An agreement to distribute R11-billion of the metal industry’ pension and provident funds surplus was reached on Monday by the National Union Of Metalworkers (Numsa) and the Steel and Engineering Industry Federation (Seifsa).
Numsa spokesperson Dumisa Ntuli said the decision was made ”before the High Court clarifies which legislation [is] to be used to hand it out”.
Ntuli said the dispute emanated from the employers seeking a declaratory order from the court.
”The trustees of the two funds will meet again to work out the details of allocation of the R11-billion.”
According to the draft proposal, the funds should first pay former members who have left the funds since January 1 1980 and keep some of the surplus in reserve for those that came later.
The draft also proposed that the balance of the surplus be distributed between the pensioners, active members and employers, he said.
”The employer federation had always argued strongly that the distribution should be in accordance with the Labour Relations Act (LRA), while the union wanted the distribution to be dealt with according to the Pensions Fund Act (PFA).”
Ntuli said the problem in using the LRA was that it fell short of explaining procedures on how the money was ultimately distributed, and was too general.
”It will allow the trustees to decide who gets what and how much. The implications are that employers will want to take a 50% stake and the workers who are currently employed in the industry will take the rest of the 50%”
He said the other weakness in using the LRA was that everyone who once worked in the industry would be ignored.
”There is no rational explanation why everyone else who contributed to the fund should be marginalised. The joint contributions in pension/provident funds started in the 1970s.
”We are excited that the proposals will in the final analysis settle the long surplus dispute. We always wanted the distribution to be in line with PFA because there is a precise procedure and formula to be used.”
Ntuli said the current proposals accommodated some of the unions concerns.
”In terms of the PFA, former members, active members and pensioners must be the first to be considered. Those members who joined the fund after 1991 cannot claim.
”Employers will be the last ones in the queue to receive after workers have received their share of the surplus. It is estimated that close to one-million workers must benefit from the surplus.” ‒Sapa