from annual audits because they have less than R6m in assets.
And all funds should have independent trustees.
"They can ensure that there is a fair balance between the interests of the members and the management trustees," Acton says.
"Ironically, when these small funds fold into umbrellas they no longer have the right to vote for trustees. But the aim is for the governance of retirement funds to be in line with the King4 standards."
Unclaimed benefits are a serious issue, with more than R40bn lying waiting for former members to take their share.
Treasury officials speak of consulting with Nedlac to look at a more efficient way to find beneficiaries. They talk of centralised data, not yet explicitly about a centralised government-run fund.
Treasury also wants to strengthen measures to deal with criminal and unethical practices and expects funds and administrators to improve disclosure. And the same rules need to apply to state entities such as the Government Employees Pension Fund (GEPF). This is by far the largest fund in the country, but raises governance questions by not giving its members the right to elect trustees.
The Budget Review reports that the GEPF now has 1.3m members and 437,000 beneficiaries, mostly pensioners. Its total contributions were up R5bn to R65.4bn. Membership was flat but beneficiaries increased by 3.3%.
It plays a huge role in the creation and preservation of wealth in the public sector, paying benefits of R88.3bn last year.
The portion of benefits that went to resignations was 34%, down from 44% the year before with more stability in the workforce. The full GEPF actuarial review will only be issued next year.
The fund’s assets are divided between equities (R927bn), bonds (R538bn), money market (R71bn), property (R59bn) and unlisted investment (R97bn).


Class-action silicosis case likely to take six months to settle as three new companies join the matter

Hopes of a quick resolution to the occupational lung disease (OLD) class-action, which includes thousands of former miners afflicted with silicosis, have been tempered, with expectations of a settlement to take to the courts expected in the next six months instead of early this year as three new companies join the matter.
Speaking on the sidelines of the African Mining Indaba, Graham Briggs, the former CEO of Harmony and now chair of the working group on OLD, said the lawyers and parties involved in the class-action were hammering out a complex settlement, with a lot of details needing to be resolved before the matter could be returned to court for ratification.
There were hopes last year that an agreement for which six mining companies have made provisions totaling R5bn could be in place by the end of December, which was then rolled over to the end of March this year.
"Realistically speaking, I’d say it’s going to be six months before we have something finalised that we can take back to court," Briggs said. "We are close, but the devil is in the details and there are a huge number of moving parts."
The six mining companies are Harmony Gold, Gold Fields, African Rainbow Minerals, Sibanye-Stillwater, AngloGold Ashanti and Anglo American. Just recently, Pan African Resources, DRDGold, and Randgold & Exploration have joined the matter.
In the 12 months to end-October 2017, there were 7,756 compensation payments made to former miners with OLDs, worth R226m, compared to 1,628 compensation payments worth R79m in the same period in 2015.
The funds were paid from R3.5bn in unclaimed funds held in the Department of Health’s Medical Bureau for Occupational Diseases (MBOD) as six doctors and senior managers from gold mines were seconded to the fund, stepping up the tracking and tracing of former miners in SA and neighbouring countries, leading to the increase in claimants.
The mining companies will pay a lump sum into a trust that will embark on work to locate, verify and assess former miners with silicosis, which is caused by breathing in silica dust generated during gold mining, and occupational tuberculosis. Once confirmed, the trust will make a payment to the former miner, or their family if the miner, who had a confirmed OLD, had died, Briggs said.
Mining companies would not pay the full R5bn into the trust, but rather a portion of it to fund the trust’s work; then they would make payments as claimants came into the system over the next 12 years or so and the trust made cash calls on companies, Briggs said.
The number of former miners who could approach the trust is unknown, he said, suggesting the number may be lower than the 100,000 some market commentators have said. "With our outreach programme and analysis done by actuarial people, we have been surprised how few people there are relative to the numbers that have been put out there, but we don’t know exactly."
Briggs said the once-off payments would be made in addition to funds sick workers received from the MBOD.


