TRADE UNIONS

NUM takes a hard line on reform issues. Criticism of the process will sting,
as it’s designed to do. How best to respond is another matter entirely.

As the collective bargaining unit for workers in the mining, construction and electrical engineering industries, the National Union of Mineworkers (NUM) is the largest single Cosatu affiliate. What it says, like it or not, is taken seriously;not least by government and a supportive ear from Gwede Mantashe, ANC secretary general and former NUM general secretary.

A secretariat report to the NUM central committee, meeting in early June, outlines current thinking on
retirement funds that will certainly challenge its service providers. At the least, this document invites much closer engagement with NUM than appears so far to have been the case.

On transformation: The funds of many mining and construction companies remain untransformed, as do the asset managers holding the assets of these funds. It is shameful that, compared with black asset managers, white asset managers have an overarching control over most funds.

Most black asset managers are not rated (under the BEE codes) and should at least aspire to Level 2 ratings which is real economic empowerment. Most white asset managers are on Level 4, representing the bad news at the height of economic transformation. Mostly, the untransformed asset managers hold massive assets of the union funds (see table).

On the Financial Sector Charter: It must be reviewed with increased NUM involvement. Guidelines must be developed in the FSC to alter funds’ procurement policies to ensure radical implementation of
economic change in the funds. Fragmented funds in the mining and construction industries must be consolidated and racially-aligned funds must be eliminated.

On the Eskom fund: Moves by the company to convert it a defined-benefit fund to a definedcontribution fund must be resisted. Amongst other reasons, current DB fund workers can easily predict their own retirement pensions; the DB pension benefit is protected from inflation by linking the pension to the fund member’s salary at the time of retirement, and all risks associated with the fund are the responsibility of the employer.

On the Fidentia curatorship: The FSB has been asked to explain when and how much members of
the NUM funds will be paid. So far there’ve been total inflows of R260m while there are listed claimants for R250m. The current amount available for distribution is R87,3m. This is after expenditure of R44,2m on the curatorship, a distribution of R106m to the Living Hands Umbrella Trust, and certain provisions.
NUM will be seeking clarification from the curators on these high fees. The R44,2m (rounded) is broken
into R9,6m for curators’ fees, R4,9m for forensic accounting services; R13.9m for attorney fees; R12,4m for counsel fees; a R1m provision for legal costs, and a further R2,1m provision for FSB costs.

The document then reports on a gathering of over 100 delegates from the three major union federations
– Cosatu, Nactu and Fedusa – at a national retirement funds conference in April. These concerns were raised:

• National Treasury has introduced proposals for piecemeal reform of retirement funds, knowing
  full well that these can’t take place outside comprehensive social security reform. Piecemeal
  reforms will not be sustainable and will not be supported by organised labour;
  
  
• Proposals for mandatory preservation of retirement funds (preventing workers from withdrawing funds before retirement) can’t be implemented when there is no income support for the majority of unemployed workers;
  
  
• Treasury is calling for the termination of provident funds, a complex and explosive issue which cannot be addressed in such a high-handed way. We want to assure workers that nothing will happen without their consent;
  
  
• Treasury must cease these counterproductive interventions and submit to the process of discussing the comprehensive reforms. Organised labour has been excluded from this process which has evolved since 2007;
  
  
• This is an insult to workers. Decisions are being taken about them on critical areas of interest,
  including how their pensions (which are deferred pay) are managed. Fiery language, to be sure. Never a dull moment in this industry . . . Also worth recording is that, nationwide, NUM now has 122 members on trustee training. Of these, 23 are in the PWV region and six are in head office. There are an additional nine members already serving on various trustee boards.