annual report 2009
Employees and Employee Benefits
Staff complement
The staff complement at the group’s head offices and stores at the year-end comprised the following:
| Employee | |||||
| statistics: | 2009 | 2008 | 2007 | 2006 | 2005 |
| Permanent full-time employees | 10 075 | 9 311 | 8 781 | 8 155 | 7 469 |
| Permanent part-time employees | 313 | 289 | 113 | 323 | 257 |
| Flexitime employees | 3 103 | 2 600 | 2 776 | 2 337 | 2 658 |
| Contract employees | 947 | 568 | 724 | 327 | 329 |
| Casual employees | 1 029 | 2 221 | 2 801 | 2 989 | 2 867 |
The gender composition of the workforce, heavily weighted towards female employees, remained relatively static, with women making up 76,6% of the total compared to 78,2% in the previous year and 77,6% in the year before.
The group has a relatively young age profile, the average age being 30 years. Of this total, 91,2% are under the age of 40 years. A breakdown of the group’s employees by age over a two-year period is set out in the following chart.
Age Distribution |
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Retirement funding
All permanent staff of wholly-owned subsidiaries are required to join the Foschini Group Retirement Fund, which is a defined contribution fund registered in terms of the Pensions Fund Act, No. 24 of 1956. The administration of the fund is undertaken by the group in accordance with an agreement approved by the Financial Services Board.
The fund is managed by a board of trustees that meets quarterly. The trustees receive no remuneration for their services. Particular attention is paid to trustee training in order to ensure that trustees remain abreast of legislative changes and other developments within this specialist area. The assets of the fund are under the control of the trustees, who are advised by external consultants.
Sub-committees for strategy and investments meet quarterly and the benefits sub-committee meets monthly.
Despite the volatility of financial markets the fund achieved an overall performance return of –2,6% during its financial year, which was substantially better than most other funds in South Africa and far better than the All Share Index of the JSE securities exchange which returned –23,2% over the same period. Total market value of the assets of the fund at 31 March 2009 amounted to R2,2 billion, which is R0,4 billion lower than the previous year.
Pensioners were awarded an increase of 9% effective from 1 January 2009, which is in line with the pensioner increase policy of the fund to award at least inflationary increases, subject to affordability.
As required by the Pension Funds Act, 50% of the trustees are member-elected. The term of office for all trustees representing either the employer or members is three years, after which the trustees are eligible for re-election. Trustee elections were held during the financial year. Induction training is provided to new trustees, who also participate in the regular ongoing training noted above.
Apart from retirement benefits, the following are provided by the fund:
- a funeral benefit of R7 500 for the principal member and spouse and a lesser benefit for their dependent children;
- a death benefit of three times annual salary as well as the member’s gross equishare is available to provide benefits to dependants and beneficiaries, payable in the event of death in service; and where the death is accidental, a further benefit of twice annual salary is payable; and
- in cases of disablement, an insured disability benefit is provided to qualifying staff members, equating to 75% of pensionable salary earned at the time of becoming disabled, payable until attainment of normal retirement age (subject to continued disablement), after which the normal retirement benefit becomes effective.
Employees of RCS Group are not members of the Foschini Group Retirement Fund but receive comparable benefits from either Liberty Life Provident Fund, Liberty Life Pension Fund or the SACCAWU Provident Fund.
Where required, employees of subsidiaries trading outside South Africa belong to umbrella funds that comply with the legislation of the relevant country.
A formal risk assessment of the retirement fund is undertaken at least annually. Taking into account mitigating factors, HIV/AIDS remains the highest potential risk to the fund. Risk is minimised by undertaking regular actuarial valuations, external expert prevalence projections, and ongoing programmes on HIV/AIDS education and awareness. The fund is moreover able to amend its benefit levels.
The Foschini Group Medical Aid Scheme
The Foschini Group Medical Aid Scheme is an in-house, subsidised medical scheme that is designed to best suit the needs of most employees. Membership is voluntary except for senior employees. The average number of principal members at 31 December 2008 (the financial year-end of the scheme) was 2 355, covering approximately 4 889 lives in total.
The scheme is administered by the Metropolitan Health Group and is fully compliant with the Medical Schemes Act.
