UASA Media Release: 29 October 2021
Statement by Abigail Moyo, spokesperson of the trade union UASA:
UASA is deeply concerned about state-owned company Denel’s court application to have the Denel Medical Benefit Trust dissolved as well as the proposal to replace the post-retirement medical aid benefits that are guaranteed through the trust, with individual annuities.
Denel’s proposal entails that any excess funds the trust may have after obtaining a group annuity and having made provision for its future expenses, be paid over to Denel to meet its considerable financial obligations. This may lead to a potential actuarial shortfall of funds in the trust and potentially leave retired workers who are supposed to benefit in the lurch.
In terms of the trust Denel workers who were employed at the company prior to 2002 are contractually entitled to receive post retirement subsidies in respect of their monthly medical aid contributions to the Discovery Health Medical Scheme.
Denel is now offering an alternative arrangement to retirees giving them the choice of either retaining their current subsidy or accepting an individual annuity through a group annuity policy the trust will buy from an insurer, and which will be funded by some of the trust’s assets.
According to Denel, after securing a group annuity scheme and having made provision for its future expenses, the trust should have an actuarial surplus that should then be transferred to Denel to help meet its considerable financial responsibilities.
UASA has filled an initial mandate to oppose Denel’s application and is in the process of obtaining another mandate from affected members. If necessary, UASA intends to pursue the legal route to stop the proposed changes as a dissolution of the trust will not be in the best interest of the affected Denel retirees.
For further enquiries or to set up a personal interview, contact Abigail Moyo at 065 170 0162 .