Public servants' unions call for GEMS executives' salary cuts to match public service standards

Unions representing public servants are demanding that the Government Employees’ Medical Scheme (GEMS) reduce its executives’ salaries to align with senior functionaries in the state’s departments.

Labour representatives at the Public Service Coordinating Bargaining Council (PSCBC) want GEMS to align its executives’ remuneration to the public service and a drastic reduction in the level of remuneration of the medical aid scheme’s board of trustees.

The unions, which include the largest representing government employees, the Public Servants Association (PSA) and the National Education, Health and Allied Workers’ Union (Nehawu), believe that the initiatives undertaken by GEMS’ board of trustees are insufficient and want the PSCBC to add other basket of initiatives, including the reduction of the reserve ratio from 25% to 20%.

The Council for Medical Schemes requires a reserve or solvency ratio of 25% for medical aid schemes.

In its explanation for the proposals, the PSCBC recommended the initiatives to reduce the 9.8% increase, reduction of solvency threshold from 25% to 20% and noted that the sector it is operating in is stable.

Additionally, the reduction of the board of trustees’ remuneration is demanded because GEMS is a closed medical aid scheme, and the remuneration of executives to align with government senior management as a closed medical scheme for the public servants.

Responding to the demands, GEMS Principal Officer Dr. Stanley Moloabi said it was important to note that the medical aid scheme’s executives, board, and its entire staff remuneration is benchmarked by independent, external remuneration specialist providers to ensure that it remains competitive in the medical schemes sector.

“GEMS uses the Paterson Grading System to determine levels of remuneration, and this is regarded as best practice. GEMS is a complex medical scheme that must attract and retain rare skills in a highly competitive environment,” Moloabi told the PSCBC last month.

He denied that GEMS has a profit-oriented mindset.

“GEMS is a restricted, not-for-profit medical scheme for public service employees in South Africa, registered under the Medical Schemes Act. The scheme belongs to members and does not pay dividends.

“During years when there are surpluses, these are reinvested into the scheme's reserves for financial security and the benefit of its members. The scheme has demonstrated this by cushioning previous increases when it paid more than R10 billion towards members’ healthcare expenses from reserves in the past few years,” Moloabi added.

Nehawu has called on GEMS, the Department of Public Service and Administration, and the National Treasury to halt the implementation of the decision to increase member contributions by 9.8% and rather focus on ensuring that the scheme remains capable of serving the needs of workers and does not become an instrument of accumulation by capital and those who administer it.

In addition, the Cosatu affiliate wants GEMS to insource many services that they have outsourced, including capping the fees they are paying to their board members.

Cape Times