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Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Page 1: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

Implementation of the Special Pensions Act. (As Amended)

UPDATE TO PORTFOLIO COMMITTEE ON FINANCE

8 August 2007

Page 2: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Purpose

To provide the Committee with an overview on the implementation of the Special Pensions Act (Act 69 of 1996)

Page 3: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Background

The Act was promulgated in 1996 to give effect to section 189 of the interim constitution, “to make provision for a Special Pension to persons who made sacrifices or served the public interest in the establishment of a democratic constitutional order”

Page 4: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Qualification Criteria(As set out in the Act) Had to be 35 years or older on 1 December 1996. South African citizenship or entitlement to SA

citizenship Full time service in a political organisation which

was restricted or declared unlawful. Banishment or restriction. Imprisonment or detention for an offence with a

political objective. Inability to build a pension for at least 5 years.

Page 5: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

AMENDMENTS

Overtime amendments were proposed.

Page 6: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Summary of Amendments

1998: Benefits extended to persons suffering of

terminal diseases. Payment advanced to date on which person

becomes 35. Benefits paid to members of the legislature.

Page 7: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Summary of Amendments

2003 (Act 21) Condonation of late applications Dissolution of the Board Remove requirement that 1 Review Board

Member had to be an actuary.2003(Act 30) Non Statutory Forces (NSF) option

introduced. Ceasing of Special Pension if pensioner opts for “NSF” option.

Page 8: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Summary of Amendments

2005 (Act 28) Lapsing of the rights to Special Pensions

and survivor’s benefits on 31 December 2006.

Provision of monthly pensions for surviving spouses and orphans of pensioners (retrospective), as well as a funeral benefit (not retrospective).

Page 9: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Summary of Amendments

Reconsideration of cases already adjudicated on the basis of material new facts.

Re-enforcing provision for recovery of benefits paid to a person that was not entitled to that benefit.

Dissolution of the Board and Review Board.

Page 10: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

Implementation of Act (as amended)

Page 11: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Lapsing Of Rights To Benefits On 31 Dec 2006.

Embarked on extensive Communication and Awareness campaign. Road shows in all provinces Regional visits 2 million newsletters distributed (inserts in major

newspapers) Briefed political organisations.

Page 12: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Awareness Campaign

Radio Adverts SAFM Lesedi Ligwalagwala Ukhozi Mhlobo Wenene

Newspaper adverts City Press Sowetan Sunday World

Page 13: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Newsletter Inserts

City Press Indabazethu Umtata Herald Ilizwi Daily Dispatch EP Herald Sowetan Daily sun Tshwane Sun Isoloezwe

Ilanga The Rising Sun Lentswe Capricorn Voice Northern Review Mpumalanga News The Echo VUKANI Plainsman Free State Issue

Page 14: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Statistical Overview

Rec’d Approved Not Approved

Out

standing

Applications received by 31 December 2006

46 148 15 674

(34%)

21 762

(47%)

8 712

(19%)

Applications received by end of 1998

12 900 2 380 91 10 519

Review applications 6 748 834

(12%)

3 286

(49%)

2 628

(39%)

Section 7 (2)

(New material facts)

161 52

(32%)

33

(21%)

76

(47%)

Page 15: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Statistical Overview

Rec’d Approved Not Approved

Out

standing

Spouses pensions 295 226 31 38

Orphans 9 2 4 3

Funeral benefits 234 186 16 32

Page 16: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Financial Overview

Benefits Paid Operational Expenses

R2.01 billion R86,4 million

(4.3 %)

Page 17: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Dissolution of Board

Board Dissolved on 28 February 2007 as per Act.

Powers of Board devolved to Director General.

Additional capacity will be added to fast track adjudication process.

Page 18: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Common Reasons for Non Approval(Risk factors)• Does not meet the minimum age requirement

• Does not meet the minimum service requirement (5 years)

• Does not have full-time service in a previously banned political organisation

• Committed a criminal offence after 2 February 1990

Page 19: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Common Reasons for Non Approval• Was actively engaged in actions to undermine

efforts to establish a non-racial democratic constitutional order.

• Does not meet the definition of a surviving dependant.

• Does not meet the definition of disability.

• Political Party could not verify the service claimed.

• Insufficient information to support the claim.

• Suspicions of fraud.

Page 20: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Members of the Board

1996 – 1998 Ms. N Moletsane Ms. S Masote Mr. T Shange Ms. B Maree Rev. D White

Page 21: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Members of the Board

1998 – 2000 Mr. I Makopo Mr. E Mohammed Ms. V Petersen Mr. J Njeke Ms. U Bhoola

Page 22: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Members of the Board

2001 – 2002 Mr. I Makopo Mr. ZI Mthimunye Mr. SE Thokoane Mr. CAS Setsubi Ms. RW Ncame

Page 23: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Members of the Board

2002 - 2003 Mr. I Makopo Mr. ZI Mthimunye Mr. SE Thokoane Ms. RW Ncame Mr. Moloi

Page 24: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Members of the Board

2003 - 2007 Mr. I Makopo Mr. ZI Mthimunye Mr. SE Thokoane Ms. RW Ncame

Page 25: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Members of the Review Board (3) Adv. Z Barmania Mr. M Matsobane Prof. A Asher (Actuary) Mr. ML Moloi Adv. Mokoditoa Mr. W Dam (Actuary) Mr. P Burra (Actuary) Mr. M Walker (Actuary)

Page 26: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Adjudication Process

Files pre-screened and prepared by File Preparation Unit.

