SOUTH AFRICA - A major South African pension fund has been found guilty of gender disparities in the payment of benefits to former government employees.
A complaint was lodged against the R220bn ($28bn) Government Employees Pension Fund (GEPF) by a former unnamed employee prompting an investigation by public protector Selby Baqwa into alleged gender discrimination.
Before taking a voluntary redundancy package, the employee applied and obtained approval for the purchase of an annuity.
In his report, Baqwa said that the formula for purchasing an annuity should be the same for both sexes in the GEPF. Accordingly, if members’ variable factors, such as age and actual service are equal, the costs involved for both to buy back a specific period of pensionable service should also be exactly the same.
However, from the GEPF investigation Baqwa found that for male members the period of purchased service is multiplied by 8% and for female members, the period of purchased service is multiplied by only 6%. He added that this could have a substantial effect on the gratuity amount for male and female members.
In this case the complainant received R111, 000 ($13, 000) less than a male member would have done under the same circumstances.
Following the investigation, it was recommended by Baqwa that the national treasury take urgent steps to have the relevant formula amended.
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