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Pretoria - Trade union Solidarity has served court papers on the Government Employees Pension Fund (GEPF) for unlawfully changing the formula for calculating employees' preservation fund payouts at the time of resignation.
Deputy chief executive Johan Kruger told reporters at a press briefing that the civil servants who intended to or have already resigned after the unilateral amendment of the formula took effect on April 1 2015 have lost benefits worth thousands.
"Among (other) things, Solidarity has registered a class action on behalf of more than 1.2 million civil servants and would consequently hold the GEPF liable for the unilateral amendments made to the formula. The GEPF application Solidarity is bringing before the court is a major lawsuit and is probably the first of its kind," said Kruger.
He said no proper consultation process was undertaken, and added Solidarity would demand that those who resigned be compensated as if the previous formula still applied.
"The GEPF has confirmed through correspondence to Solidarity that it did not consult with organised labour before amending the actuarial factors in the formula. The GEPF has admitted to having breached it's own rules in this regard, but sees the cost involved in rectifying the situation as too hefty," said Kruger.
He gave the example of a Captain Van Niekerk, who wanted to retire from the police and start his own biltong shop. Kruger said during May 2015 the calculation of the portion based on his contribution rate amounted to R1 307 212.90, and his actuarial interest amounted to R2 689 861.05.
During July 28 2015, with July 31 2015 still being the date of his intended resignation, the calculation of the portion based on his contribution rate amounted to R1 321 483.26 and the actuarial interest amounted to R2 516 947.68.
"Despite the fact that his average salary increased from R304 855.00 to R308 182.99, his actuarial interest was reduced by R172 913.37 or by 7%. As a result of the drastic reduction in his resignation benefit, Capt Van Niekerk was unable to resign and was forced to withdraw his resignation from the South African Police Service," said Kruger.
He said the union's application would take place in two parts, starting with an application for permission to launch a class action on behalf of all GEPF members.
There would also be an application for review of the decision to unilaterally amend the actuarial interest factors without consultation with the minister and labour.
"We want them to revert back to the factors used in the formula prior to April 1 2015 (and) recalculate the resignation and death benefits paid to members from April 1 and payment of the difference within 60 days," he said.
