NUMSA commemorates the 100 year anniversary of the Russian Revolution

Numsa and Seifsa to settle 11 billion surplus dispute.

23 June 2005, Posted in Press Releases

DATE: 23 June 2005

Johannesburg

NUMSA PRESS RELEASE – FOR IMMEDIATE RELEASE

NUMSA AND SEIFSA TO SETTLE 11 BILLION SURPLUS DISPUTE.

The National Union Of Metalworkers of South Africa (NUMSA) and the Steel and Engineering Industry Federation Of South Africa (SEIFSA) have agreed to distribute 11 billion rands of the metal industry pension/provident funds surplus before the High Court clarifies which legislation to be used to hand it out. The dispute emanated as a results of 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 11 billion rands. The draft proposal says that the funds should:

First pay former members who have left the funds since 1 January 1980 and keep some of the surplus in reserve for those that come later;

Distribute the balance of the surplus between the pensioners, active members and employers.

The employer federation had always argued strongly that the distribution should be in accordance with the Labour Relations Act whiles the union wanted the distribution to be dealt with according to the Pensions Fund Act (PFA). The problem in using the LRA is that it false short of explaining procedures on how the money is ultimately distributed and is 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%. The other weakness in using the LRA is that everyone who once worked in the industry will 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 1970’s.

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. The current proposals accommodates some of our 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 1 million workers must benefit from the surplus.

The dispute has derailed progress in the distribution of surplus. Workers were increasingly getting frustrated. It is our firm view that workers must be prioritized. Employers want to render PFA meaningless. It is good that the matter has to be decided before the court makes any pronouncement. Employers have always failed to understand the value and importance of the surplus. It was going to be a huge mistake to give employers the bulk of the share.

We live in a country where consistently employers want to ride rough shod on workers. Employers are hobnobbing, they want workers to sacrifice the long- term savings on the altar of narrow short term interest in order to satisfy their consumption desires. We are still trying to deal with a massive legacy of home grown exploitation and abuse of South Africans by South Africans. This is a clear case of employers wanting to push workers just to their selfishness ends. We have to compensate all workers who contributed in order to deal with the past workplace injustices.

For more information contact Dumisa Ntuli @ 689-1700 or cell 0829737282