Talks are continuing over changing the Eskom Pension and Provident Fund (EPPF) from a defined benefit (DB) fund to a defined contribution (DC) fund.

The big difference between the two funds is that with a DC Fund, what you get out from the Fund is what you put in. So if you have worked for Eskom for a short period, your benefits will be linked to what you have put into the Fund and how the Fund has performed.

With a DB Fund as present, if you have worked for Eskom for 5 months or 25 years and you die, you are guaranteed the same benefits.

“Numsa and Num leadership both support keeping the DB Fund,” says Osborn Galeni, Numsa’s Eskom co-ordinator. “It provides better benefits when you are ill or when you retire.”

But the biggest problem is that Eskom has not underwritten the DB Fund. At the moment, there are only 28000 employee contributors to the Fund but there are more than 33000 pensioners receiving benefits. If there is a shortfall, then the actuary can advise the Fund to increase contributions or to reduce the benefits.

“But Eskom in 1993-94 enjoyed a contribution holiday of 1% of its contributions. And if it could take a decision to take a contribution holiday then, it should also be responsible for underwriting the Fund as well,” says Phutase Tseki , Numsa Eskom shop steward.

Workers are also unhappy with the DB Fund because if you resign you only get back your contributions plus 4%. And if you are dismissed, you only get back your contributions.

“Our plan is to try and negotiate changes to the DB Fund to raise the benefits if you are dismissed or resign and to sort out the underwriting,” says Galeni.

But “only if workers show they want these changes will we get them,” says Galeni. a

Workers should get an updated report of what is happening from their shop steward.