National Treasury: Special Pensions

PRESENTATION TO THE PORTFOLIO COMMITTEE ON FINANCE ON 22 AUGUST 2000

PURPOSE

1. Introduction

2. Status of the payment and administration of special pensions

3. Problem areas

4. Actions by the National Treasury

5. Recommendations

SPECIAL PENSIONS ACT, 1996

To give effect to section 189 of the Interim Constitution:

w to provide for special pensions to be paid to persons who made sacrifices or served the public interest in the cause of establishing a democratic constitutional order

w to prescribe rules for determining the persons who are entitled to receive such pensions

CRITERIA - RIGHT TO A PENSION
A person has the right to a pension in terms of this Act if that person:

w was at least 35 years on 1 December 1996

w was prevented from providing for a pension due to one or more of the following circumstances:

s A person who was engaged, on a permanent basis, in the service of a "liberation movement"

s A person who was prevented from leaving or being in a particular place or area within the Republic

s A person who was imprisoned or detained as a result of his political convictions Section 1(3) of the Act provides for persons under 35 years who were disabled or suffers from a terminal disease, to receive a Special Pension


BENEFIT STRUCTURE

AGE CATEGORY IN YEARS

ANNUAL PENSION AMOUNT IN RANDS

35 but younger than 50

6 000

50 but younger than 65

12 000 PLUS 1 200 for each of service exceeding 5 years but fewer than or equal to 20 years, with maximum amount of 30 000

65 and older

24 000 plus 1 200 for each year of service exceeding 5 years with a maximum amount of 42 000. Where years of service exceed 25 years, a fixed amount of 84 000

STATUS OF THE PAYMENT AND ADMINISTRATION OF SPECIAL PENSIONS


Distribution of all applications (29,766) according to age as at 31 July 2000

[PMG Ed. Note: pie graph not included]


Distribution of all applications (29,766) according to region as at 31 July 2000
[PMG Ed. Note: pie graph not included]

Number of members paid (4,671) according to age as at 31 July 2000
[PMG Ed. Note: pie graph not included]

Number of members paid (4,671) according to political party as at 31 July 2000
[PMG Ed. Note: pie graph not included]

Distribution of applications processed but not yet adjudicated on (17,984) according to age as at 31 July 2000

[PMG Ed. Note: pie graph not included]

PROBLEM AREAS

First Special Pensions Board

01/12/1996 - 31/03/1998

w The Board took a long time to adapt to Special Pensions Act and rules

w Misinterpretation of Act and ineffectiveness by administration lead to erroneous payments and overpayments

w Only 1 636 payments were made during term of office due to the above problems

w Term of contract expired on 31 March 1998

Current Special Pensions Board

01/12/1998 - present

w 5 members appointed but only 3 accepted appointment

w Part-time appointment resulted in adjudication process remaining slow

w Uncertainty on interpretation of certain sections in Special Pensions Act still continues

w 3035 payments made up to 31 July 2000


Other problems

w Applications from persons under 35 years of age

w Detailed information required by the Act is complex and not readily available from applicants or other sources

w Validity (accuracy) of information submitted is not guaranteed necessitating further investigations

w This necessitates the acceptance of affidavits which could result in fraud


ACTIONS BY THE NATIONAL TREASURY

ACTIONS
w
Consultants were appointed to improve workflow by reengineering current processes

w External auditors were appointed to conduct a forensic audit

w Appointed KMMT Brey as internal auditors

w Amended the Special Pensions Act to widen the net of potential applicants

w Compiled a Special Pensions Procedure Manual in conjunction with Auditor-General

w The National Treasury forged relationships with the following sources to obtain information:

Department of Justice

Department of Correctional Services

Robben Island Museum

Mayibuye Centre: University of the Western Cape

Truth and Reconciliation Committee

Political Organisations


Establishment of regional offices:

Port Elizabeth - Bisho

Umtata - Durban

Cape Town - Mafikeng

Pietersburg - Pretoria

w Discussion forums were established with the assistance of political structures:

s Special Pensions Consultative Forum, Gauteng

s Eastern Cape Veterans Group

s Western Cape Veterans Group

s KwaZulu Natal Veterans Group

s Northern Province Veterans Group

s Political Verification Unit


RECOMMENDATIONS (approved by Cabinet on 31 May 2000)

w Accept the premise that information available on files cannot be improved upon

w Appoint five full-time members to the Special Pensions Board at increased nominal remuneration rates

w Appoint two additional members to the Review Board

w Board to adjudicate on all available files within nine months

w Communication campaign to inform stakeholders of intended approach

w Board to submit a full report regarding their decisions to Cabinet after nine months