Former Roessing employees battle for their share of pension surplus

MORE than half of the people who attended an information session on the Roessing Pension Fund (RPF) walked out as they felt that their issues would not be addressed.

At Monday’s meeting, the trustees informed the group that they would not deal with the concerns of former employees who claim a right to a surplus of N$450 million in the RPF. As soon as representatives of former employees started directing questions on whether former employees should or should not benefit from the surplus (as they were the one’s who jump-started the fund before Roessing decided to implement a contribution holiday in 1992), they were reportedly told that the meeting would not deal with the issue.Reportedly they were told that it was a meeting only for active members of the mine and for pensioners.At that point, half of those present are reported to have walked out of the meeting – echoing the scenario of a similar meeting held at Walvis Bay only a couple of hours earlier.According to Raphael Karuaihe (Senior Financial Consultant at Alexander Forbes), who assisted the RPF trustees in presenting the meetings, the session was meant to be a survey for existing employees and pensioners of Roessing; and opportunity to vote on alternatives on how the company should align their pension fund and handle the surplus that is said to be over N$450 million.The Namibian has seen a letter in which the Chairman of the fund, responding to enquiries by former employees, says that any decisions taken to allocate or distribute the surplus, will include all current active members and pensioners, including members in receipt of disability benefits, as well as beneficiaries of deceased members who are still receiving pensions.He added that the board had previously discussed the issue of former members who are no longer members of the fund.”Given the anticipated sensitivities regarding this issue, the trustees commissioned a legal opinion in this regard,” the letter noted.”The conclusion of the legal opinion was that former members currently have no legal entitlement to the surplus.”This letter was written in February 2007.A trustee of the fund, Eric Beukes, confirmed the legal aspect to The Namibian and said that the board might take a decision later about the eligibility of former employees.”Why do they prepare such a survey to distance and antagonise the former and current employees with one another? Do they realise that their action is causing division in the Namibian society?” a former employee, Buddy Esau, commented to The Namibian.Existing members were given the option at Monday’s meeting to vote on how the mine should proceed in dealing with the surplus – either choosing to remain on the current defined benefit fund (in which the pension pay-out is fixed according to stipulated contribution) or to change to a defined contribution fund, where the workers pay according to the fund’s sustainability and also allowing for a distribution of the existing surplus.The former employees argue that current employees have been on a contribution holiday (where employer and employee do not contribute to the fund because of its healthy surplus) since 1992, “thanks to the interest and surplus accumulation of previous employees’ contributions”.A committee of former members are in aggressive negotiations with Namfisa (Namibia Financial Institutions Supervisory Authority) on how to deal with the situation.According to sources, Namfisa has agreed to act as a mediator between Roessing and the concerned group.New legislation on the distribution of surpluses is currently being tabled, and is believed to include former employees.This could not be independently confirmed.As soon as representatives of former employees started directing questions on whether former employees should or should not benefit from the surplus (as they were the one’s who jump-started the fund before Roessing decided to implement a contribution holiday in 1992), they were reportedly told that the meeting would not deal with the issue.Reportedly they were told that it was a meeting only for active members of the mine and for pensioners.At that point, half of those present are reported to have walked out of the meeting – echoing the scenario of a similar meeting held at Walvis Bay only a couple of hours earlier.According to Raphael Karuaihe (Senior Financial Consultant at Alexander Forbes), who assisted the RPF trustees in presenting the meetings, the session was meant to be a survey for existing employees and pensioners of Roessing; and opportunity to vote on alternatives on how the company should align their pension fund and handle the surplus that is said to be over N$450 million.The Namibian has seen a letter in which the Chairman of the fund, responding to enquiries by former employees, says that any decisions taken to allocate or distribute the surplus, will include all current active members and pensioners, including members in receipt of disability benefits, as well as beneficiaries of deceased members who are still receiving pensions.He added that the board had previously discussed the issue of former members who are no longer members of the fund.”Given the anticipated sensitivities regarding this issue, the trustees commissioned a legal opinion in this regard,” the letter noted.”The conclusion of the legal opinion was that former members currently have no legal entitlement to the surplus.”This letter was written in February 2007.A trustee of the fund, Eric Beukes, confirmed the legal aspect to The Namibian and said that the board might take a decision later about the eligibility of former employees.”Why do they prepare such a survey to distance and antagonise the former and current employees with one another? Do they realise that their action is causing division in the Namibian society?” a former employee, Buddy Esau, commented to The Namibian.Existing members were given the option at Monday’s meeting to vote on how the mine should proceed in dealing with the surplus – either choosing to remain on the current defined benefit fund (in which the pension pay-out is fixed according to stipulated contribution) or to change to a defined contribution fund, where the workers pay according to the fund’s sustainability and also allowing for a distribution of the existing surplus.The former employees argue that current employees have been on a contribution holiday (where employer and employee do not contribute to the fund because of its healthy surplus) since 1992, “thanks to the interest and surplus accumulation of previous employees’ contributions”.A committee of former members are in aggressive negotiations with Namfisa (Namibia Financial Institutions Supervisory Authority) on how to deal with the situation.According to sources, Namfisa has agreed to act as a mediator between Roessing and the concerned group.New legislation on the distribution of surpluses is currently being tabled, and is believed to include former employees.This could not be independently confirmed.