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Post Office workers face uncertain future

Sapo can no longer pay retirement fund or medical aid contributions.
The Post Office owes R543m to the retirement fund and is trying to 'manage the situation'. Image: Ashraf Hendricks

Medical aid for Post Office employees could be suspended unless the struggling company comes up with a plan to resume contributions. Contributions to the pension fund have also suffered as the Post Office battles with 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. Its financial position was dire prior to Covid-19 which has been exacerbated by the pandemic, the report said.

Creditors, medical aid contributions, pension fund contributions and Sars obligations remained unpaid and “will continue not to be paid unless urgent financial assistance is provided”.

Post Office spokesperson Johan Kruger confirmed to GroundUp that the company had been unable to pay monthly contributions to the pension fund or to the medical aid fund. He said revenue during the Covid-19 lockdown had dropped, and the Post Office had prioritised employees’ salaries.

To date, the Post Office still owes R543 million to its retirement fund, Kruger said. There are currently over 15 500 people employed by the Post Office.

On October 9, 2020, MEDiPOS Medical Scheme, which provides medical aid to Post Office employees, warned that the scheme would stop providing cover if arrear medical aid contributions were not paid by December 31.

In December 2020, MEDiPOS principal officer Thabisiwe Mlotshwa told members that a deal had been struck. The first payment from the Post Office had been received and although there was still a significant amount outstanding, the scheme would no longer suspend benefits. “[The Post Office] has presented a proposal on clearing the outstanding contributions owed and the scheme will continue to engage with [the Post Office] to ensure the outstanding amounts are brought up to date and that you continue to enjoy the benefits offered by the scheme and for which you have paid,” Mlotshwa said.

Kruger said the Post Office had been able to pay part of the medical aid backlog after deciding to “pay the cash portion of employees’ salaries in full and to hold back on pension and medical contributions as an interim measure”.

In this way, Kruger said employees would “remain members of the pension and medical aid schemes and retain their benefits”.

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

She said the Post Office owed R582 million to the scheme as of September 7. Asked whether members might lose benefits, if the negotiations did not succeed, she said “the benefits might be suspended depending on the outcome of the engagements”.

Communication Workers Union secretary-general Aubrey Tshabalala said only that the Post Office had committed to pay the pension fund and medical aid benefits. “However we are still waiting for the confirmation of the pension fund payments for all.”

“The 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 on last year, though still below target, and spending was down.

Asked whether employees would still receive their full pension payout on retirement, given the Post Office’s financial position, Kruger said: “The employees’ pension capital remains invested in the pension fund. The fund shows good growth and employees will receive the full amount available to them on retirement.” The fund is a defined benefit fund, which means members get a guaranteed amount on retirement, as opposed to a defined contribution fund where members pay a defined amount but payouts depend on the growth in the fund’s investments.

Kruger said the Post Office is in regular discussions with the medical aid scheme and pension fund in order to “manage the situation”.

© 2021 GroundUp.

This article was first published here.

COMMENTS   14

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Let Pravin sort it out.

Not interested???

Oh I see. Not so many lucrative little avenues for friends and family to take like at SAA.

COME PRAVIN!!! SAVE THE JOBS!!!

What business budgets for a R2,5 bill loss?

Only when run by the ANC i guess

I’m in tears..If SAPO goes South, who’s going to deliver my 1kg parcel to the North?

Yet another example that business should be left where it belongs..and that goes for farming too

The private sector and entrepreneur

Sadly though, if they privatize SAA,SAPO and many others, the cadres Billion Rand kitty to loot dries up , so no chance of that happening

The ever diminishing 5% will keep footing the bill until most have them have sent sail with masks, jabs and all to a land far off

The Post Office is useless. In January this year I sent a parcel to Arizona, USA. When I checked the track and trace no first it said still at the post office i dropped it off at. then after a week it was in Johannesburg a week later nothing. When I queried I was told that it was in Australia at customs.
As of today neither the Post Office or I have any idea where it is.

Question is, have they paid the PAYE over to SARS?

It’s in the post……

Well that is what you get when an outdated post office no longer does post office work!

I have not seen one person go to the local post office to post anything. Why? Gets stolen, or lost

Like all state-run entities, they are all bankrupt and useless

yes.

They do car licensees, sassa payments and send CV’s.

So you get “cadre’s” to do the work “cadre’s” could not do in the first place.

Hahahaaa!! It’s just one big joke. The anc and it’s rif raf.

If Barnes could not save this sinking ship, no one probably could without wholesale changes, like doing away with BEE.

The logistics game has changed a lot and if you do not have the Fintech and other tech on your side, you and the over-employed cadres, are doomed.

This is what the RET and EFF lunitics want to firm the basis for a State Bank !!!
More like State Bankrupty .
Struggle on Comrades .

Crazy. Parcel delivery is a huge business. But that they screwed up royally. What’s left? Close it down, or sell the business to one of the private companies that have filled the gap.

I think that months long strike a couple of years ago has got a lot to do with the problems of today.
The many clients you lost then, you lost permanently.
Same with the saa, don’t expect loyalty from us after these strikes.

The day Barnes left was the day the sun set for this lot.

Could not happen to a nicer bunch of ANC lazy arrogant looting self serving cadres. All self inflicted.

End of comments.

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