Files examined by adjudication unit within SP Admin.

Recommendation submitted to delegated authority for approval.

Takes approximately 90 to 120 days to finalise an application.

Common cause for delays – missing documentation and verification process.

Page 27: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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RECORDS MANAGEMENT

Process incoming mail

New application?

Stamp and capture

application on CIVPEN

Existing file?

Open file and store application

Retrieve file and put application in

the file

More info needed?

Send file to File Preparation Unit

Send a letter to the applicant

Put a copy in the file

More info needed?

Receive file from other units

Identify documentDocument identified?

Identify the source address of the

document

Source address

identified?

Retrieve file from Filing Room

Put document in file

Update record if necessary

Put the document in unidentified Arch-lever file

NO

Send to Client Liaison

NO

YESSend file to

relevant SP unit

Send Board decision letter to

the applicantNO

YES

NO

YES

NO

YES

NO

YES

NO

Page 28: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Receive file from Registry / Review

Board

Screen the documents on file

FILE PREPARATION UNIT

More info?

Complete pre-adjudication

summary and put it on file

Verify political service?

YES YES

NO

Send file to Board/Review Board

Research info req’d?

NO

Obtain political verification

YES

NO

Conduct required research

Make recommendation and send file to Board /

Review Board

Claim approved by

Board / Review Board

YESSend file to Payments

NOBoard returns file

to Registry

Note: Gauteng Political Verifiers & Research Unit have been absorbed into this unit

Page 29: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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PAYMENTS ADMINISTRATION

Receive file from Board / Review Board

Generate/Authorise/Confirm

payment

Benefits Admin supplies verification on spouses/

dependants/funeral benefits prior to payment

Return file to File Preparation Unit

More info needed?

Application approved?

YES

Send file to Client Liaison to generate letter to applicant

NO

NO YES

Write letter of approval including payment details to

applicant

Write approved file details on statistics

registerPlace copy of approval on

applicant’s file

Page 30: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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BENEFITS ADMINISTRATION

Receive file from Registry

Conduct verification on

req’d documents

Verify approval for payments on spouses/

dependants/funeral benefits

Payment approved?

NO

YES

Notify applicant by means of a letter explaining claim

not approved.Also notify applicant that he/she may appeal and include necessary form.

Return file to Registry

Send file to Payments Admin

to action payment(s)

Page 31: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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CLIENT LIAISON & EVENT MANAGEMENT

Receive file from Registry

Receive Ministerial enquiry from CEO

Respond to general client correspondence

Attach copy of signed response letter to

enquiry

Place correspondence copy on file

Request file from Registry

Compose a response to the client referred to in

the letter

Put copy in the file, after mailing original

letter

Place signed letter in an envelope

Provide copy of response client letter to GEPF Communications

(Lesna Sewnarain)

Send envelope off for mailing

Return file to Registry

Return file to Registry

Page 32: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Dissolution of Review Board

Review Board dissolved with effect 29 May 2007 as per the Act.

Functions of the Review Board devolves to the Minister of Finance.

The Minister will obtain advice from persons with appropriate political and legal experience.

The Minister will institute special measures to ensure that all backlogs are addressed.

Page 33: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Matters Under Consideration.1. To amend the schedule of benefits to

increase pension when pensioner reaches the age of 65.

2. To consider the payment of a monthly pension to the surviving spouses of persons who died before the Act was promulgated.

Page 34: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Age Qualification Criteria (Under 35’s) Extract from PCOF report adopted by the

National Assembly on 8 November 2005.

“The Committee recognizes that there are potential beneficiaries who have met all, except the age criteria. … the Committee has resolved that the Executive should urgently develop other measures to address the plight of those excluded purely on the basis of age …”

Page 35: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Age Qualification Criteria (Under 35’s) PCOF report of 16 November 2006.

“That the House request the Leader of Government Business to provide feedback on the adoption of the Resolution with particular reference to co-ordinating the implementation of programmes which will provide education, skills and other measures”

Page 36: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Age Qualification Criteria (Under 35’s) Treasury remains committed to participate in

any initiatives towards implementing these resolutions.

Page 37: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Irregularities in Implementation of the Act. A desk top study commissioned by Treasury

suggested irregularities and evidence of fraudulent activity e.g. Persons who had committed schedule 1 offences

were not removed from the system. False biographies were submitted. False claims by dependants and spouses.

Page 38: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Irregularities in Implementation of the Act. Treasury engaged the services of the Special

Investigating Unit.

The investigation commenced in January 2007 and is scheduled to be completed by July 2008.

Page 39: Implementation of the Special Pensions Act. (As Amended) UPDATE TO PORTFOLIO COMMITTEE ON FINANCE 8 August 2007

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Key Challenges

• To streamline the Adjudication and Review process so that we can finalise all outstanding applications within 18 months.

• Verifying information provided by applicants.