Tuesday, January 18

Postal workers face an uncertain future

Medical assistance for post office employees could be suspended unless the distressed business comes up with a plan to resume contributions. Contributions to the pension fund have also suffered as the Post Office faces a massive loss.

In its corporate plan For 2021-2024, the post office projected a loss of R2.5 billion for the 2020/21 financial year. Their financial situation was dire before Covid-19, which has been exacerbated by the pandemic, according to the report.


Subscribe to get full access to all of our shared and untrusted data tools, our award-winning articles, and support quality journalism in the process.

Creditors, health care contributions, pension fund contributions and Sars obligations were left unpaid and “will not be paid unless urgent financial assistance is provided.”

Post office spokesman Johan Kruger confirmed to GroundUp that the company had been unable to pay monthly contributions to the pension fund or the health care fund. He said that revenue during the Covid-19 shutdown had fallen and that the Post Office had prioritized employee salaries.

To date, the Post Office still owes R543 million to its retirement fund, Kruger said. Currently, the Post Office employs more than 15,500 people.

On October 9, 2020, MEDiPOS Medical Scheme, which provides medical assistance to post office employees, warned that the scheme would stop providing coverage if late medical assistance contributions were not paid by December 31.

In December 2020, MEDiPOS Director Thabisiwe Mlotshwa told the members that an agreement had been reached. The first payment had been received from the Post Office and, although there was still a significant amount outstanding, the plan would no longer suspend benefits. “[The Post Office] has submitted a proposal on the settlement of outstanding contributions due and the plan will continue to collaborate with [the Post Office] to ensure that the outstanding amounts are updated and that you continue to enjoy the benefits that the plan offers and for which you have paid, ”said Mlotshwa.

Kruger said the Post Office was able to pay for some of the overdue medical assistance after deciding to “pay the cash portion of employee wages in full and withhold medical and pension contributions as an interim measure.”

In this way, Kruger said that employees “would continue to be members of the pension and health care plans and retain their benefits.”

But Mlotshwa told GroundUp that although the Post Office had promised to pay monthly contributions again starting in November, the scheme had only received one payment for November 2020 “with partial payments for other months.”

He said the Post Office owed 582 million rand to the plan as of September 7. When asked if members could lose benefits if the negotiations were unsuccessful, he said that “benefits could be suspended depending on the outcome of the commitments.”

Communication Workers Union General Secretary Aubrey Tshabalala said only that the Post Office had agreed to pay the pension fund and health care benefits. “However, we are still awaiting confirmation of the pension fund payments for all.”

“Failure to pay these debit orders has dire consequences on the livelihood of workers,” he said.

Kruger said the Post Office had put plans in place to improve its revenue. He said revenue was up from last year, though still below target, and spending was down.

When asked whether employees would continue to receive their full pension payment upon retirement, given the financial situation of the Post Office, Kruger said: “Employee pension capital remains invested in the pension fund. The fund shows good growth and employees will receive the full amount available upon retirement. “The fund is a defined benefit fund, which means that members get a guaranteed amount upon retirement, as opposed to a defined contribution fund where Members pay a defined amount, but payments depend on the growth of the fund’s investments.

Kruger said the Post Office is in regular talks with the health care plan and the pension fund to “manage the situation.”

© 2021 GroundUp.

This article was published for the first time here.


Leave a Reply

Your email address will not be published. Required fields are marked *