2017-08-31

Finance Minister Gigaba: Former Venda Pension Fund victims will be resolved

CAPE TOWN- The payment of pensions to beneficiaries of the former Venda Pension Fund will be resolved by the end of November 2017, says the  Ministry of Finance.
“The Minister of Finance, Malusi Gigaba, intends to resolve the payment of pensions to beneficiaries of the former Venda Pension Fund by the end of November,” said the ministry of the monies that are owed by the then government of Venda in Limpopo.
 
According to a statement, Gigaba said the matter has long been outstanding and needs to be resolved as urgently as possible.
 
Tshimangadzo Tshiololi, Musandiwa Ramavhale and  Mafela Rabambi were victims of the state's maladministration following former public protector Thuli Madonsela's investigation in 2011.
The victims lost all their retirement money during the amalgamation of the Venda Pension Fund and the First Privatisation Scheme pre-1994 and before the Government Employees Pension Fund came into effect.
The new scheme came into effect in 1993 while payouts by the former Venda government were made in 1992. Some of the pensioners could not be paid and had claimed the payouts were made "selectively", reported Sowetan live earlier this year.

It is said that Madonsela's report urged the state to pay out the former workers' pension and apologise to them for maladministration at the hands of "different government institutions".
However, former public protectors efforts were in vain as none of these happened.
Meanwhile, the Minister has reaffirmed his commitment to seeing the project finalise.
“The Government Pensions Administration Agency (GPAA) is collating and reconstructing individual files and records of beneficiaries. This will ensure that qualifying pensioners receive the monies due to them,” concluded the Ministry of Finance.


https://www.iol.co.za/business-report/economy/finance-minister-gigaba-former-venda-pension-fund-victims-will-be-resolved-11008294

2017-08-22

Zuma signs Twin Peaks Bill into law

Cape Town – President Jacob Zuma has signed into law the Financial Sector Regulation Act 2017.
The legislation – also known as Twin Peaks - was passed by Parliament in June and sent to Zuma for ratification.
It makes provision for a so-called Twin Peaks model of financial regulation. On the one hand, the SA Reserve Bank (SARB) will be responsible for regulating all financial institutions – banks, insurance houses and the asset management sector. 
On the other hand, financial conduct will be governed by a new entity, called the Financial Sector Conduct Authority, which will replace the current Financial Services Board (FSB).
The Presidency said in a statement issued on Monday that the Financial Sector Regulation Act aims to achieve a financial system that works in the interests of financial customers, and supports balanced and sustainable economic growth in South Africa.
The new regulatory and supervisory framework will promote, among other things, financial stability, the fair treatment and protection of financial customers, the efficiency and integrity of the financial system, the prevention of financial crime and transformation in the financial sector.
The legislation also provides for cooperation and collaboration among the National Credit Regulator, the SARB and the Financial Intelligence Centre.
During parliamentary deliberations, opposition parties said they were concerned that the legislation would not ensure adequate protection of consumers who apply for credit, as the National Credit Regulator does not fall under the ambit of the act.
Alf Lees of the Democratic Alliance was also worried about the cost of implementing the new legislation, which he believed will be passed on to consumers.

http://www.fin24.com/companies/financial-services/zuma-signs-twin-peaks-bill-into-law-20170821?utm_medium=email&utm_source=Fin24|AMUpdate&utm_term=www.fin24.com/companies/financial-services/zuma-signs-twin-peaks-bill-into-law-20170821

The pile of unpaid benefits is a national crisis that needs multilateral action

Co-ordinated effort backed up by new law is the starting point to pay out billions of rand owed to the public

2017-08-18

Notes from the House: SA’s economic woes bring new urgency to debt relief reforms

