Cape Town - State departments are required by law to pay out pensions within 60 days after submission of documentation, however, some pensioners have had to wait up to ten years for payments, according to a Public Service Commission (PSC) report.
The PSC investigated complaints from retirees and beneficiaries about the delays of pension pay-outs and found that in some instances, delays dragged on for periods ranging between one and ten years.
“This results in adverse effects on the welfare and livelihood of these retirees and their dependants, as well as on the beneficiaries of deceased employees,” the report said.
The investigation found that the causes for delays could be ascribed to the following problems:
- Inadequate record management within departments that leads to delays in the processing of pension pay-outs;
- Customary and civil marriage that are disputed, as the Government Pensions Administration Agency (GPAA) does not pay out pensions in instances of contested issues;
- A lack of awareness that leads to forms not being completed correctly;
- Centralised human resources (HR) functions that delay the processing of pension pay-outs;
- Employees that don’t update their pension beneficiary information with their employers;
- Lack of capacity to switch to new IT systems and the unavailability of equipment, such as scanners that further delay the processing of pension applications;
- Problems with the GPAA customer care line.
The PSC report found that pensioners and their beneficiaries suffered severe trauma as a result of the delays in pension pay-outs. In some cases pensioners’ medical aids were cancelled, others were unable to feed their families and some could no longer afford their children’s tuition fees.
“Some even lost their properties due to a lack of money to service their debts,” the report said.
The PSC criticised government departments for not having termination plans in place to prepare them for their lives as pensioners.
“Departments focus mainly on ‘paper processing’ and pay little consideration to the psycho-emotional aspect of the retirees.”
The Commission recommended that the GPAA should urgently establish a database of unclaimed pension benefits and employ tracing agents to find the rightful dependants or beneficiaries of pension pay-outs.
All HR personnel should undergo rigorous training to speed up pension processing procedures, while state departments should make sure there is adequate awareness among soon-to-be-retirees about income tax issues and legislative changes that could affect their pension pay-outs.
In addition, large departments should decentralise HR functions and set aside money to become compatible with the requisite IT systems.