HISTORICAL OBLIGATIONS Major SAPO Liabilities Liability Amount Post
HISTORICAL OBLIGATIONS
Major SAPO Liabilities Liability Amount Post. Bank Loan R 976 million Medical Aid Deficit R 2. 2 Billion Pension Fund Deficit R 929 million Accumulated Losses R 1. 6 billion
SAPO Turnaround Progress Legacy Obligations
Key Achievements: Legacy Obligations POST RETIREMENT MEDICAL • All new appointments internal & external excluded from the benefit • Bought off the benefit from 1, 800 VSP exists • Total removal of the benefit tabled at National Negotiation Council • Reduction of company contribution from 67% to 50% tabled at NNC • Calculated savings for all of above initiatives R 359 million • Collapse of A, B, C Medical AID options into one option will happen after negotiations (Potential savings R 648 million).
Key Achievements: Legacy Obligations MEDICAL AID FUND • Medical AID restructure to reduce excessive employer contribution • All managerial levels Medical AID capped within the TCTC package • Collapse of A, B, C Medical AID options into one option will happen after negotiations at NNC (Calculated savings R 648 million)
Key Achievements: Legacy Obligations CONVERSION OF PENSION : DB TO DC • Changes to Rules approved by Finance Minister (July 2002) and approved by Communications Minister (February 2003) • Changes to company contribution rate and Pensioners option to purchase annuities from fund to be tabled at NNC • In process of engaging a consortium of Asset Management entities to structure, implement & execute appropriate hedging strategy • Government Guarantee removal from the Post Office Act in progress • The Pension Fund is currently 98% funded
KEY ACHIEVEMENTS Legacy Obligations POST BANK LOAN REPAYMENT • The Loan now reduced from R 976 million to R 740 million. • Best of the class governance structure now operational to ensure non-occurrence. • The Post Office prefers injection of cash to settle the loan (as previously committed by the shareholder).
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