In the face of expanding personal debt that has been crippling South Africa’s consumer landscape for years, efforts now under way to introduce amendments to the National Credit Act to provide for debt relief and forgiveness are hugely welcome, albeit somewhat overdue. By MOIRA LEVY.
First published by Notes from the House
Parliament’s Committee on Trade and Industry is pushing to speed up the process of drawing up amendments that would set criteria for eligibility for debt relief, recognising for the first time that the problem is not simply reckless borrowing.
The changing economic circumstances of citizens have forced many into unexpected debt, which is often unregulated and without insurance.
The committee recognises that these citizens require legislative protection now more than ever, despite the consequences that paying off individual credit may have on the lending industry and the economy as a whole.
The committee has been meeting with stakeholders since late 2016, but this process has now gained an urgency that can be felt at committee meetings. National Treasury has been called in to provide a profile of the demographics of the indebted section of the population, and this week calls were made in the committee hearings to expand the reach of its research to recognise that it is now not only the unemployed and indigent who need relief.
The Treasury has expressed support for stronger relief for over-indebted South Africans, while keeping in mind the need to approach consumer protection by taking account of other financial sector policy objectives such as financial stability, financial inclusion and financial integrity.
Shadow Minister of Trade and Industry Dean Macpherson proposed that Treasury’s study should include those earning up to R30,000, in an acknowledgement that debt distress is currently being felt by a much wider than expected group of households and more South Africans may need to be included in the safety net being considered by the committee for the National Credit Amendment Act.
Portfolio Committee Chairperson Joanmariae Fubbs is hoping the commitee’s National Credit Policy Review for Debt Relief report will be finalised before the end of the parliamentary session in December.
Amendments to the existing legislation would aim to identify and extend the criteria for those eligible for debt forgiveness, taking into account consumers who are heavily in debt due to retrenchments, unemployment and unfair deductions for repayments, which mostly affects grant recipients, students with loans and those burdened with Emolument Attachment Orders.
The proposed amendments also target unscrupulous lenders who the committee says must face stricter and possibly criminal consequences for unregulated lending that further entraps already indebted citizens by providing them with additional credit, often used to pay off existing loans.
The National Credit Act was last tightened up in 2005 with amendments that empowered the National Credit Regulator to investigate reckless lending. Inflation, recession and growing unemployment since then suggests “the time has come for us to give the people of South Africa, with the necessary comprehensive criteria, the relief that many need”, Fubbs said in a statement.
The committee called in the Department of Trade and Industry, which currently has its own debt relief programme in the pipeline, to prepare a Socio-Economic Impact Assessment Report. The criteria for eligibility for debt relief that it proposes sounds very much like those already identified by the committee.
A DTI discussion document presented to the committee listed the Affordability Assessment Regulations, which came into effect in September 2015 to list the affordability criteria that credit providers must adhere to and the reviewed Limitations on Fees and Interest Rates Regulations which came into effect on 6 May 2016. The Threshold for Credit Provider Registration issued in 2016 requires the registration of all credit providers and regulations providing for Credit Life Insurance are due to come into effect this year.
These regulations are still not solving the problems of lenders in distress. In its Socio-Economic Impact Assessment Report, the DTI proposed that the State establish a fund reserved for debt relief interventions. The fund would subsidise low income consumers who would have to undergo a debt review process and would be used to partially or fully pay off the debt of qualifying consumers, depending on their circumstances.
The DTI feedback also gives the Minister of Trade and Industry discretion to identify those eligible for debt relief. In its current form, the Act provides no criteria within which the minister is empowered to isolate specific over-indebted consumers as eligible for debt relief.
This did not sit comfortably with committee members who have made it clear that the eligibility criteria must come from Parliament and that the proposed amendments were intended as a c ommittee bill. They felt the private sector should contribute to debt relief and take some responsibility for over-indebtedness so that it is not taxpayers who effectively subsidise credit providers.
The committee noted that the purpose of debt relief policy was not to inculcate a culture of irresponsible borrowing and non-payment of debt but to relieve people from the pain of over-indebtedness.
Since November 2016 the committee has engaged key industry stakeholders on the extent of over-indebtedness, the socio-economic impact on society and debt relief measures. It has been generally recognised that the law in its present state is not punitive – Cosatu even called it “progressive” but that where it had failed consumers was in not being implemented vigorously enough and consistently. The National Credit Regulator (NCR) was called upon to take harsher action against reckless lending without proper affordability assessments.
Not unexpectedly, the banks and the credit industry saw no need for a revision of the existing legislated debt controls, arguing that it will increase irresponsible consumer behaviour. They stressed that the best arrangements with debtors were those that were flexible and took into account individual circumstances.
The Banking Association of South Africa’s (BASA’s) Cas Coovadia said at the time that consumer borrowing will continue for as long as poverty and unemployment persists. Demand for credit will not be reduced if banks do not provide credit, he said. It is not banks that create indebtedness, he told the committee, but the mounting economic challenges facing hard-pressed consumers.
Equally predictably, Cosatu and consumer bodies called for relief for retrenched consumers, especially those with insufficient or no credit insurance. They also singled out for debt relief victims of grant abuses, reckless credit lending and unlawful Emolument Attachment Orders (EAOs).
Cosatu was not arguing for complete debt write-offs, but rather proposed that the committee consider alternative mechanisms, such as extending loans. The problem was that many banks were linking their interest rates to the repo rate, which could shift the losses on to the consumer. It agreed existing laws were “quite progressive” but failed when it came to enforcement.
The union body wanted to see legislation that put loan sharks out of business by banks becoming more accessible and affordable.
The committee also repeatedly heard that debt is a key factor in poor labour relations and unrealistic salary demands by the workers and their unions. Over-indebtedness, it was told, was leading to employee turnover, absenteeism, fraud and on-the-job accidents. The Chamber of Mines cited debt as a leading factor behind the Marikana uprising.
The committee, for its part, while consistently supporting the principle of debt relief, has raised its own concerns. Members argued that credit providers, who were the source of people’s debt, should not “get off the hook” by the state becoming liable for compensation. There was also talk of the need for the private sector to also contribute to debt relief.
There was general agreement across the committee that those responsible for reckless lending had to be made to feel the impact of extinguishing those debts. The chairperson made it very clear that it was the first time in the democratic dispensation that the extinguishing of household debt incurred by reckless lending had ever been considered by Parliament. It was urgently required, as people were feeling the pinch of the country’s “junk status” on the economy, she said. DM

https://www.dailymaverick.co.za/article/2017-08-17-notes-from-the-house-sas-economic-woes-bring-new-urgency-to-debt-relief-reforms/#.WZY8tFEjFEY

