According to Section 17 of the Government Employees Pension Law, if an employer pays its employees enhanced pension benefits that constitute an additional liability to the Fund, the employer will be held liable for the extra costs. The additional costs are referred to as an “additional liability” and will be claimed back from the employer by the GEPF.

Here are some examples of situations in which the employer would be liable for additional costs: 

• An employee is discharged because his or her post is abolished;
• Discharge is in the interest of the employer;
• The President or Premier of a province is appointing a person whose service is not recognised as pensionable service; and/or
• An employee is discharged because of an injury or ill-health that came about in the course of his or her employment. 

In these examples, the employer carries the cost of the additional liability because the pension contributions paid did not provide for the enhanced benefits. There are also a number of other situations where additional liabilities could arise, for which the employer must pay. Employers are urged to familiarise themselves fully with the GEP Law and the rules of the Fund so that they are aware of the cost implications of offering enhanced benefits. 

The collection process (from Employers)

When collecting additional liability claims from employers, the GEPF uses the following process: 

1. Raising the amounts payable by the employer and member: This is done every quarter, after the actuaries have calculated the amounts owing. The actuaries send the GEPF the calculations, actuarial letters and a list of members. On receipt of these, the GEPF raises the employer debt and sends claim letters to the employers to recover the amounts due.
   
   
2. Allocating receipts:  Any amount received in respect of the debt is allocated against that employer.
   
   
3. Reconciliation: The amounts received are reconciled with the amounts owing.
   
   
4. Following up on discrepancies: Defaulting employers are issued with escalation letters as per the GEPF’s Debt Collection Policy.
   
   
5. Raising of late payment interest: Each month, the GEPF calculates late payment interest (based on the Repo rate+ 3%).

Reporting on the results: Status reports are submitted to GEPF management.