Trade union Solidarity said on Wednesday it had filed court papers seeking certification for a class action lawsuit against the Government Employees Pension Fund (GEPF).
The union argues that since April 2015 civil servants who have or sought to resign have been prejudiced by a unilateral decision to change a formula determining pay-outs‚ made without following the legislated requirement to consult labour.
Speaking at a briefing in Pretoria‚ Solidarity deputy CE Johan Kruger said the union had filed papers on Wednesday seeking certification for a class action that could affect 1.2-million active fund members‚ after the fund admitted its mistake but refused to rectify it.
“The fund has admitted to breaking its own rules but sees the costs involved in rectifying it as too costly. They indicated the process is too cumbersome to go back to the previous formula‚” he said.
The union could not provide details on what new actuarial interest formulae had been used‚ nor the total financial effect of the decision.
However‚ citing the case of one of its members who sought to resign in 2015‚ Solidarity said the difference of the pay-out using the old available formula and that offered to the member was R170‚000‚ or 7%.
The union would be seeking relief compelling the fund to revert to the old formula and make any necessary back payments required and asking that interest on back-payment be attached at a rate of 10.25% a year.
Solidarity‚ which currently represents 7‚000 of the affected public servants‚ does not meet the 50‚000 member threshold for entrance to the Public Service Co-ordinating Bargaining Council‚ and on Wednesday said attempts to raise the issue there did not yield results.
The formula in contention had been implemented and the route to proceed with was a judicial review‚ the union said.
- Tiso Black Star Group Digital/BDLive
Solidarity files papers seeking class action suit against government pension fund
The union argues that since April 2015 civil servants who have or sought to resign have been prejudiced by a unilateral decision to change a formula determining pay-outs‚ made without following the legislated requirement to consult labour.
Speaking at a briefing in Pretoria‚ Solidarity deputy CE Johan Kruger said the union had filed papers on Wednesday seeking certification for a class action that could affect 1.2-million active fund members‚ after the fund admitted its mistake but refused to rectify it.
“The fund has admitted to breaking its own rules but sees the costs involved in rectifying it as too costly. They indicated the process is too cumbersome to go back to the previous formula‚” he said.
The union could not provide details on what new actuarial interest formulae had been used‚ nor the total financial effect of the decision.
However‚ citing the case of one of its members who sought to resign in 2015‚ Solidarity said the difference of the pay-out using the old available formula and that offered to the member was R170‚000‚ or 7%.
The union would be seeking relief compelling the fund to revert to the old formula and make any necessary back payments required and asking that interest on back-payment be attached at a rate of 10.25% a year.
Solidarity‚ which currently represents 7‚000 of the affected public servants‚ does not meet the 50‚000 member threshold for entrance to the Public Service Co-ordinating Bargaining Council‚ and on Wednesday said attempts to raise the issue there did not yield results.
The formula in contention had been implemented and the route to proceed with was a judicial review‚ the union said.
- Tiso Black Star Group Digital/BDLive
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