Business Maverick

Business Maverick

Court documents suggest the Eskom Pension and Provident Fund is in crisis

Court documents suggest the Eskom Pension and Provident Fund is in crisis
The Eskom Pension and Provident Fund's migration of its member data to a new service provider has led to a flurry of court papers. (Photo: Gallo Images / Misha Jordaan)

Court papers have started to fly as the Eskom Pension and Provident Fund goes into a flat spin trying to manage the migration of its member data from an administration system provided by the current service provider to an unknown platform provided by a preferred new vendor. The fact that the fund is nowhere close to meeting its deadline is now a matter of public record. A signed contract with the new service provider is also notable for its absence. All the while, pensioner payments are at serious risk of failure come 30 April 2020 when the old system is shut off.

The Eskom Pension and Provident Fund (EPPF) has launched legal proceedings against its current administrator, ASP Global, in an effort to force the software provider to furnish the fund with its own data, putting paid to suggestions that the changeover to a new administrator is on track. 

The notice of motion that was compiled by Cliffe Dekker Hofmeyr and based on an affidavit submitted by current CEO and principal officer Linda Mateza is due to be heard in the Cape High Court on Thursday 27 February. It might seem technical, but it is crucial if just over 40,000 Eskom pensioners and around 30,000 existing employees are to get their contributions processed correctly and pensions paid on time. The job of the administrator is broadly to manage the membership database, calculate what is owed to the fund and what should be paid out. It is an absolutely critical part of managing a pension fund.

What happened is that in 2019 the R140-billion fund, for reasons that are disputed, decided to appoint a new administrator and allow the existing contract with its now data manager Global ASP to lapse by end of April. EBSphere was appointed in Global’s place.

Relations between the parties subsequently became strained, according to the court papers, but it is clear from the pleading that the new administrator is struggling to get its system up and running.

The fund then approached Global with a view to extending the contract for a year, at which point Global laid down a set of conditions for any temporary resumption of the contract. The fund’s argument is that Global is not entitled to set conditions and is contractually obliged to co-operate in the handover process. 

Global’s argument in the court papers is that it is co-operating to the extent that the contract requires, and that it has not impeded the handover, suggesting the problem lies not with it, but with the fund itself.

Whatever the outcome, the dispute suggests the existing executive of the fund has falsely claimed in the past that the migration is on track and the handover will still happen on the due date — the end of April 2020.

In responding documents filed by Global ASP the service provides sufficient evidence that the EPPF has full access to its own raw data and that the service provider has no access to servicing the data or amending it in any way or form in terms of signed agreements and/or the fund’s own policy and procedure. 

It also shows that for the fund to be able to successfully migrate existing data from one service provider to the next, certain stipulations in existing contracts need to be met, which includes an agreement between the old and new service providers on how the data will be presented for offboarding on the one side and translated for onboarding on the other.

It is a required process that the fund has chosen to simply ignore. The reason behind that approach might be partly explained in its response to a section 35 (2) court order to produce its signed agreement with the new service provider — EBSphere — a contract the fund refers to in its original court application. The fund has subsequently admitted that no such contract exists.

That means that the fund misled the public and its members in its response to Business Maverick’s first report on concerns raised over this migration project. The fund’s notes of concern and allegations of inaccuracy have proved to be wanting. 

The fund has not yet even begun the process of migrating its data to a new service provider — that work is being conducted on internal platforms by a company that does not have a signed contract with the fund. In addition, no roll-back plan exists if the migration fails and when Global ASP terminates its relationship with the fund come 30 April. 

That means pensioners are at risk. DM

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