Irate mine workers take PMC to court

More than 3 000 former mine workers have launched a class action against a liquidator they accuse of being secretive about the R421.9m surplus accrued from their pension fund.
The former workers of Palabora Mining Company (PMC) in Phalaborwa, Limpopo, have been fighting for at least 12 years to get their money after PMC’s pension fund was liquidated in 2005.
The gist of the copper mine workers’ claim is that the fund’s liquidator, Garth Barnard, who was appointed by the Registrar of Pension Funds, has not been transparent about the amount of surplus accrued, nor about how and when it will be distributed.
Tolie Mnisi (75), the chairperson of the Palabora Pensioners’ Forum, said 3 133 former employees had come forward to claim what they are owed.
He said 673 employees had died without seeing a cent of this money while the forum tried in vain to claim the money on their behalf.
Mnisi worked in the copper mine for 24 years and took early retirement in December 1998.
“Some of us retired, some were retrenched and some resigned, but the fund did not pay us the surplus,” he said.
He said he got R68 000 when he retired and was told he would get the rest of his money when he reached retirement age.
“They did not call me back. That’s why we’ve been fighting.”
In his affidavit in the Pretoria High Court, Mnisi said he wanted the court to review and set aside the calculation performed by Barnard, and that he must be ordered to recalculate the benefits to be paid to the beneficiaries.
“In protest to the manner in which the calculations have been performed, we have thus far refused to provide our banking details to the liquidator or to collect cheques for our benefits,” he said.
“The course of action we intend to pursue is to review and set aside the calculation performed by the liquidator, to order the liquidator to recalculate the benefits and for the liquidator to pay the recalculated benefits to members of the class action,” Mnisi added.
The PMC decided to liquidate the fund following the introduction of the Pension Funds Second Amendment Act, which is aimed at ensuring that surpluses of pension funds are allocated equally to beneficiaries.
A surplus on a pension fund happens when the fund accumulates extra money after all expenses have been paid.
In an effort to reach funds liquidator Barnard, City Press contacted Financial Services Board (FSB) spokesperson Tembisa Marele, who did not respond to written questions.




JOHANNESBURG - From Friday, child maintenance dodgers will be traced through their cellphone numbers and blacklisted.
Key sections of the Maintenance Amendment Act came into effect this morning.
The new law gives maintenance officers power to track down defaulters through information obtained from cellphone service providers.
Deputy Justice Minister John Jeffery: "The person claiming maintenance will approach the court for an order that the court must grant a maintenance order. They then have to abide by that order and if they don't, then their property can be attached to pay for the debt."


New Years Message to all TraceGenie staff

Dear Danette, Deon and Sanette

As we are all set to begin another year, I, want to thank you all for your hard work for our growth and I wish that the New Year becomes a year of better performances with your dedication and efforts…

Your hard work is the reason behind our success and we dedicate our growth to you three and our valuable network of tracing agents.  We will look forward to more success stories to write and new accomplishments to make…. Warm wishes to you all  May you all be blessed!!!

Wishing you a very Happy New Year.

Thinus Smith
CEO - TraceGenie


4 000 EC ex-miners finally strike gold: Dispatch locates beneficiaries of unclaimed benefits

Four thousand Eastern Cape ex-miners or their families today stand a chance to claim their share of R40-billion worth of benefits that was left unclaimed for decades.

All 4000 names are published in this edition on pages 13 to 21. This could provide a significant financial boost to their struggling families and the province.
Thousands of ex-miners recruited through TEBA many years ago, have struggled to access their retirement funds because of bureaucracy and hurdles within the system.
TEBA claims it has struggled for years to locate most of the beneficiaries – but it took the Saturday Dispatch only three days of travelling around the province to contact at least 15 ex-miners or their families.
Most of the beneficiaries and their families contacted by the paper were not aware they had money and could access the funds from the multinational mining companies they have worked for over the years.
A large number of mineworkers from South Africa, Lesotho, Swaziland, Mozambique and Malawi died after contracting disease in the mines.
Some of the ex-mine workers who spoke with the Dispatch, accused TEBA of complicating the system, making it difficult for them to claim monies owed to them.
But TEBA said they were doing their best to trace those owed money by the mining companies.
TEBA said they have already paid R300-million on different projects in rural “labour sending” communities ranging from pension and provident fund monies to occupational lung disease benefits.
An amount of R240-million was paid to individual beneficiaries under the Medical Bureau for Occupational Diseases (MBOD) and R60-million through mineworkers’ provident funds, such as the Mines 1970 Preservation Fund, Anglo Group Provident Fund, MPF Sibanye and others (see sidebar).
From Willowvale, Matatiele, Mount Fetcher, Komani to Adelaide, scores of ex-miners are sitting destitute at home with no money to support their families.
One is 89-year-old Gilapho Mavuso of Willowvale who has struggled for years to access his money through TEBA.
“For the many years that I worked in the mines, I am still holding on to the hope that my money will be paid out one day. I am hoping this will happen while I am still alive so my children can be able to bury me with dignity.”
TEBA’s Eastern Cape manager Samuel Moeletsi said the company and its industry partners were making significant strides towards resolving the issue of unclaimed benefits.
“In recent times, we have been at the forefront of projects which have released more than R300-million into rural ‘labour sending’ communities.
“In addition to this, TEBA continues to support the payment of individuals who were injured on duty,” said Moeletsi.
The Dispatch has also discovered that some of the 4000 ex-mineworkers listed to get money from TEBA, have died while others are living in abject poverty.
This week, the Dispatch team spent three days travelling more than 2000km from Matatiele to Adelaide, King William’s Town and other surrounding towns searching for miners on the list.
TEBA said it was using other media platforms to trace the miners but none of those who spoke to Dispatch, were aware of this as they did not have access to radio or television.
“We are doing roadshows with a view to meet beneficiaries without radios face-to-face so we can clarify claim requirements and related stuff,” said Moeletsi.
Another beneficiary, 73-year-old Lungile Qhanqa of Mcewula village in Whittlesea, is one of the 4000 of an estimated 180000 ex-miners who are still to claim their monies.
When Qhanqa met with the Dispatch team at his modest rural home, he could not hide his joy.
“This is great news brought by strangers into my house. I was ready to die but I am asking for more years to enjoy the money from TEBA,” he jokingly said as he was welcoming the Dispatch team into his house.
Qhanqa left the mines in the ’90s and accepted what was given to him as his retirement package.
“I always had that hope that there’s money that will come to me but after almost 30 years with no word from TEBA, I gave up,” he said.
Moeletsi said the challenge they were facing was the illegal tracing agencies, who were taking money from the poor ex-miners. 