The board of trustees of the scheme is responsible for all aspects of its operations, which are reviewed by both the Foschini group medical aid audit committee and the external auditors. The board of trustees makes use of a medical schemes consultant and an actuary who provide specialised advice and participate in monthly operational and quarterly board meetings. The trustees and audit committee receive no remuneration for their services.
The accumulated funds ratio of the scheme at 31 December 2008 was 85%, which is well in excess of the required minimum of 25%, but not excessive for a small in-house scheme that will be subject to greater volatility than the norm as a result of sporadic large claims.
The financial health of the scheme favoured contribution increases which took effect in January 2009, the increases being 5% and 7,5% respectively for the two benefit plans available, compared to 4,5% and 7,5% for the previous year. In both years the increases were significantly below medical inflation. In addition, general benefit improvements were applied to match or exceed inflation in the various medical categories.
A risk assessment of the scheme is undertaken at least annually, both by the trustees and the administrators. The highest risk identified by the trustees is the volume of legislation affecting medical schemes. Keeping abreast of all current and pending legislation and adapting the scheme’s rules accordingly assists in managing this risk.
Other health plans
An external medical scheme, Ingwe Health Plan, is also available to group employees, and is subsidised by the group in the same way as the in-house scheme. The plans offered cater for lower-income earners and provide basic healthcare through capitation agreements with large hospital groups. Ingwe forms part of the black-empowered African Life group. Currently a total of 247 group employees are members, together with their dependants.
Employees outside South Africa may elect to join medical schemes that are similarly funded by the group.
All permanent staff of RCS Group are required to become members of a medical plan of their choice offered by Discovery Health.
Bursary scheme
The group operates a bursary scheme for children of employees, funded by the Foschini Foundation. This scheme is in the process of being phased out and a new scheme is to be introduced during the next financial year. The aim will be to bring new talent into the group.
Educational assistance
Low-interest loans are available to employees to assist with the costs of tertiary education for their children. These loans are available on an annual basis for each child and are repayable over two years to improve affordability.
Home assistance
Similarly, low-interest loans are available to employees to assist with the purchase or improvement of property. These loans are weighted towards providing greater assistance in the purchase or improvement of property within the lower price brackets. During this period, 46 qualifying staff members took advantage of this facility, 89% of whom were previously disadvantaged.
Employees may access further financial assistance for home purchases or improvements from an outsourced facility, utilising their share in the Foschini Group Retirement Fund as security. This is subject to the rules of the fund. The total of these loans at the year-end was R7,3 million.
Sponsorship
Employees are encouraged to undertake studies that will assist them in their current or future careers with the group. Sponsorship varies according to the level of study and requires greater financial commitment from employees at higher educational levels. Support for matriculation study fees is 100%. Coupled to this, the group offers sponsorship for the UNISA Retail Certificate, an intensive one-year retail-specific diploma.
Of employees receiving general sponsorship at the end of the current financial year, 78% were from previously disadvantaged groups, a percentage similar to that of previous years.
Healthcare
The group has delegated the management of occupational health to an external service provider. Curative and preventative care is provided from a centrally-located occupational health clinic permanently staffed by two nursing sisters with qualifications in occupational health. A medical doctor is on site twice a week to assist with cases requiring specialised attention.
The clinic provides a service to all employees working at the head office campuses as well as those at the distribution centres.
Services offered include family planning, HIV testing, primary health care, counselling for psycho-social stress, health education and health screening.
In addition, a confidential, outsourced employee wellness help-line facility has been introduced, which is manned by a qualified social worker. It has been well promoted to all staff members by posters, payslip attachments and the intranet. This facility extends beyond issues of health, and includes financial matters, trauma, interpersonal relationships, legal issues, substance abuse, HIV/AIDS and general enquiries. The issues unrelated to health are referred to selected service providers at no cost to the employee.
The service provider is also responsible for the management of ill-health within our stores through the WAKE programme, as well as any injuries on duty in terms of the Commission for Occupational Injuries and Diseases Act (COIDA). It also facilitates the group’s disability benefit processes, which provide an income replacement benefit to employees who are unable to work as a result of ill-health or injury for an indefinite or fixed period of time.
Employee relations
The group has a documented disciplinary and grievance policy and procedure, which is based upon the principles of fairness and correction rather than punitive action. This is available to all staff members on the group’s intranet.
