Armscor payout 'racially biased'

Armscor workers affiliated to the National Education, Health and Allied Workers' Union (Nehawu) are wrangling with the state-owned defence company about payments to be made from a post-retirement medical aid fund which is valued at just over R700-million.

Armscor wants to discontinue the benefit fund in its current form because it has become too expensive.

Nehawu is unhappy that the majority of its members will receive R100000 from the fund and then a monthly payment into their provident fund. A maximum of R848217 will be paid to employees close to retirement.

The acting head of Nehawu at Armscor, Siviwe Nziweni, said the union would prefer that the money be distributed equally.

"We have issues about the amount to be paid out," he said. "We are opposed to the distribution formula proposed, which is based on age."

Spokesman for Armscor Lulu Mzili said the offer was based on the advice of a reputable actuarial company.

The company wants at least 60% of qualifying members of the fund to back its proposal, which it wants to implement by the end of the year.

An Armscor employee said that in terms of Armscor's employment equity profile she believed the proposal was racially skewed.

She said that some older Nehawu members were not beneficiaries of the Armscor medical aid scheme that was to be discontinued, and it was only younger workers who were fortunate enough to be part of it.

The structuring of the payments was unfair because of Armscor's employment equity profile, which she said made the proposal racially biased.

"A lot of the older white people are going to get huge payments, whereas younger black workers get a pittance," she said.

Armscor said Nehawu's allegations about the fund payments being unfairly distributed were inaccurate and misleading.