2017-08-16

Workshop on unclaimed pensions and provident funds for ex-mineworkers held

JOHANNESBURG - The workshop is intended to give feedback on progress in the implementation of the outcomes of a workshop held last year on 24th June 2016.
Most of the outcomes from the previous workshop were related to legal, administrative (Database and IT systems), tracking and tracing interventions and payments on unclaimed financial benefits to ex-mineworkers. These unclaimed financial benefits include those for occupational diseases administered by the Department of Health’s Compensation Commissioner for Occupational Diseases (CCOD).
This year’s workshop will be attended by representatives from the Financial Services Board, Departments of Mineral Resources (DMR), Labour (DoL) and Health ( DoH) and the Chamber of Mines. 


The DPME, DoH, DMR and the DoL have been serving as an intermediary between the provincial leadership structures of various ex-mineworker’s formations and the different provident and pension funds.  
The primary objective of the first day of the workshop on Tuesday, 15th August 2017 is for government to consult the leaders of the ex-mineworker’s on the challenges that hinder the payment of financial benefits and develop proposals to address these challenges.
These proposals will be presented to the Pension and Provident Fund Administrators on Wednesday, 16th August 2017.
At the conclusion of the workshop it is expected that the participants will have a clear program of action with clear deliverables, time-frames and indicators for the next 12 months to fast track the payment of approximately R6bn unpaid pensions.

The workshop will be held as follows:
Dates: Tuesday 15 August 2017 & Wednesday, August 2017
Time:  9am
Venue: Rodevallei Conferencing and Meeting Hotel, Pretoria North

https://www.iol.co.za/business-report/workshop-on-unclaimed-pensions-and-provident-funds-for-ex-mineworkers-held-10799872

2017-08-10

Ismail Momoniat calls for law on unclaimed pensions

Concern over estimates by FSB that at least R40bn remains due to former workers


Legislation is needed to compel pension fund administrators to increase efforts to trace beneficiaries and pay out billions of rand in unclaimed funds, Treasury deputy director-general IMomoniat, an FSB board member, said on Wednesday the concern about unclaimed funds was a https://www.businesslive.co.za/bd/national/2017-08-10-ismail-momoniat-calls-for-law-on-unclaimed-pensions/regulatory issue.
A law was needed to provide guidelines, he said, and to compel trustees to find beneficiaries and pay out the money.
"We have asked the regulator [FSB] to deal with this issue," he said, "but there are also structural issues involved."
Alta Marais, head of research and policy at the FSB, said a lack of record-keeping, the weak provision of information to employees as well as poor tracing efforts were among the reasons that workers’ benefits remained unclaimed.
The FSB was the respondent in a 2016 high court case over its handling of dormant pension funds. The case was dismissed, but there is an investigation into the way the FSB cancelled dormant pension funds.
Data in the FSB’s possession showed unclaimed benefits amounted to about R41.7bn. Of this amount, about R7.6bn was held by unclaimed benefit funds and the balance was in the relevant funds in which the benefits accrued or other funds to which such benefits have been transferred. The FSB’s retirement funds division had been participating in outreach initiatives to assist the public in lodging inquiries about unclaimed benefits, Marais said.
The regulator’s pensions registrar had obtained unclaimed benefit data from funds and administrators to enable it to provide a search engine on its website that will enable the public to search whether benefits are due to them and to provide contact details of funds.
Thami Mtetwa, director at Symphony Tracing Services, said companies were often reluctant to appoint tracing agents as they earned interest on unclaimed funds. Another issue, Mtetwa said, was the question of which party should pay tracing agents.
"Should the company pay or should the person who has unclaimed entitlements due pay?" Mtetwa asked.
Rosemary Hunter, the former deputy pension funds registrar who took the FSB to court, said while there were challenges in tracing former mine workers, working with the government was critical in ensuring the speedy recovery and distribution of funds to beneficiaries.
smail Momoniat says.
The Financial Services Board (FSB) estimates more than R40bn in pension funds remains unclaimed. Health Minister Aaron Motsoaledi recently said billions of rand due to former mine workers remained unclaimed. Chamber of Mines CEO Roger Baxter put the figure at R3bn for the mining sector.
The pension money, which is due to former mine workers from SA and neighbouring countries, is not controlled by the government.
The unclaimed benefits, which include cash accumulated towards retirement and deaths, are held in investment vehicles and overseen by trustees, who use tracing companies to find beneficiaries, albeit sometimes reluctantly.