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Recently Eskom Pension Fund fired its trustee which followed the rebal of pensioners. Electricity monopoly has the powe to stimulate price, but how much power they had to win their pensioners' trust. It is not a piece of cake.

Johannesburg - Western Cape pensioner members of the R50 billion Eskom Pension and Provident Fund are leading a rebellion against its board in defence of a trustee who was fired in August.

In a statement, the Eskom Western Cape pensioners, who are members of the Eskom Pensioners Association, have accused fund chairman Kennedy Memani of highly secretive activities and of suddenly deciding to postpone the fund's trustee election process.

Elections, which occur every four years, were due to have taken place in September.

The man at the centre of the dispute is Joshua Mkonza, who was a pensioner-elected trustee for four years until August, when he was fired for communicating the problems he perceived to be afflicting the fund to the Financial Services Board (FSB) and the National Prosecuting Authority (NPA).

The defined benefit fund is one of South Africa's biggest privately administered pension funds, with 34 000 pensioners.

The fund's board of 14 trustees consists of seven members appointed by the power utility's board, two members elected by the pensioners, two trustees elected by non-unionised Eskom employees and three trustees elected by union members.

The dispute started with the resignation of the fund's chief executive, Terrence Chauke, following a forensic audit by PricewaterhouseCoopers.

Since Chauke's resignation, the fund has had two successive acting chief executives, with the present one appointed on August 7.

Memani did not release the findings of the audit, which prompted Mkonza to write to him demanding to know why there was an acting chief executive if, as Memani claimed, Chauke was on leave.

Mkonza wanted guarantees from the fund chairman that the findings would be referred to the police; that pensioners' money was not used to fund Chauke's layoff; that the process would be transparent; and that the pensioners would be kept informed.

Mkonza sent copies of this letter to the FSB and the NPA.

This apparently infuriated Memani, according to Eskom pensioner Edwin van Andel. Van Andel, a former risk and compliance officer at the fund, said Memani phoned Mkonza and accused him of breaking the duty of confidentiality to the fund.
Memani allegedly threatened to stop Mkonza's remuneration as a trustee and to revoke his indemnity as a trustee if Chauke should sue him.

Van Andel said Mkonza was now afraid to speak to the press because Memani had threatened to sue him.

A sub-committee of the board was appointed to investigate Mkonza, who refused to co-operate with it. At the end of August, it recommended that Mkonza be fired.

On September 19 Memani issued a circular to all the fund's members and pensioners, saying that, guided by strict management principles, adherence to good governance and in the spirit of ensuring that the interests of members and pensioners were protected at all times, the board of trustees had recently decided to remove Mkonza as a trustee.

He said this step had been taken following an investigation and a process conducted in terms of the fund rules.

Memani continued: "As part of strengthening our fund, we have decided to postpone the trustee election process. We are in the process of refining the current election policy to ensure that it complies with the Pension Funds Act. All members, pensioners and other stakeholders will be notified of the next trustee election in due course. The board would like to apologise for any inconvenience caused by this postponement."

Jurgen Boyd, the head of collective investments at the FSB, said the oversight body felt the firing of a trustee was the responsibility of a fund.

"We didn't think there were any grounds to investigate and take the matter forward," Boyd explained.

Memani said Mkonza's file had been closed long ago.
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"You must never listen to sweet talkers like him. He was fired for incompetence," said Memani.

On the problems between the fund and the pensioners association, Memani said that in terms of the law, the fund recognised only individual members.

Van Andel, a former vice-chairman of the pensioners association, said the association would take Mkonza's matter to the labour court on the basis that he was unfairly dismissed.

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