Workers owed billions in unclaimed benefits

Cape Town - Workers across Southern Africa are owed billions in unclaimed benefits but it’s proving to be difficult to trace them.

So says the Financial Services Board (FSB), which released figures this week that pension fund administrators have R42 billion in unclaimed pension and provident fund benefits.
The funds are owed to 3.5 million beneficiaries who don’t know they have the cash in various interest-bearing accounts. About 2.8 million of them are in South Africa and the rest are in the SADC region.

Most of the unclaimed benefits arose from the mining, motoring, metal and engineering industries, said Loraine de Swart, FSB assistant manager of retirement funds.
The FSB and the Registrar of Funds sounded a warning against “unscrupulous operators” who had tried to con people into paying them R1 200 to trace their money.

De Swart said: “These are often empty promises and there is absolutely no guarantee that the person paying that amount is due any money.
“The FSB has placed a number of warnings in newspapers and visited affected communities to make it clear that the FSB is able to assist with inquiries free of charge.”
Since 2015 the FSB, together with fund administrators, has set up a national database to track beneficiaries but it is ultimately the responsibility of fund administrators.
Many funds have now employed tracing agents to find the beneficiaries.
“The tracing of unclaimed benefits is further hindered by the huge number of migrant workers that were employed either as illegal immigrants or those not willing to provide their true identities as this could have resulted in their not finding a job or being sent back to their countries of origin.”
In instances where beneficiaries are not traced, the money is placed in an unclaimed benefits trust.
De Swart said a regulation had been introduced in 2001 to compel employers to provide funds with member details, including full name, date of birth, ID number or employee/pay number, or other means of identification.
“Funds should therefore maintain accurate membership data and contact details of its members.”
But a consultant for Commsure Financial Solutions, Patrick Odendaal, said in some cases administrators were tardy in tracing and paying beneficiaries so they could continue to claim service charges.
For example, if a beneficiary had an unclaimed benefit of R5 000 over a long period, the entire benefit could be swallowed up by administrative charges.
This practice had been outlawed since 2007 by the Registrar of Funds in an attempt to preserve as much of the unclaimed benefits as possible for members.
However, the practice had continued.
Odendaal did, however, agree with the FSB that administrators faced many hurdles and called on the industry to do much more to trace and pay beneficiaries.
One way would be for fund administrators to share databases, and tap into the databases of Sassa and major retailers such as Edgars.
Odendaal said the unclaimed benefits ranged from R5000 to tens of thousands of rands a person.
According to the report released by the FSB this past week, just a little over R22 billion rand had been paid out to 934 000 members in the past five years, but a staggering amount was left in the kitty.
Weekend Argus approached five of the big fund administrators, Liberty Life, Old Mutual, Alexander Forbes, Momentum and Sanlam, to find out about the progress of their tracing and payments and also what their administrative charges are per member.
At the time of going to print, three of the five had responded to queries about tracing and paying benefits and just one replied to the question about admin charges.
Emile Huge, Momentum’s principal officer of unclaimed benefit funds, said an unclaimed benefit is defined in the Pension Funds Act as one that had not been claimed for two years after it became due.
“The combined membership of Momentum’s two unclaimed benefit funds was 59 354.
"Over the past five years we have successfully traced and paid 49 318 members.”
Hugh Hacking, Old Mutual corporate general manager of operations, said as at June 30 the company had a little under 100 000 members in the unclaimed benefit preservation pension and provident funds and they employed three independent tracing agents.
Danie Scholtz, Sanlam’s head of marketing, said the company’s employer benefits department administered approximately 100 funds with more than a million members.
The Unclaimed Benefits Provident Preservation Fund, with 28 216 members, had an assets value of just under R287m.
The Unclaimed Benefits Pension Preservation Fund had 21 922 members with an asset value of just over R378m.
Scholtz said Sanlam also employed tracing agents.