Public servants union takes GEPF to court over fund calculations

Johannesburg - The Public Servants Association of South Africa (PSA) made an application at the North Gauteng High Court in Pretoria to contest the amendments made by the Government Employees Pension Fund (GEPF) in determining retirement and resignation fund benefits.

This is according to PSA Assistant General Manager in Interest, Leon Gilbert. In an interview with Fin24, Gilbert explained that GEPF made the decision without following procedure by consulting other unions. The amendments have been enforced since 1 April 2015. This follows trade union Solidarity’s decision to take the GEPF to court, for the same reason, in May. The difference is that Solidarity is filing a class act, explained Gilbert.

“The GEPF must consult other unions before making decisions like this. But they did not consult us, they even admitted it,” he said. As a result, the direct effect of the amendment is a 7% decrease in the value of benefits payments, explained Gilbert.

The aim is to have the decision to be reversed, so that those who have retired or resigned since April 2015 to be “put in the position they were” before the changes were made. This is also to make provision for future payments to public servants, he explained.

Benefits to public servants are determined by a formula, they do not operate like other fixed contribution funds, explained Gilbert. The “actuarial values” used in the formula were amended without consultation. More than 1.2 million public servants are being affected.

The PSA and GEPF have corresponded about the matter a number of times but the GEPF has not changed the amendments. The PSA is waiting for a court date to be set, and Gilbert said it is uncertain how long it will take for the matter to be concluded.

In an emailed response to Fin24, GEPF indicated that it acknowledged PSA's decision to take the matter to court. "The GEPF considers this matter sub judice," it stated. 

In a statement, the PSA said it requires “proper procedures” to be followed and the process to be transparent to all stakeholders involved.