Public Protector clarifies court decision on Venda Pension Fund case

Public Protector Adv. Busisiwe Mkhwebane has caught wind of the apparent confusion among some former members of the erstwhile Venda Pension Fund in respect of the recent High Court ruling in Johannesburg relating to Finance Minister Tito Mboweni’s legal challenge to her office’s investigation reports 18 and 15 of 2011/12 and 2016/17 respectively.

 

In this regard, Adv. Mkhwebane would like to clarify that the High Court has yet to decide on the Minister’s 11 March 2019 application. In the application, the Minister seeks an order declaring that the remedial action on the two reports has been discharged through substantial compliance or that both reports be reviewed or set aside. Both Public Protector and the complainants are cited as respondents.

 

The reports in question relate to an investigation into allegations that the state, in particular the Government Employees Pension Fund (GEPF) and the National Treasury, acted improperly during the privatisation of the Venda Pension Fund, thereby prejudicing members of the fund. It resulted from a complaint by members of the fund, Messrs TJ Tshiololi, LJ Rambau and MP Ramavhale, who also alleged that, due to the privatisation in question, they were not entitled to full pension benefits in terms of the Government Employees Pension Law (GEP Law).

 

Former members of the defunct Fund are accordingly hereby informed that the matter recently decided by the High Court in favour of the Public Protector relates to a separate but related issue and does not constitute a decision on the main application to declare that the remedial action on the two reports was discharged through substantial compliance or that both reports be reviewed or set aside.

 

In response to the Minister’s 11 March 2019 application, the Public Protector filed a rule 6(5) (d) (iii) notice in terms of the Uniform Rules of Court (URC), raising a number of points of law including peremption. She submitted that the Minister’s application was perempted in that his conduct from April 2002 to 14 February 2012 was inconsistent with his intention to challenge in any way the remedial action spelt out in report 18 of 2011/12. She indicated that, during the period in question, the Minister had decided to abide by the remedial action.

 

Responding to the Public Protector’s rule 6(5) (d) (iii) notice, the Minister then brought an interlocutory application, taking exception to the points of law set out in the notice. The exception was in terms of rule 23(1) of the URC.

On 31 August 2020, Judge Fayeeza Kathree-Setiloane dismissed the Minister’s interlocutory application, with costs. He must now file an answering affidavit to the Public Protector’s rule 6(5) (d) (iii) notice.

 

“This is a heart-rending case. The complainants have been waiting for years on end for justice. They have already suffered immensely as a result of the maladministration and the long wait for the implementation of remedial action. Many of them including those who are former Directors-General are penniless and depend on the old age grant for survival while a number of them have already passed away while waiting for a breakthrough,” said Adv. Mkhwebane.

“The answering affidavit must be filed without any further delay so that there can be finality. The delays hinder the court from finalizing the matter. Moreover, they defer the long overdue justice for the complainants.”

 

NOTE TO EDITORS

 

Messrs Tshiololi, Rambau and Ramavhale approached then Public Protector Adv. Lawrence Mushwana in November 2008 on behalf of a group calling itself the Vhembe Concerned Pensioners.

 

After investigating, Adv. Mushwana’s successor, Adv. Thuli Madonsela, published report 18 of 2011/12 in which she made findings in favour of the complainants. Among other things, she found that the complainants suffered prejudice as they were influenced to privatize their pension benefits but were not properly informed about the consequences of privatisation. Privatisation in this instance meant they would forfeit all the benefits of a defined benefit fund such as a spouse’ pension, funeral benefits and orphans’ benefits as well as a medical aid subsidy after retirement.

Adv. Madonsela also found that the complainants suffered prejudice when their complaints and problems were ignored by the different government institutions they complained to. In addition, it was found that the complainants suffered prejudice as they had to apply for old age grants despite having accumulated numerous years of service.

 

As a remedy, she directed the Ministers of Public Service and Administration and Finance to appoint a task team to review the implementation of Privatisation Schemes of the former Venda Pension Fund. The task team was to also consider changes to the GEP Law and Rules if required to enable members who participated in the privatisation schemes the opportunity to repay the benefits received and to recalculate their pension benefits in terms of the rules regulating normal retirement.

 

In addition, the GEPF was directed to recalculate the pension benefits for Messrs. Tshiololi and Ramavhale as if they retired with all their years of service as members of the GEPF including the Venda Pension Fund and afford them the opportunity to repay any benefits they might have received, excluding the amounts repaid by them to the Venda Government. In the case of Mr. Rambau, the Department of Public Service and Administration and the Treasury were directed to order a forensic audit of the list of the first Privatisation Scheme of the Venda Pension Fund to determine the accuracy of the transferred amounts in respect of each member.

 

The remedial action was to be finalized within six months of the report, which was dated 08 November 2011. Five years later, on 12 December 2016, the implementation of remedial action remained outstanding, with government citing a number of stumbling blocks. These included fears that implementation would open the floodgates in respect of the potential of similar claims from other former members of pension funds from the erstwhile homeland governments and the need for clarity in respect of the basis for some of the findings.

 

This prompted Adv. Mkhwebane in 2017 to issue a special report (15 of 2016/17) on the same matter. The report sought to assist the Treasury to expeditiously implement the old report issued by Adv. Madonsela in pursuit of deliberations held with the former Treasury Director-General, Mr. Lungisa Fuzile and then Minister of Finance, Mr. Pravin Gordhan.

 

In the report, Adv. Mkhwebane confirmed the findings contained in the report of November 2011, provided guidance on how to resolve the paucity of records on the side of the state and verify information provided by the complainants relating to their posts, the departments where they were employed, their appointment dates and remuneration details.

 

She addressed the general concerns raised by state institutions as well as specific anxieties relating to the implementation of the remedial action, including fears that such implementation would open the floodgates. She further emphasized the reasons why government needed to address the un-remedied injustice highlighted in the report of November 2011.

 

Adv. Mkhwebane further recommended a process based on a closed list of complainants to establish a reasonably reliable database of beneficiaries of this office’s remedial action and to assess the potential prejudice and losses of these beneficiaries with the aid of an actuary.

 

She recommended that the Treasury commits funds to facilitate the recalculation of pension benefits by the Government Pension Administration Agency (GPAA) of those complainants who became members of GEPF after 1996 and/or ad hoc compensation of those who retired prior to the amalgamation of the various pension funds, to reimburse their reasonable losses as estimated with the assistance of the actuary.

 

In addition, she recommended that Parliament oversees the implementation of the remedial action in terms of Section 182 (1), read with sections 43 (2) and 55 (2) of the Constitution.